Bellas & Wachowski
Bellas & Wachowski
Attorneys at Law

Non-Compete Covenants: 

The Limits of Protection


Non-compete covenants (commonly known as a "covenant not to compete" or CNC) have been a legal component of the commercial world for decades, but the enforcement landscape has always unpredictable. Just because you hold in your hand a signed copy of a non-compete agreement from a former employee or business partner does not mean you will be able to make the terms stick, especially in Illinois.


On the face of it, the objective of a non-compete agreement is to prevent a former employee from benefitting unfairly from proprietary information or customer relationships bootlegged from their previous employer. Especially in areas such as sales or product development, an ex-employee can wreak havoc by leveraging knowledge acquired by working for you. This may include customer databases, confidential pricing, proprietary trade secrets and other exploitable information. In a sense, an ex-employee working as an adversary allows them to achieve competitive parity with your business without the years of blood sweat and tears you have invested.


For all these reasons, it makes sense to set up roadblocks to such threats before they materialize. In an ideal world, the non-compete agreement would make a departing employee think twice about violating its parameters.


In theory, a CNC proscribes an employee from working for a direct competitor (or sometimes in the same industry) for a defined period of time. It may also specify other parameters, most commonly a geographic area. In practice, however, the mere existence of a signed non-compete document does not remotely guarantee that you will be able to enforce the document in the case of an unfriendly parting of the ways.  


Because the U.S. legal system places a high value on the right of a worker to earn a living, it is essential that a CNC be written so that it will be perceived as fair to both parties.


What can go wrong?


In a nutshell, a restrictive covenant needs to stake out a territory that the court will not perceive as overly restrictive. In other words, the court will determine whether the need to protect the employer overrides the prerogative of the employee to work. A CNC is most likely to be overturned because it reaches beyond what the court believes is reasonable.


Although the boundaries of "reasonable" are subjective by nature, that doesn't mean that the legal interpretation of a CNC is nothing but a free for all. There are a number of guidelines that predict how a judge will view any given non-compete agreement in court.


The primary test of a non-compete agreement is whether there is a sound basis for imposing it in the first place. First and foremost, the court needs to see a protectable interest as the basis of the document. Most courts will frown on a CNC that appears to be merely punitive or an instrument of intimidation.


The nature and scope of the business itself are the other core considerations, and they are intrinsically linked to establishing the key restrictions in the document. Without considering these fundamentals, the duration of the ban and any geographic restrictions may be seen as arbitrary. It is essential to consider these aspects of the relationship before setting terms.


Beyond the quality of advocacy and the vicissitudes of the judicial system, it is the integrity of your particular non-compete agreement that will determine its enforceability in court. The ideal scenario, of course, is to build a CNC that fairly protects your business interests as well as those of employees - and will never see the inside of a courtroom.


Bellas & Wachowski has been helping small business owners manage employment law challenges for over 40 years. For more information on restrictive covenants or other areas of business law, visit our website or contact George Bellas at 823-9030 x219.  


Attorneys Who Care About Their Clients


At Bellas & Wachowski our focus is always on achieving the best results for our clients. We have developed many innovative methods to provide our clients with added protection. For example, in our personal injury work, we take a unique Total Guard Approach that ensures clients' finances will be protected during litigation. And in our business law section, we offer a Corporate Maintenance Plan that helps maintain a business's corporate standing.




Bellas & Wachowski
15 North Northwest Highway
Our Attorneys
George S. Bellas
Peter C. Wachowski
William Peter Boznos
 Misty J. Cygan
Vicki Hathaway Gonzalez
Patrick Andes

B & W News

George was appointed a Special Assistant Attorney General to defend a Circuit Court Judge who was charged in a federal civil lawsuit with discriminatory conduct.  The Complaint was dismissed.


Once again George has been recognized in Chicago Magazine as an Illinois Super Lawyer for his work in business litigation.  This recognition is based on the voting of other lawyers. 


George had another article published in the State Bar newsletter regarding the consequences of publishing a litigant's personal information in a pending lawsuit.

Check out George's Biz Blog.