CBA Record July-August 2017

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compete agreement against certain hourly
workers.
While some may believe an employer
should protect its interest as it relates to
a cook by using a confidentiality agree-
ment, it is not implausible to believe that
a non-compete agreement could be used
to accomplish the same protection for
the employer. Employers have a higher
likelihood that a non-compete agreement
will be upheld if the agreement is focused
on preserving customer and supplier rela-
tionships instead of outright denying the
employee from working for a competitor.
What Business Owners and CEOs Should
Know, Crain’s CustomMedia, http://www.
content-labor-employment-law.
Conclusion
It is still imperative to remember that, on
both a national and local scale, non-com-
pete agreements are not favored by courts
and the legislature. A 2016 White House
report believes non-compete agreements
reduce job mobility, remove bargaining
power for employees and minimize the
labor pool for other companies. Non-Com-
pete Agreements: Analysis of the Usage,
Potential Issues, and State Reponses (May
2016),
default/files/non-competes_report_final2.
pdf. The U.S. Department of Treasury
also commissioned a report and found
that non-compete agreements lower wage
growth, burden the interests of workers
and are used excessively. Non-Compete
Contracts: Economic Effects and Policy
Implications, Office of Economic Policy,
U.S. Department of the Treasury, March
2016. Consequently, employers should
be proactive and cautious in crafting and
negotiating non-compete agreements.
Engaging in this process will benefit an
employer who hopes to enforce the non-
compete agreement in the future.
Nonetheless, covenants that are now
prohibited under the Act for certain
employees do provide necessary and legiti-
mate business protection for employers. An
employer still has the right to protect its
confidential information and trade secrets.
An employer also has the right to restrict
a departing employee from trying to steal
information, poach clients and solicit other
individuals in other business relationships.
Businesses could see the Act putting Illinois
at a further disadvantage and forcing more
companies to relocate to other states in
hopes of assuring the protection of busi-
ness information and assets. There are clear
reasons why Illinois is consistently ranked
among the worst states in the United States
in which to conduct business. As a result,
a thoughtful balancing of the interests of
both employers and employees is war-
ranted.
With the Act now enforceable in
Illinois, employers contemplating non-
compete agreements for employees making
$13.01 per hour and above should seriously
consider the necessity, purpose, and legality
of a non-compete agreement. Non-com-
pete agreements limit various aspects of
an employee’s opportunities, including the
ability to find new employment, upward
mobility of workers looking for a higher
wage, advancement of an employee with
new skills obtained from a current or previ-
ous employer, and the negotiation power
to demand higher wages with a current or
future employer. Jimmy John’s, at 17.
The impact of the Act will likely gain
strength in the coming years. In Chicago,
the minimumwage will increase to $13.00
per hour on July 1, 2019, while Cook
County’s minimum wage will increase to
$13.00 per hour on July 1, 2020. Because
of these minimum wage increases, prac-
titioners can assume that more individu-
als employed in Cook County will earn
wages higher than the $13.00 per hour
rate explicitly mentioned in the Act.
Consequently, the potential exists for a
larger pool of employees to gain protection
from the Act, thus dissuading employers
from entertaining the thought of imple-
menting wide-scale use of non-compete
agreements.
Matthew E. Misichko is an associate in the
Commercial Practices Group at Handler
Thayer, LLP
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38 JULY/AUGUST 2017
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