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Fifield v. Premier Dealer Services, Inc.

Court of Appeals of Illinois, First District, First Division

June 24, 2013

ERIC D. FIFIELD and ENTERPRISE FINANCIAL GROUP, INC., Plaintiffs and Counter defendants-Appellees,
v.
PREMIER DEALER SERVICES, INC., Defendant and Counter plaintiff-Appellant.

Held[*]

The trial court’s order granting plaintiffs’ motion for declaratory relief stating that the nonsolicitation and noncompetition provisions of his employment contract with defendant were invalid and unenforceable due to the lack of consideration was upheld on appeal, since plaintiff resigned three months after he started work and Illinois courts have held that a minimum of two years of continued employment is necessary to establish adequate consideration for such a restrictive covenant.

Appeal from the Circuit Court of Cook County, No. 10-CH-9204; the Hon. Mary Anne Mason, Judge, presiding.

Schiff Hardin, LLP, of Chicago (Charles H.R. Peters, of counsel), and Hemmer DeFrank, PLLC, of Fort Mitchell, Kentucky (Scott R. Thomas, of counsel), for appellant.

Much Shelist, P.C., of Chicago (Anthony C. Valiulis and Matthew M. Kovalcik, of counsel), and Shields Legal Group, of Addison, Texas (James D. Shields, of counsel), for appellees.

Panel JUSTICE CUNNINGHAM delivered the judgment of the court, with opinion. Presiding Justice Hoffman and Justice Delort concurred in the judgment and opinion.

OPINION

CUNNINGHAM JUSTICE

¶ 1 This appeal arises from a December 20, 2010 order entered by the circuit court of Cook County which granted a motion for declaratory relief filed by plaintiffs and counterdefendants-appellees Eric D. Fifield (Fifield) and Enterprise Financial Group, Inc. (EFG) (collectively, Fifield and EFG); and a January 18, 2012 agreed order entered by the circuit court which dismissed with prejudice all claims not affected by the court's December 20, 2010 order. On appeal, defendant and counterplaintiff-appellant Premier Dealer Services, Inc. (Premier), argues that the trial court erred in granting Fifield and EFG's motion for declaratory relief because the nonsolicitation and noncompetition provisions in Fifield's employment agreement were enforceable under Illinois law. For the following reasons, we affirm the judgment of the circuit court of Cook County.

¶ 2 BACKGROUND

¶ 3 Prior to October 2009, Fifield was employed by Great American Insurance Company (Great American). As an employee of Great American, Fifield was assigned to work exclusively for Premier Dealership Services (PDS), a subsidiary of Great American. PDS was an insurance administrator that marketed finance and insurance products to the automotive industry. In October 2009, Great American sold PDS to Premier. Premier is an Illinois corporation engaged in the business of developing, marketing and administering a variety of vehicle after-market products and programs. As a result of the sale, Great American informed Fifield that his employment would end on October 31, 2009. However, in late October 2009, Premier made an offer of employment to Fifield. As a condition of his employment, Premier required Fifield to sign an "Employee Confidentiality and Inventions Agreement" (the agreement) which included nonsolicitation and noncompetition provisions. The agreement states in pertinent part:

"Employee agrees that for a period of two (2) years from the date Employee's employment terminates for any reason, Employee will not, directly or indirectly, within any of the 50 states of the United States, for the purposes of providing products or services in competition with the Company (i) solicit any customers, dealers, agents, reinsurers, PARCs, and/or producers to cease their relationship with the Company or (ii) interfere with or damage any relationship between the Company and customers, dealers, agents, reinsurers, PARCs, and/or producers or (iii) accept business of any former customers, dealers, agents, reinsurers, PARCs, and/or producers with whom the Company had a business relationship within the previous twelve (12) months prior to Employee's termination."

¶ 4 Before signing the agreement, Fifield negotiated with Premier and the parties agreed to add to the agreement a provision which stated that the nonsolicitation and noncompetition provisions would not apply if Fifield was terminated without cause during the first year of his employment (the first-year provision). Fifield accepted Premier's offer of employment and signed the agreement on October 30, 2009. Fifield began his employment at Premier on November 1, 2009. On February 1, 2010, Fifield informed Premier that he was resigning and that his employment would end in two weeks. On February 12, 2010, Fifield resigned from his position with Premier. Shortly thereafter, Fifield began working for EFG.

¶ 5 On March 5, 2010, Fifield and EFG filed a complaint in the circuit court of Cook County for declaratory relief pursuant to section 2-701 of the Illinois Code of Civil Procedure (Code) (735 ILCS 5/2-701 (West 2010)). The complaint for declaratory relief requested that the trial court declare that Fifield at no time had access to confidential and proprietary information while employed at Premier and that certain provisions of the agreement are invalid and unenforceable. On August 6, 2010, Premier filed an answer and affirmative defenses to Fifield and EFG's complaint, and a counterclaim for injunctive relief. Premier's counterclaim, in pertinent part, sought to enforce the nonsolicitation and noncompetition provisions in the agreement, and requested that the trial court enter a permanent injunction preventing Fifield from using Premier's proprietary information.

ΒΆ 6 On September 20, 2010, Premier filed a "Motion for Judgment" against Fifield and EFG. On September 22, 2010, Fifield and EFG filed a motion for declaratory relief pursuant to section 2-701(b) of the Code (735 ILCS 5/2-701(b) (West 2010)). On December 16, 2010, the trial court heard oral arguments on Fifield and EFG's motion for declaratory relief. On December 20, 2010, the trial court entered an order which granted Fifield and EFG's motion for declaratory relief. The trial court's order stated that "the non-solicitation and noninterference provisions found within [the agreement] are unenforceable as a matter of law for lack of adequate consideration." The parties continued to litigate claims that are not at issue in this appeal. On January 18, 2012, the trial court entered an agreed order which dismissed with prejudice all claims that were not affected by the trial court's December 20, 2010 order. The trial court's January 18, 2012 order stated that it was final and ...


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