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Restrictive Covenants

Chicago Employment Lawyers Litigate Restrictive Covenants

Experienced representation for companies and senior executives asserting their rights

Restrictive covenants are essential aspects of 21st century employment. Businesses need to protect their trade secrets, client relations and personnel from potential corporate piracy. But, in a free market, executives have the right to offer their services to the highest bidder. To resolve the tension between these opposing goals, attorneys hammer out noncompete agreements, restricting what employees can do after they’ve left the company. When noncompetes work, everyone benefits. When agreements break down, parties call Schwartz Law Group, LLC in Chicago.

Our attorneys have more than 50 years of combined experience in corporate litigation, and have dealt with a variety of restrictive covenants, such as noncompete agreements, non-solicitation agreements and non-disclosure agreements.  We understand what makes a noncompete valid, how to enforce it and how to render it null and void. If you’re facing a worst case scenario, as a company that’s effectively been raided or as an executive who’s been forced to the sidelines during what should be your high-earning years, Schwartz Law Group, LLC can help.

Testing the validity of restrictive covenants in Chicago

The first hurdle in restrictive covenant litigation is determining whether the agreement is even valid. Under Illinois law, a covenant is legally enforceable if it satisfies these three conditions:

  • The employee has served the company for at least two years.
  • The company has a reasonable business purpose for the restrictions.
  • The restrictions are not unreasonable in scope, duration or geographic area.

What constitutes a reasonable purpose or a reasonable restriction is highly debatable, so make sure you have a skilled trial attorney debating those points for you.

Enforcing restrictive covenants and applying the proper remedies for breaches

If the covenant is found to be enforceable, there are still questions of whether a breach occurred and what remedy should be ordered. If a former employee is found to be in breach of a restrictive covenant, a court might order:

  • Injunctive relief — The court can order the former employee to cease actions that injure the former employer.
  • Monetary damages — The court can order the employee to pay the company damages for losses due to the breach.
  • Punitive damages — In extreme cases, where the employee acted with malice, the court may assess damages to punish the unscrupulous behavior.

Violations of restrictive covenants can be fodder for additional business entity litigation. If the officers who hired the new executive did so with an inducement to violate the noncompete agreement, they’ve opened the company to liability, which might easily be seen as a breach of fiduciary duty on their part.

Contact our experienced employment litigators for restrictive covenant disputes in Chicago

Schwartz Law Group, LLC has vast litigation experience on internal business matters. We can help resolve conflicts over restrictive covenants for employers and employees. To schedule an initial consultation, call 312-436-1442 or contact us online.

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