On June 25, 2015, the Illinois Appellate Court, First District, held that a noncompetition provision in an employment contract is unenforceable for lack of consideration when the duration of the employee’s employment is less than two years and there is no other consideration. McInnis v. OAG Motorcycle Ventures, Inc., 2015 IL App (1st) 130097 (June 25, 2015). A motorcycle salesman who resigned after 18 months filed a declaratory judgment action seeking to declare restrictive covenants in his employment contract unenforceable. The employer filed a counterclaim to enforce the restrictive covenants. The trial court ruled in favor of the former employee; and the employer appealed. The First District affirmed the ruling of the trial court and, in so doing, upheld and clarified its 2013 appellate decision in Fifield v. Premier Dealer Services, Inc.

Under Illinois law, for a post-employment restrictive covenant such as a noncompetition agreement to be valid and enforceable, its terms must be reasonable. A noncompetition agreement is reasonable only if it: (1) is no greater than required to protect a legitimate business interest of the employer; (2)does not impose an undue hardship on the employee; and (3) is not injurious to the public. The unique circumstances of each case must be analyzed to determine reasonableness. However, before considering whether a restrictive covenant is reasonable, a court must first determine: (1) whether the restriction is ancillary to a valid employment agreement; and (2) whether the restriction is supported by adequate consideration. If a noncompetition agreement is not supported by adequate consideration, it is invalid and unenforceable as a matter of law. Consideration is something of value exchanged for a promise. Continued employment may constitute adequate consideration to support a noncompetition provision in an employment contract, but only if it is substantial. The appellate court’s decision in McInnis reestablishes the bright-line rule announced in Fifield, that continued employment for less than 2 years is not sufficient consideration to support a noncompete agreement.