Illinois Non-Competes Require Adequate Consideration

Following along with the trend of limiting physician non-competes, Illinois courts have taken steps to limit the instances in which non-compete provisions are enforceable.  Illinois courts have historically disfavored non-compete provisions and considered them unlawful restraints on trade.  That said, the courts will hold such non-compete provisions to be enforceable when ancillary to a valid contract or business relationship, deemed reasonable to protect a legitimate business interest and supported with adequate consideration.  In other states applying a three-factor test such as this, the employment opportunity itself is considered adequate consideration for a non-compete provision included in an employment contract.  However, Illinois appellate courts have generally held (with some exceptions) that a non-compete is not enforceable without either two (2) years of consecutive employment or some other type of consideration (i.e. raises, bonuses, promotions).  Even in instances in which the employee voluntarily resigned within the two (2) year period, some Illinois courts have refused to enforce the post-employment non-compete provision.  Until the Illinois Supreme Court addresses this issue, it is advisable for Illinois practices to offer additional compensation, in the form of a signing or commencement bonus, or some other form of tangible consideration, in exchange for the physician-employee’s agreement not to compete following employment.