A couple years ago, the Illinois First District Appellate Court decided the case of Fifield v. Premier Dealer Services, 2013 IL App. 120327.  There, the Court held that, absent other consideration, two years of employment are required to constitute adequate consideration for a restrictive covenant, regardless of whether the covenant was signed at the outset of employment or after, and regardless of whether the employee quit or was fired.  Since then, some Judges in the United States District Court for the Northern District of Illinois have applied Fifield, and others have declined to do so.

Earlier this week, the United States Court of Appeals for the Seventh Circuit issued its first opinion reviewing a decision in which the District Court applied, or refused to apply, Fifield:  Instant Technology LLC v. DeFazio, (Case Nos. 14-2132 & 14-2243).  In the District Court, Judge Holderman applied Fifield. In its opinion, however, the Seventh Circuit simply reviewed the District Court’s factual determinations, determined that they were not clearly erroneous, and did not discuss Fifield or its application by the District Court at all.  The Court did, though, spend some time discussing an anti-raiding clause that was also at issue.  The Seventh Circuit explained that, because Instant Technology had such high workforce turnover (77% of the people who worked there two years before the trial left in the interim), it could not argue that its interest in maintaining the stability of its workforce was a legitimate business interest sufficient to support an anti-raiding clause that prohibited former employees from soliciting Instant Technology employees to join competing companies.