On December 7, 2007, the Illinois First District Appellate Court in Cambridge Engineering, Inc. (“Cambridge”) v. Mercury Partners 90 BI, Inc., No. 1-06-0758 (1st District Appellate Court of Illinois, Sixth Division) determined that Cambridge’s non-solicitation and non-competition provisions were overly broad and unenforceable because the provisions prevented former Cambridge employees from (a) taking any job, “even that of a janitor,” with a competitor (b) working in markets that Cambridge did not do business in, and (c) speaking with Cambridge customers that the employer never serviced or knew were Cambridge customers (thereby requiring the former employee to speculate about who he can and cannot contact/solicit). Although the Appellate Court’s decision was not surprising given Illinois case law, the Appellate Court’s unsolicited opinion/warning to employers who write overly broad restrictive covenants is noteworthy.
Specifically, the Appellate Court wrote/warned after its analysis that:
Allowing extensive judicial reformation of blatantly unreasonable post-termination restrictive covenants may be against public policy, because of the potentially severe effect it could have on the employees who are subject to such covenants. Such reformation, if permitted by courts, would give employers an incentive to draft restrictive covenants as broadly as possible, since the courts would automatically amend and enforce them to the extent that they were reasonable … This could have a severe chilling effect on employee post-termination activities.
The Appellate Court went on to state that judicial reformation (i.e. blue penciling) is unfair to the employee who is “unschooled in the law” and “cannot be expected to know to what extent such a covenant is in enforceable.” Accordingly, “blatantly unreasonable” restrictive covenants, such as the ones authored by Cambridge, should not be revised to comply with Illinois law.
The Appellate Court’s unsolicited opinion will likely find its way into the response of every employee who is faced with an employer’s request to modify or blue pencil an existing restrictive covenant. Accordingly, Illinois employers who rely on the enforcement of restrictive covenants should confer with legal counsel familiar with Illinois restrictive covenant law to ensure that the restrictions contained in their Agreements do not fall into the “blatantly unreasonable” category enunciated in Cambridge.