Restrictive Covenants, Illinois Commodities Lawyer

QUESTION

What are restrictive covenants?

ANSWER

An enforceable restrictive covenant prohibits an employee or the seller of a business from engaging in conduct that would harm a "protectable business interest" of the employer or buyer. Restrictive covenants include covenants not to compete; covenants not to solicit customers or employees; and covenants not to disclose trade secrets or other confidential information. Although the courts consider many of the same factors when they decide whether a restrictive covenant in an employment contract or a contract for the sale of business should be enforced, there are some differences. The answers to these Frequently Asked Questions will focus initially upon restrictive covenants in employment contracts. The answer to Question 5, below, will focus on the way courts view restrictive covenants in contracts for the sale of business.

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