Restrictive Covenants in Illinois: Adequate Consideration Problems Show that the Common Law is an Inadequate Solution

Illinois courts have long dealt with whether restrictive covenants, specifically non-compete clauses, can and should be enforced when they involve employees of businesses. Many aspects of restrictive covenants have been litigated, but a recent Illinois Appellate Court case analyzed the issue of what is adequate consideration in order to enforce a restrictive covenant against a former employee. The First District in Fifield v. Premier Dealer Services, Inc., affirmed a bright-line, two-year rule for deciding how long an employee must work for an employer before a re-strictive covenant can be enforced. The two-year rule protects employees because an employer cannot require them to sign a non-compete and then terminate their employment the next day. However, the two-year rule does not adequately take into account the employer’s standpoint because an employee could voluntarily resign one day short of two years of employment and the restrictive covenant would be void. This note analyzes the bright-line, two-year rule in Illinois for adequate consideration and shows its development over time; it looks to how other states have tried to solve this very problem; and it discusses how the problem in Illinois could be fixed either through legislative or judicial change