State Supreme Court affirms business-interest test for noncompetes — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily
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State Supreme Court affirms business-interest test for noncompetes

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in Employment Law,Human Resources

For many years, Illinois courts assessing the enforceability of noncompete agreements required employers to demonstrate that they had a legitimate business interest before deciding whether the agreement was reasonable.

That view was challenged in Sunbelt Rentals, Inc. v. Ehlers, 394 Ill. App. 3d 421 (4th Dist., 2009), when an appellate court rejected the legitimate business-interest test, finding that the only relevant considerations in determining the validity of a noncompete agreement are the reasonableness of the time and territory restrictions.

As a result, a question arose concerning whether Illinois recognizes the legitimate business interest as a requirement of an enforceable re­­stric­­tive covenant. The stage was set for an Illinois Supreme Court challenge.  

Smoldering dispute

On Dec. 1, 2011, a unanimous Illinois Supreme Court issued its decision in Reliable Fire Equipment Co. v. Arredondo et al. (2011 IL 11871, I...(register to read more)

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