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Reliable Fire Equipment Company v. Arredondo, No. 111871, 2011 WL 6000743 (Dec. 1, 2011)

Articles Discussing Case:

Illinois Supreme Court Clarifies Employer’s Burden in Enforcing Post-Employment Covenants Not-to-Compete

Franczek Radelet P.C • December 12, 2011
A decision issued last week by the Illinois Supreme Court clarified the requirements in Illinois for enforceable post-employment restrictive covenants. In Reliable Fire Equipment Co. v. Arrendondo, the Court reaffirmed the longstanding requirement that a “legitimate business interest” is, in fact, a necessary element in determining the enforceability of a post-employment covenant not-to-compete. At the same time the Court rejected the view prevailing for many years among the lower Illinois courts that the only means to establish a legitimate business interest was for an employer to demonstrate either a near-permanent customer relationship or the existence of confidential and/or trade secret information. Under the Reliable Fire decision, courts must now look to the “totality of circumstances” to determine whether a non-compete restriction is justified by a legitimate business interest and otherwise is enforceable.

Illinois Supreme Court Resolves Split in Appellate Courts and Rejects Use of Rigid Tests to Evaluate Restrictive Covenants

Ogletree Deakins • December 06, 2011
On December 1, 2011, the Illinois Supreme Court issued a unanimous opinion in Reliable Fire Equipment Company v. Arredondo, No. 111871, 2011 WL 6000743 (Dec. 1, 2011) holding that courts cannot use rigid, structured tests to determine whether restrictive covenants are enforceable. Specifically, the Illinois Supreme Court held that while courts must continue to evaluate whether an employer has a legitimate business interest that justifies the use of a restrictive covenant, courts should not use isolated, inflexible factors in making this assessment.
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