Author: Kendra Kutko, Associate Attorney at The Case Law Firm, LLC

            In an employment climate where non-competition agreements, non-solicitation agreements, and other restrictive covenants have become rather standard mechanisms that allow employers to protect their economic interests, the rising number of employees who sign these agreements as a condition of hire must confront the unsavory possibility that they may one day face a lawsuit when they decide to leave those employers in pursuit of other job opportunities.  Indeed, our practice has seen a marked increase in cases where employers have filed suit against former employees, alleging breaches of such agreements.

            The task of defending against these types of employer-initiated legal actions entails extensive time and cost for employees who often have modest resources.  However, in one of our recent cases, we obtained a great decision by the Circuit Court of Cook County, Illinois that should provide optimism for employees who currently remain bound by restrictive covenants and should provide pause to employers who may contemplate filing suit over these agreements.

            In TriNet International, LLC v. Synchronous Solutions, Inc. et al., No. 2011 L 005526, the employer filed a third-party complaint against its former employee for breach of contract, breach of fiduciary duty, and tortious interference with contract after the employee left the company to pursue another career opportunity.  The employee had signed an employment agreement with the employer, which contained a non-solicitation provision and a non-competition provision.  All causes of action filed against the employee derived from the employer’s “information and belief” that the employee allegedly “solicited” the employer’s client and “intentionally and purposefully induced” the employer’s client to terminate its business relationship with the employer so as to steal that corporate opportunity for the employee’s own financial benefit.  The employee adamantly denied these allegations, but most significantly, the employer presented no facts in support of these allegations.  

            The employee subsequently moved to dismiss the third-party complaint in its entirety, arguing that the employer presented mere conclusions of fact and law without providing any detailed factual underpinnings with which to support its causes of action such that the third-party complaint remained deficient under Illinois fact-pleading standards.  In ruling on this motion, the Circuit Court determined that the employer’s allegations against the employee lacked sufficient factual specificity to meet the Illinois fact-pleading requirements.  Consequently, the Circuit Court granted the employee’s motion to dismiss.  (1/12/12 Order Granting Third-Party Defendant’s Motion to Dismiss Third-Party Complaint, Bartkowicz, J.).     

       
             Although it seems unlikely that employers will shy away from filing suit against employees over restrictive covenants any time soon, the TriNet decision provides some reassurance that, at least in the Illinois courts, an employer must have more than its own speculation or “information and belief” that the employee engaged in wrongful conduct before doing so.