Home » Uncategorized » Employee Friendly Restrictive Covenant Doctrine Becomes More Entrenched in Illinois

Employee Friendly Restrictive Covenant Doctrine Becomes More Entrenched in Illinois

Prairie Rheumatology Associates v. Maria Francis, Case No. 3-14-0338 (Ill. App. 3rd Dist. Dec. 11, 2014)

Now, both the Third and First District Appellate Courts have ruled that enforcement of a restrictive covenant, such as a non-compete agreement, against an at-will employee require at least two years of at-will employment.  This rule, first set down in Fifield v. Premier Dealer Services, 993 N.E. 2d 938 (Ill. App. 1st Dist. 2013); Fifield v. Premier Dealer Services, 374 Ill. Dec. 565 (Ill. 2013)(certiorari denied), is now the de facto law in Illinois, making it a bit easier in Illinois for employees to compete with their former employers.

In Prairie, a medical practice based in Joliet, Illinois sought an injunction against one of its former doctors, who had started working at a competitor in New Lenox, Illinois.  When she began working at Prairie, she had signed a Physician’s Agreement, including a non-compete with a fourteen mile radius and a two year term.  The New Lenox competitor was within fourteen miles of Prairie.

The trial court entered an injunction against the doctor, prohibiting her from treating Prairie’s present patients, but allowing her to continue to treat her past patients, and any new patients that she received.  Prairie appealed, and the doctor cross-appealed.

The appellate court found that there was insufficient consideration to support the restrictive covenant.  In particular, the 3rd District started by finding that, to be enforceable, a restrictive covenant must (1) be ancillary to either a valid transaction or a valid relationship, and (2) must be supported by adequate consideration.  As the doctor was not employed by Prairie for two years, there was not adequate consideration; i.e., the 3rd District followed the bright line rule set forth by the 1st District in Fifield.

Under this rule employers must show at least two years of at-will employment, or some other adequate consideration.  However, what else would constitute adequate consideration has not been determined.


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