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Litigation: Illinois Supreme Court rejects the “legitimate business interest” test

A timely reminder to refresh your company’s non-compete agreements in accordance with current standards and in anticipation of future litigation

A recent Illinois Supreme Court decision provides corporate counsel with an overdue reminder to re-examine the language and scope of their companies’ non-compete agreements. While non-compete agreements are often swept under the rug when a new employee begins work, the potential outcomes are catastrophic. States can differ on their views of non-compete agreements, so it is crucial to have a hold on how your state treats these restrictive covenants.

In Reliance Fire Equipment Co. v. Arredondo, the Illinois Supreme Court held that a non-compete agreement is valid and reasonable if all three components are met:

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Matthew Walsh

Matthew Walsh is a partner in the Chicago office of Hinshaw & Culbertson LLP and co-leader of the firm's Business Litigation Department. His practice concentrates...

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