Non compete clause in my employment contract

Question

Accepted Answer

Well, in many states such non-compete clauses have been nullified.

Here is a bill on covenants not to compete:

http://www.ilga.gov/legislation/96/HB/09600HB4040.htm

Here is the actual text, it is quite interesting. You may want to confer with your State's attorney general's office and if that doesn't help, try looking for an attorney at www.attorneypages.com:

A BILL FOR

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1 AN ACT concerning business.

2 Be it enacted by the People of the State of Illinois,

3 represented in the General Assembly:

4 Section 1. Short title. This Act may be cited as the

5 Illinois Covenants Not to Compete Act.

6 Section 5. Definitions. As used in this Act, the following

7 definitions apply:

8 (a) "Promisor" means a party against whom a covenant not to

9 compete is sought to be enforced.

10 (b) "Promisee" means a party seeking to enforce a covenant

11 not to compete.

12 (c) "Covenant not to compete" means a restriction which

13 prevents a promisor from working for or providing personal

14 services to a person or entity in competition with the

15 promisee.

16 (d) "Key employee" or "key independent contractor" means

17 any employee or independent contractor who has (i) substantial

18 involvement in the executive management of the promisee's

19 business, (ii) direct and substantial contact with customers of

20 the promisee, (iii) knowledge of bona fide trade secrets or

21 other proprietary information of the promisee, (iv) such unique

22 skills that the person has achieved a high degree of public or

23 industry notoriety, fame, or reputation as a representative of

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1 the promisee, or (v) is among the highest paid 5% of the

2 promisee's employees or independent contractors in the year

3 preceding a separation from service by the key employee or key

4 independent contractor.

5 (e) "Legitimate business interest" means (i) customer

6 relationships developed and maintained by the promisee, (ii)

7 trade secrets or other proprietary information of the promisee

8 to which a promisor was granted meaningful or regular access,

9 or (iii) business goodwill of the promisee.

10 (f) "Trade secrets" means any trade secrets as defined in

11 the Illinois Trade Secrets Act and the common law under such

12 Act.

13 Section 10. Criteria for enforceability of covenants not to

14 compete. A covenant not to compete is void as an illegal

15 restraint of trade and may not be enforced by a court in this

16 State, unless:

17 (a) the promisee is a key employee or key independent

18 contractor;

19 (b) the promisor either (i) informs the key employee or key

20 independent contractor in a written offer at least 2 weeks

21 prior to the first day of the employment or contractor

22 relationship that a covenant not to compete is required as a

23 condition of employment or services, or (ii) enters into the

24 covenant not to compete with the promisee upon (A) a material

25 advancement or promotion of the key employee or key independent

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1 contractor, or (B) payment of a material bonus or material

2 increase in rate of regular compensation; and

3 (c) the covenant not to compete is narrowly tailored to

4 support the protection of a legitimate business interest of the

5 promisee against actual or threatened infringement by the

6 promisor.

7 Section 15. Rebuttable presumptions.

8 (a) A covenant not to compete will be presumed not to meet

9 the criteria under subsection (c) of Section 10 if (i) the

10 duration of the covenant not to compete exceeds one year, (ii)

11 the geographic area of the covenant not compete extends beyond

12 any region in which the key employee or key independent

13 contractor provided employment or contractor services for the

14 promisee during the one year preceding termination of the

15 employment or independent contractor relationship, or (iii)

16 the type of personal services activity subject to the covenant

17 not to compete extends beyond the nature of work the key

18 employee or key independent contractor provided to the promisee

19 during the one year preceding termination of the employment or

20 independent contractor relationship.

21 (b) A promisee may introduce evidence to rebut the

22 presumptions in subsection (a) of this Section upon a showing

23 that more extensive restrictions are necessary to protect a

24 legitimate business interest.

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1 Section 20. Remedies and procedures in actions to enforce

2 covenants not to compete.

3 (a) Modification. For any action brought to enforce a

4 covenant not to compete in which the covenant is found not to

5 meet the criteria in subsection (c) of Section 10, the court

6 retains discretion to modify the covenant not to compete to the

7 extent necessary to make the restraint reasonable under the

8 circumstances. If the court so modifies the covenant, the court

9 may not award the promisee any damages for a breach of the

10 covenant not to compete occurring before an order of

11 modification.

12 (b) Attorney's Fees and Costs of Litigation. For any action

13 brought to enforce a covenant not to compete in which the

14 subject agreement contains a provision granting the promisee a

15 right to recover attorney's fees or other costs of litigation

16 from the promisor, such provision shall be construed to provide

17 the promisor with a mutual entitlement to attorney's fees or

18 other costs of litigation should it be the prevailing party

19 against the promisee.

20 (c) Declaratory Judgment. Any promisor has the right to

21 file an action under Section 2-701 of the Code of Civil

22 Procedure for a declaration of his or her rights under a

23 covenant not to compete, and in the event the promisor is the

24 prevailing party in such a proceeding, the court may award him

25 or her reasonable attorneys' fees and court costs.

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1 Section 25. Exceptions. This Act does not apply to and

2 shall not modify the common law with respect to:

3 (a) any agreement relating to the solicitation, hiring, or

4 contact with employees, vendors, or customers;

5 (b) any confidentiality agreement;

6 (c) any agreement between (i) a corporation, partnership,

7 limited liability partnership, limited liability company, and

8 (ii) its shareholders, partners, or members; and

9 (d) an agreement between an employer and employee under

10 which an employee receives incentive compensation of any kind,

11 and where the employer is entitled to forfeiture of such

12 compensation for competition.

13 Section 99. Effective date. This Act takes effect January

14 1, 2010.

Non compete clause in my employment contract

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