Tuesday, August 28, 2018

Are Your Non-Solicitation Agreements Too Broad?

Illinois law closely scrutinizes non-compete and non-solicitation agreements, and in the event a court finds them to be too restrictive on the employee, it usually will not hesitate to find the agreement to be unenforceable. Therefore, it is imperative that employers enlist the help of attorneys with considerable experience in this area of law when drafting such agreements. The importance of doing so was made clear in a recent case out of the Northern District of Illinois.

The case, captioned Call One, Inc. v. Anzine, involved an employer who brought suit against one of its former sales representatives for violating a non-compete agreement and misappropriating trade secrets. The non-compete agreement prohibited her from soliciting any customer of her employer to sell telecommunications services or products after she had ceased working for the employer. The employee argued that this non-compete agreement was overly broad, since it prohibited solicitation of a large number of potential customers, many of whom the employee had no interaction with during her employment.

The court agreed with the employee, and found that this non-compete agreement was overly broad and not necessary to protect its legitimate business interests. The court found that the restriction would prevent the employee from soliciting customers who ended their relationship with the employer more than a decade previously.

The court also rejected the employer’s argument that the employee misappropriated trade secrets by taking the employer’s “customer report,” which contained information like monthly recurring charges for each employee. The court found that this information was not entitled to trade secrets protection because the employer did not take reasonable steps to keep the report secret.

This case is just the latest example of the close scrutiny that Illinois law gives to non-compete agreements. Illinois courts have generally rejected agreements that prevent former employees from contacting people whom they never had contact with during the course of their employment. Non-compete agreements must be carefully tailored to suit the legitimate business needs of an employer, and nothing more. Contact us for help doing this.