Cozen O’Connor: Unable to Enforce a Contractual Noncompete? [ABA Section of Litigation]

Unable to Enforce a Contractual Noncompete? [ABA Section of Litigation]

Courthouse wisdom is that judges generally dislike noncompetes. After all, everyone should be entitled to earn a living, right? As a result, judges often look for a reason to find that a noncompete is inapplicable, or should not be applied in the particular situation facing the court (for example, because it is overly broad). The former was the case in Gingrich v. Midkiff, 120332-U (Ill. App. 5th 2014), in which a court refused to enforce a noncompete between two doctors because the shareholders’ agreement provided that the noncompete was only triggered if one of the doctors either withdrew or was expelled from the practice. That isn’t what happened in Gingrich. On the contrary, after the doctors started suing each other, one doctor bought out the other under an Illinois “deadlock” statute. As a result, the “departing” doctor didn’t “withdraw” and wasn’t “expelled.” Instead, she was statutorily bought out.

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Aaron Krauss

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