Diederich Insurance Agency, LLC v. Smith, 952 N.E.2d 165

Plaintiff filed a two-count complaint against defendant for breaching a restrictive covenant and for repayment of commissions; count I dismissed as to insufficient consideration.
On March 14, 2008, defendant signed a confidentiality agreement reducing the nonsolicitation term from 2 years to 12 months.
Defendant stopped working for plaintiff on June 16, 2008; Logan Primary Care Service Corp. remained a client until May 15, 2009 when it switched to Gallagher, with defendant arranging the transfer.
Plaintiff alleged Logan ceased using plaintiff as its broker after defendant transferred Logan’s insurance services to Gallagher.
Circuit court held there was insufficient consideration to support the postemployment nonsolicitation and dismissed count I; plaintiff voluntarily dismissed count II.
On appeal, the court affirmed, holding that the postemployment covenant was unenforceable for lack of consideration.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether there was sufficient consideration for the postemployment nonsolicitation.	Diederich asserts the original 2-year covenant was supported by the job obtained and the job's reduction to 1 year was a benefit to Smith.	Smith argues the reduction altered a modification requiring new consideration, and that the preexisting-duty rule and illusory benefit negate consideration.	Insufficient consideration; covenant unenforceable.
Whether continued employment for three months after signing provided sufficient consideration.	Continued employment after signing constitutes valid consideration for the new covenant.	Three months is not enough; at-will status makes continued employment illusory consideration, and other cases require longer periods.	Three months’ continuation did not constitute sufficient consideration.

Woodfield Group, Inc. v. DeLisle, 295 Ill. App. 3d 935 (1998) (reasonableness and consideration prerequisites for postemployment restraints)
Corroon & Black of Illinois, Inc. v. Magner, 145 Ill. App. 3d 151 (1986) (continued employment as consideration; two-year benchmark)
Mid-Town Petroleum, Inc. v. Gowen, 243 Ill. App. 3d 63 (1993) (insufficient continued employment period to constitute consideration)
Brown & Brown, Inc. v. Mudron, 379 Ill. App. 3d 724 (2008) (minimum duration considerations for postemployment covenants)
Fuller Family Holdings, LLC v. Northern Trust Co., 371 Ill. App. 3d 605 (2007) (2–619 standard and factual pleading framework)
Curtis 1000, Inc. v. Suess, 24 F.3d 941 (1994) (at-will employment and illusory consideration analysis)