The Illinois Supreme Court recently announced that it was not going to review an Illinois Appellate Court decision, Fifield v. Premier Dealer Services, Inc., which held that, absent other consideration, two years of employment is required for a restrictive covenant to be deemed supported by adequate consideration – even where the employee signed the restrictive covenant as a condition to his employment offer – and even where the employee voluntarily resigned.
The Appellate Court’s decision generated significant discussion among practitioners, as well as some expectation that the Illinois Supreme Court would weigh in. To date, no published decision has either cited it or applied it.
As we noted in a blog post last July, to our knowledge, Fifield is the first Illinois state court decision to hold that an offer of employment by itself is not sufficient consideration for a restrictive covenant.
Absent further developments in the Illinois courts or legislative intervention, Illinois employers hoping to enforce restrictive covenants within two years of the signing date should provide some consideration in addition to the offer of employment or continued employment (in the case of current employees). Alternatively, employers could also consider offering “garden leave” – a mandatory notice period at the end of employment during which the employee remains on the payroll (and therefore continues to owe a fiduciary duty of loyalty to the employer then paying him or her) but is not expected to perform any services.
- Member of the Firm