Do you work in Illinois? Do you have a noncompete? Have you had that job for less than two years? Are you wondering if your employer can sue you if you resign and start working for a competitor? If those answers are all ‘yes,’ then you’re not alone. Lawyers and judges are wondering the same thing.
Late last month, the Illinois appellate court in Cook County issued a split decision in McInnis v. OAG Motorcycle Ventures, Inc., 2015 IL App (1st) 130097 (June 25, 2015). Two of the judges1on the three-judge panel, Judges Cobb and Smith, said that a Hog salesman’s noncompete was no good because (1) he had worked at the dealership for less than two years, and (2) he got no bonus or other special comp when he signed the noncompete.2 A two-year ‘mandatory minimum’ was the law, said the court, because companies must not be allowed to hire someone at will, force him3 to sign a noncompete, fire him the next day, week, or month, and then lock him out of jobs with competitors for several months or years thereafter.4
But Judge Ellis, the McInnis dissenter, said that a mandatory minimum was not the law in Illinois, nor should it be. An employee who worked at his job for 729 days should be held to his noncompete, the judge said, just as an employee who worked there for 730 days. Judge Ellis did not suggest that 729 days was the minimum, either, but his point was that there should be no time hard deck below which a court in Illinois could never enforce a noncompete.
Judge Ellis is not a one man wolf pack. Chicago chief federal Judge Ruben Castillo, Chicago federal judge Manish Shah, and Peoria federal judge Joe Billy McDade all agree. Montel Aetnastak, Inc. v. Miessen, 998 F.Supp.2d 694 (N.D. Ill. 2014, Judge Castillo); Bankers Life and Cas. Co. v. Miller, 2015 WL 515965 (N.D. Ill. Feb. 6, 2015, Judge Shah); and Cumulus Radio Corp. v. Olson, 2015 WL 643345 (C.D. Ill. Feb. 13, 2015, Judge McDade). In each of those cases, the judge rejected a mandatory minimum of employment, and said that the noncompete(s) could be enforced, assuming other factors, against employees who quit after 6 to 22 months.
But hold on, Judges Cobb and Smith in McInnis aren’t alone, either. In May of last year, now-retired Chicago federal Judge James Holderman also enforced a two-year mandatory minimum, and rejected a noncompete for a sub-two-year employee. Instant Tech., LLC v. DeFazio, 40 F.Supp.3d 989 (N.D. Ill. 2014). In June 2013, three other judges on the Cook County appellate court unanimously tossed a noncompete for a three-month employee, telling employers don’t come to court without two years or more. Fifield v. Premier Dealer Servs., Inc., 2013 IL App (1st) 120327. In June 2011, the southernmost Illinois appellate court (5th District) also suggested5 in Diedrich Ins. Agency, LLC v. Smith that there was a two-year mandatory minimum under the law. 2011 IL App (5th) 100048.
So, back to my initial point, if you signed a noncompete less than two years ago and are looking elsewhere, neither I nor anyone else has an answer for you. Our legal house is divided. The Supreme Court in Springfield needs to speak up, assuming Rauner and Madigan keep their lights on. Is there a mandatory minimum? If so, how long? Two years? Two months? The
McInnis employer has until late July or early August6 to ask the High Court to zap or lower the mandatory minimum. Stay tuned.
1 Their formal titles on the appellate court are ‘Justices,’ but ‘Judges’ is easier to say, no? Is for me.
2 I’m talking here only about noncompetes for which the employees did not get a bonus or other sweetener. If they had, courts would more likely enforce them. Still, how big a bonus, or how sweet the sweetener, is an interesting question, too interesting to keep this piece short. Call me at 312-268-6795 or email me at [email protected] if you want to talk about it.
3 ‘Him,’ ‘his,’ and ‘he,’ of course, also mean ‘her’ and ‘she.’
4 I know, easy on the footnotes. Relax. In addition to the mandatory minimum, post-employment noncompetes can’t last any longer or apply any wider than is needed to protect the company. How long and how wide depends on each individual and his job. I could go on and on about permissible length and width, including for executives, brokers, doctors, lawyers (they’re illegal for us, so suck it) and salespeople. But as I said in note 3, you’d get bored. Call me.
5 Some say the Diedrich court ‘required’ a mandatory minimum. I wouldn’t go that far.
6Court rules require appellate losers to ask SCOIL to review the case within 35 days after the appellate ruling, or forever hold their peace. The McInnis ruling was issued on June 25th, but ‘corrected’ on July 2nd. Plus, there may be a few days more based on when the ruling was actually ‘entered’ on the docket. So call it August 10th as the deadline.