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Hoff v. Mayer

June 4, 2002

WILLIAM BRUCE HOFF, JR., AND CATHERINE M. HOFF, PLAINTIFFS-APPELLANTS,
v.
MAYER, BROWN AND PLATT, AN ILLINOIS PARTNERSHIP, DEFENDANT-APPELLEE.



Appeal from the Circuit Court of Cook County. No. 00 CH 12022 Hon. Bernetta D. Bush, Judge Presiding.

The opinion of the court was delivered by: Justice McBRIDE

On August 16, 2000, William Bruce Hoff, Jr. (Hoff), and Catherine Hoff, his wife, filed a complaint for declaratory judgment and other relief in the circuit court of Cook County against Mayer, Brown & Platt (MBP), a Chicago law firm. Thereafter, MBP filed a motion to dismiss plaintiff's complaint pursuant to section 2-615 of the Illinois Code of Civil Procedure (735 ILCS 5/2-615 (West 2000)). On June 12, 2001, the trial court granted defendant's motion. Hoff now appeals.

Hoff argues on appeal: (1) that the retirement provision in MBP's restated plan is a restrictive covenant and is contrary to Illinois public policy; (2) that the provision is unreasonably broad; and (3) that under any circumstance, Hoff is entitled to a trial on the issues of whether he has materially competed with MBP and whether MBP can reasonably refuse to determine that any alleged damage caused by Hoff has ended.

According to the complaint, Hoff resigned as a partner with MBP on July 9, 1993. At the time of his resignation, Hoff was 60 years old and had been with MBP for 36 years. Hoff requested retirement income from MBP. MBP has refused to pay Hoff retirement income based on its "Restated Partnership Agreement, Retirement, Disability & Death Benefit Program" (Restated Plan or Plan). In his complaint, Hoff alleges that he should have been receiving in excess of $94,000 per year in retirement income, plus additional cost-of-living adjustments, pursuant to the Plan, since his resignation in 1993. From the record below, there is no dispute that Hoff left MBP to become a founding partner in another Chicago firm - Kasowitz, Hoff, Benson & Torres. Additionally, Hoff received all earned fee income, capital shares, financial benefits and other revenue to which he was entitled, based on his association with MBP and his years of service to the firm. He disputes only MBP's decision to deny him retirement benefits.

A trial court ruling on a motion to dismiss under section 2-615 interprets all pleadings and supporting documents in the light most favorable to the nonmoving party. Dial Corp. v. Marine Office of America, 318 Ill. App. 3d 1056, 1060, 743 N.E.2d 621 (2001). The lower court should grant a motion to dismiss only where it finds that no set of facts would support a cause of action. Dial Corp., 318 Ill. App. 3d at 1060. Because this approach does not require the trial court to weigh facts or determine the credibility of witnesses, the appellate court reviews the matter de novo. Dial Corp., 318 Ill. App. 3d at 1060.

The dispute here centers around sections 3.1 and 3.2 of MBP's Restated Plan, and Rule 5.6 of the Illinois Rules of Professional Conduct (134 Ill. 2d R. 5.6). MBP's Restated Plan states:

"3.1 In General. If a member's membership in the firm is terminated by reason of his or her retirement on a retirement date (as described in subsection 3.2) on or after January 1, 1987, he or she will be provided with a retirement income in an amount determined in accordance with the provisions of subsection 3.3.

3.2 Retirement Date. The 'retirement date' for a member is the one of the following dates that applies in his or her case:

(a) Normal Retirement Date. The 'normal retirement date' for a member shall be the first day of the calendar month as of which he or she elects to retire or is retired by the firm, provided in either event that, as of such day, he or she shall have also either (i) attained at least 65 years of age or (ii) attained at least 62, but not yet attained 65, years of age and completed at least 20 years' associated with the firm.

(b) Early Retirement Date. The 'early retirement date' for a member shall be the first day of the calender month as of which he or she elects to retire or is retired by the firm, provided in either event that, as of such day, he or she shall have also attained at least 60, but not yet 62, years of age and completed at least 20 years' associated with the firm.

For purposes of this program, a member shall not be deemed to have elected to retire prior to attaining age 65 unless he or she substantially ceases the active practice of law on a permanent basis or his or her post-retirement practice of law is determined by the firm to be consistent with his or her status as a retiree."

Rule 5.6(a) of the Illinois Rules of Professional Conduct, entitled "Restrictions on Right to Practice," provides: "A lawyer shall not participate in offering or making: (a) a partnership or employment agreement that restricts the rights of a lawyer to practice after termination of the relationship, except an agreement concerning benefits upon retirement***." 134 Ill. 2d R. 5.6(a).

Hoff first claims that MBP's Restated Plan is basically a restrictive covenant and is contrary to Illinois public policy. Hoff argues that whether MBP's Plan comports with Rule 5.6(a) depends on whether the "benefits" under the Plan constitute "retirement benefits" under Rule 5.6(a).

Hoff correctly points out in his brief that under Rule 5.6(a), a lawyer may not participate in an agreement that "restricts the rights of a lawyer to practice" after a relationship between the lawyer and firm has ended. 134 Ill. 2d R. 5.6(a). Illinois public policy has consistently discouraged law firm employment agreements that contain non-competition clauses or restrictive covenants. Stevens v. Rooks Pitts & Poust, 289 Ill. App. 3d 991, 998, 682 N.E.2d 1125 (1997). Historically, these provisions have been strictly scrutinized by the courts as they can result in restraints on trade. Williams & Montgomery, Ltd. v. Stellato, 195 Ill. App. 3d 544, 553, 552 N.E.2d 1100 (1990). "The rule is designed both to afford clients greater freedom in choosing counsel and to protect lawyers from onerous conditions that would unduly limit their mobility." Dowd & Dowd, Ltd. v. Gleason, 181 Ill. 2d 460, 481, 693 N.E.2d 358 (1998). Non-competition clauses are especially discouraged in the legal profession where the lawyer is not selling or promoting a commodity but rather his or her personal ...


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