RELIABLE FIRE EQUIPMENT COMPANY v. ARREDONDO

PER CURIAM.

Affirmed.

ALTENBERND, KHOUZAM, and CRENSHAW, JJ., Concur.

NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION AND, IF FILED, DETERMINED.

JUSTICE HUDSON, specially concurring:

I agree with much of the authoring justice's analysis of this appeal. I write separately because I believe that a few points bear further emphasis. To begin with, I share the dissent's concern regarding the viability of the legitimate-business-interest test. The Fourth District of this appellate court has flatly rejected this test (see Sunbelt Rentals, Inc. v. Ehlers, 394 Ill. App. 3d 421, 431 (2009)), and it would seem an appropriate time to assess whether this district should adhere to it.

The authoring justice traces the test to Capsonic Group v. Swick, 181 Ill. App. 3d 988 (1989). 405 Ill. App. 3d at 721. As such, it is a relative newcomer to the law. Indeed, as the Fourth District points out, the supreme court has never "embraced" this test. Sunbelt, 394 Ill. App. 3d at 431. It is worth noting that the supreme court has never expressly rejected it either. Something our supreme court has recognized is the need for an employer to have some legitimate, protectable interest in order to enforce a covenant not to compete. See Cockerill v. Wilson, 51 Ill. 2d 179, 184 (1972) ("Plaintiff was naturally interested in protecting his clients from being taken over by defendant as a result of these contacts. The protection of this asset is recognized as a legitimate interest of an employer"). Recently, in Mohanty v. St. John Heart Clinic, S.C., 225 Ill. 2d 52, 77, 79 (2006), in analyzing the enforceability of a covenant not to compete, our supreme court stated that the covenant "was not greater than necessary to protect [the employers'] interests" and that the geographical restriction contained in the covenant "was reasonable and necessary to protect the [employers'] interests." (Emphases added.) Thus, it is clear enough to me that an employer must have some protectable interest at stake before we will enforce a covenant that bars a former employee from pursuing his or her customary line of business. Consequently, I cannot accede to the holding in Sunbelt that "courts at any level, when presented with the issue of whether a restrictive covenant should be enforced, should evaluate only the time-and-territory restrictions contained therein." (Emphasis added.) Sunbelt, 394 Ill. App. 3d at 431.

As the authoring justice amply points out, such covenants have historically been disfavored. 405 Ill. App. 3d at 721-22. Courts have always been cautious regarding what sorts of interests the law will protect. It has thus been observed that a covenant not to compete should not be used to shield an employer from ordinary competition. Abbott-Interfast Corp. v. Harkabus, 250 Ill. App. 3d 13, 17 (1993) ("Courts uphold only those noncompetition agreements which protect the employer's legitimate proprietary interests and not those whose effect is to prevent competition per se"). It is this concern that the legitimate-business-interest test was intended to vindicate.

Near the conclusion of the section in which she discusses the viability of the legitimate-business-interest test, the authoring justice responds to the charge that the test is inflexible. She points out that there are no "fast rules" that control the analysis regarding the adequacy of the employer's interest. Indeed, as she points out, "the determination `necessarily turns on the facts and circumstances of each case. `"405 Ill. App. 3d at 736, quoting Office Mates 5, North Shore, Inc. v. Hazen, 234 Ill. App. 3d 557, 568-69 (1992). I agree wholeheartedly with these observations. However, in practice, the proposition articulated in Office Mates has been more the exception than the rule. Indeed, in arguing that the legitimate-business-interest test, as it exists, is flexible, the authoring justice can point only to Office Mates and the fact that some cases preface the legitimate-business-interest test with qualified language such as "generally." See 405 Ill. App. 3d at 736.

Contrast this meager support for the notion that the legitimate-business-interest test is flexible with the myriad of cases that set it firth as a sine qua non for the enforcement of a covenant not to compete. For example, in Lifetec, Inc. v. Edwards, 377 Ill. App. 3d 260, 269 (2007), a majority of a panel of the Fourth District held: "A `legitimate business interest' is found only where (1) the employee acquired confidential information through his employment with the plaintiff and later attempted to use it for his own gains or (2) by the nature of the plaintiffs business, its customer relationships are near permanent and the employee would not have had contact with the customer absent his employment." (Emphases added and omitted.) Lifetec, Inc. cited A.J. Dralle, Inc. v. Air Technologies, Inc., 255 Ill. App. 3d 982, 991 (1994), where this court stated, "Our courts will enforce a restrictive covenant under two types of circumstances: (1) where the former employee acquired confidential information through employment and subsequently attempted to use it for his own gains, or (2) where, by [the] nature of the business, the customer relationship is near permanent and, but for his association with [the] plaintiff, [the] defendant would not have had contact with the customers in question." Similarly, the First District has held that "[t]here are two ways a party can establish that it has a protectable business interest: (1) it can show the employee acquired the party's confidential information and attempted to use that information for his own benefit; or (2) it can show it has a near-permanent relationship with its customers, and but for his employment with the party, the employee would not have had access to those customers." Appelbaum v. Appelbaum, 355 Ill. App. 3d 926, 934 (2005). In The Agency, Inc. v. Grove, 362 Ill. App. 3d 206, 214 (2005), we flatly held, "A legitimate business interest exists where: (1) because of the nature of the business, the customers' relationships with the employer are near-permanent and the employee would not have had contact with the customers absent the employee's employment; or (2) the employee gained confidential information through his employment that he attempted to use for his own benefit." Far more often than not, the legitimate-business-interest test has been presented as representing the only two circumstances under which an employer can enforce a covenant not to compete.

The authoring justice states that the prongs of the legitimate-business-interest test should not be taken as "categorical pronouncements." 405 Ill. App. 3d at 736. In so doing, she appears to be departing from a large body of cases applying the test in an inflexible manner, sub silentio, in favor of a proposition that has been articulated only infrequently, namely, that the enforceability of such covenants should be judged with reference to the totality of the circumstances (see Office Mates, 234 Ill. App. 3d at 569). In any event, I agree with the result at which the authoring justice arrives and I agree that the test that should be used to assess restrictive covenants is more flexible than the legitimate-business-interest test as typically presented. Rather than engaging in a post hoc revision of the test, however, I would plainly hold that the existence of a legitimate business interest should be determined with regard to the totality of the facts and circumstances of a given case (see Office Mates, 234 Ill. App. 3d at 569). Analyzing such covenants with reference to the totality of the circumstances to determine if an employer has a protectable interest, as opposed to utilizing the typical rigid version of the legitimate-business-interest test, will lead to results more grounded in the true considerations of a given case.

The dissent is concerned that our three opinions result in a confusing statement of the law and worries that the lead opinion might be taken as a correct statement of the law. It would appear, however, that a careful reading of the three opinions in this case makes clear that this district is no longer committed to a strict application of the two restrictive prongs of the legitimate-business-interest test.

By advocating a totality-of-the-circumstances approach over the extant legitimate-business-interest test, I do not mean to say that the sorts of interests identified by that test do not warrant protection. Indeed, the nature of the relationship between an employer and its customers (be it near permanent, completely transient, or something in between) and the danger of misuse of confidential information are potential parts of the totality of the circumstances that must be considered. I would further emphasize that, contrary to the Fourth District's apparent position in Office Mates, 234 Ill. App. 3d at 571, the parties cannot define the legitimate interests of the employer in the covenant itself. Quite simply, there are public policy considerations beyond freedom of contract that are relevant as well — perhaps most notably, free trade.

Having set forth my disagreement with certain aspects of the legitimate-business-interest test and my belief that the totality of the circumstances should control, I do agree with the authoring justice's assessment of the facts of this case. Her discussion of the facts reveals neither a sufficiently substantial relationship between plaintiff and its customers nor the danger of the misuse of any confidential information that would warrant the enforcement of a restrictive covenant. Furthermore, I perceive no other factor, beyond the two traditionally discussed in the context of the legitimate-business-interest test, that indicates that plaintiff has some special interest that is in need of protection. Accordingly, the effect of enforcing the covenants would have been only to shield plaintiff from ordinary competition. Having concluded that plaintiff possesses no protectable interest in this case, there is no need to address whether the restrictions contained in the covenant are reasonable in scope.

Though the dissent and I agree that the existence of a protectable interest should be assessed in light of the totality of the circumstances, I do not intend a dilution of the dignity of the sorts of interests the law will protect through the enforcement of a restrictive covenant. To this end, I believe that cases applying the legitimate-business-interest test provide considerable guidance in exemplifying the types of interests the law will protect as matters of fact. I believe there may be other interests that are comparable to the two identified in the legitimate-business-interest test, and my disagreement with the test is that it excludes consideration of such interests as a matter of law.

Plaintiff has requested that we remand this case so that the trial court can apply the proper test to analyze the validity of the restrictive covenant. However, "the question of whether a covenant is enforceable under the facts is a legal question subject to de novo review." The Agency, Inc., 362 Ill. App. 3d at 215. Plaintiff has not explained why we cannot conduct this analysis in the first instance or identified any other compelling reason for us to remand. If such reasons exist, plaintiff remains free to call them to our attention in a petition for rehearing.

Before concluding, however, I wish to address one additional point. I believe that the following statement is not necessarily true: "Those engaged in professional services, by the nature of those services, can justifiably anticipate a permanent or near-permanent relationship with their clientele." 405 Ill. App. 3d at 735. The authoring justice cites Nationwide Advertising Service, Inc. v. Kolar, 14 Ill. App. 3d 522, 528 (1973), a case that is over 35 years old. While this proposition may have been true at that time, it seems an overstatement at the present time, when many individuals, for example, find their optometrist in a shopping mall. In short, I do not believe that professional services indicate substantial relationships as matters of law. Rather, such determinations should be made as matters of fact. Cf. Mohanty, 225 Ill. 2d at 76-77 (examining the nature of the professional service involved rather than simply accepting it as establishing a sufficient interest).

JUSTICE O'MALLEY, dissenting:

I respectfully dissent from the result in this case, but I agree with the special concurrence's explication of the law. With that agreement, I am actually in the majority regarding the legal issues and analysis raised by this case, even though my opinion, if the reader has not yet given up, comes last. I am dissatisfied with the confusing formal structure of this disposition, so to help the reader's understanding, I first count noses. The lead opinion and the special concurrence agree as to the outcome: affirmance of the trial court and the holding that the restrictive covenants in this case are unenforceable. They constitute the majority only as to the outcome, however. The lead opinion maintains its adherence to the legitimate-business-interest test (LBI test) (see 405 Ill. App. 3d at 736 ("we apply it [the LBI test] here")), in spite of the significant criticism from the special concurrence, myself, and the recent precedent of Steam Sales Corp. v. Summers, 405 Ill. App. 3d 442 (2010). The special concurrence and I agree that the LBI test must be abandoned in favor of what we term to be a totality-of-the-circumstances approach, in which the existence or lack of a protectable interest is first ascertained, followed by consideration of the time, territory, and activity restrictions of the restrictive covenant. The special concurrence and dissent, therefore, form the majority on the significant legal issue decided in this case.

There is, of course, no doubt that the lead opinion and the special concurrence form the majority because both vote to affirm the judgment of the trial court. That does not mean, however, that the lead opinion constitutes the majority opinion. See, e.g., 405 Ill. App. 3d at 748 ("I share the dissent's concern regarding the viability of the legitimate-business-interest test"); 405 Ill. App. 3d at 751 ("a careful reading of the three opinions in this case makes clear that this district is no longer committed to a strict application of the two restrictive prongs of the legitimate-business-interest test"). As I have noted, the special concurrence (which votes to affirm) and the dissent (which votes to reverse) agree on the legal analysis of the issues. In other words, the special concurrence presents the only opinion in this case in which a majority of the court agree on both the legal analysis and the outcome. The lead opinion's pretension to the majority, then, is unfounded, because the special concurrence truly represents the majority opinion of this panel and this court.

In addition, the lead opinion concludes that "[t]he dissenting justice is, without question, in the minority." 405 Ill. App. 3d at 737. This is tautological, as my separate opinion in this matter is styled as the dissent, which would necessarily place it in the minority. This statement also illustrates the lead opinion's primary shortcoming, namely, that it makes assertions and conclusions without regard to any underlying circumstances. As I will demonstrate, the special concurrence and the dissent both agree on the manner in which the law should be analyzed and what the law should be. In my understanding, where two judges on a three-judge panel agree, that constitutes the majority. The lead opinion disagrees with the manner in which the special concurrence and dissent analyze the law and their conception of what the law should be. On that issue (and I emphasize that it is the issue, not the entirety of the disposition), the lead opinion is in the minority.

Having first tried to explain how to assess the actual holdings of our three opinions in this case, I turn to the substantive issues raised. As our three opinions indicate, the chief debate in this case is over the retention or repudiation of the LBI test. As the special concurrence correctly notes, the Fourth District recently challenged the legitimacy of the LBI test in Sunbelt Rentals, Inc. v. Ehlers, 394 Ill. App. 3d 421 (2009). Both the lead opinion and special concurrence trace the development of the LBI test. The LBI test looks to two prongs only: (1) whether the employee acquired confidential information through his employment and subsequently attempted to use it for his own ends, or (2) whether, by the nature of the business, the relationship between employer and customer is near-permanent, and, but for his association with the employer, the employee would never have come into contact with the clients in question. Nationwide Advertising Service, Inc. v. Kolar, 28 Ill. App. 3d 671, 673 (1975). As the special concurrence points out, Sunbelt rejected the LBI test because the supreme court never embraced or otherwise adopted it. 405 Ill. App. 3d at 748-49. The special concurrence also correctly notes that the supreme court did not reject the LBI test either.

By analyzing various cases ( e.g., Cockerill v. Wilson, 51 Ill. 2d 179 (1972); Mohanty v. St. John Heart Clinic, S.C., 225 Ill. 2d 52, 77 (2006)), the special concurrence correctly notes that our supreme court has required an employer to demonstrate the existence of a protectable interest before it will enforce the employer's restrictive covenant. Indeed, Mohanty states the test to consider the propriety of a restrictive covenant as follows: "`"In determining whether a restraint is reasonable it is necessary to consider whether enforcement will be injurious to the public or cause undue hardship to the promisor, and whether the restraint imposed is greater than is necessary to protect the promisee."`" Mohanty, 225 Ill. 2d at 76, quoting House of Vision, Inc. v. Hiyane, 37 Ill. 2d 32, 37 (1967), quoting Bauer v. Sawyer, 8 Ill. 2d 351, 353 (1956). While the concept of a protectable interest is not expressly present in Mohanty, it is nevertheless, as noted by the special concurrence, present. I further agree completely with the special concurrence's repudiation of Sunbelt's holding that "`courts at any level, when presented with the issue of whether a restrictive covenant should be enforced, should evaluate only the time-and-territory restrictions contained therein. `"(Emphasis in original.) 405 Ill. App. 3d at 749, quoting Sunbelt, 394 Ill. App. 3d at 431.

While neither I nor the special concurrence will go as far as Sunbelt in repudiating the LBI test, we both maintain that, nevertheless, the LBI test is narrow, inflexible, and an artificial impediment to considering restrictive covenant cases on their full facts. In any formulation, the LBI test refers to confidential information or near-permanent customer relationships; most cases assert that the LBI test can be satisfied only by showing that the employee used confidential information or the employer had a near-permanent relationship with its customers. See, e.g., Lifetec, Inc. v. Edwards, 377 Ill. App. 3d 260, 269 (2007) (a protectable interest is found "only" where the employee acquired the employer's confidential information or where the employer's customer relationships are nearly permanent); Appelbaum v. Appelbaum, 355 Ill. App. 3d 926, 934 (2005) (there are two ways to establish a protectable interest). Even the cases that do not expressly limit themselves to "only two ways" to demonstrate a protectable interest analyze only whether there is confidential information or near-permanency of customer relationships. E.g., Lawrence Allen, Inc. v. Cambridge Human Resource Group, Inc., 292 Ill. App. 3d 131 (1997); Capsonic Group v. Swick, 181 Ill. App. 3d 988 (1989).

In spite of this rigidity and inflexibility, the lead opinion purports to discern that the LBI test is somehow flexible, in spite of the fact that, for literally all the cases that have invoked the LBI test, those cases have analyzed only the confidential information prong or the near-permanency of customer relationships prong, and no other. The lead opinion accomplishes this linguistic legerdemain by seizing on a very few cases that articulate the LBI test with "general" or "generally." Lawrence Allen, 292 Ill. App. 3d at 141 ("Generally, there are two situations in which a legitimate business interest will exist ***"); Capsonic, 181 Ill. App. 3d at 993 ("There are two general situations in which a legitimate business interest will exist ***"). The lead opinion combines a curious mix of sophistry with a fervent wish to believe in an attempt to beguile the unreflectingly credulous into agreement.

The special concurrence, fortunately, does not fall prey to this beguilement. It notes that a "myriad of cases" set forth the two prongs of the LBI test as the " sine qua non for the enforcement of a covenant not to compete." 405 Ill. App. 3d at 750.1 completely agree. The special concurrence also notes the lengths to which the lead opinion will go to preserve the formalism of the LBI test, even while its literal words actually gut it to create something truly unprecedented and completely at odds with the precedent on which it purports to rely. Specifically, the special concurrence states that the lead opinion:

"states that the prongs of the legitimate-business-interest test should not be taken as `categorical pronouncements.' [Citation.] In so doing, [it] appears to be departing from a large body of cases applying the test in an inflexible manner, sub silentio, in favor of a proposition that has been articulated only infrequently, namely, that the enforceability of such covenants should be judged with reference to the totality of the circumstances." 405 Ill. App. 3d at 751.

In other words, the special concurrence is calling out the lead opinion's attempt to overthrow precedent through twisting those cases that employ "generally" while trying to maintain the appearance of staid conformity with now-abandoned precedent. The lead opinion's silence in response to this point speaks volumes about the legitimacy of its contention.

The special concurrence abjures such post hoc revisionism ( 405 Ill. App. 3d at 751), in favor of a plain statement that "the existence of a legitimate business interest should be determined with regard to the totality of the facts and circumstances of a given case" ( 405 Ill. App. 3d at 751). Again, I completely agree. The LBI test should be discarded. The special concurrence advocates the analysis of a restrictive covenant "with reference to the totality of the circumstances to determine if an employer has a protectable interest." 405 Ill. App. 3d at 751. I completely agree. Obviously, confidentiality or near-permanent customer relationships would be considered under the totality of the circumstances and would go a long way toward demonstrating the existence of a protectable interest. But, as the special concurrence notes, they are no longer the only two ways to demonstrate a protectable interest.

In spite of stating a new analytical paradigm for restrictive covenants, the special concurrence finds the restrictive covenants at issue in this case to be unenforceable. At this point, I disagree. The lead opinion and special concurrence deem defendants' conduct to be ordinary competition. While this is in accord with the trial court's factual findings, I believe that the trial court's factual findings cannot be accepted (in spite of the against-the-manifest-weight-of-the-evidence standard of review), because the trial court analyzed the evidence that was presented only in light of the LBI test, and not considering the totality of the circumstances, which a majority of this panel now requires. This fact alone makes a strong argument for remanding this matter to allow the trial court to consider the validity of the restrictive covenants under the correct legal standard (and also to allow the parties to present any additional evidence (outside of the LBI-test prongs of confidential information and nearly permanent customer relationships) that may now be relevant to the enforceability of the restrictive covenants). After all, the use of the wrong legal standard constitutes error under any standard of review. E.g., Rockford Police Benevolent Protective Ass'n v. Morrissey, 398 Ill. App. 3d 145, 154 (2010) (an abuse of discretion will be found where the court applied the wrong legal standard). Of course, the trial court was blameless in applying the LBI test in this case because that was then the law. Although it is not clear — given the odd notion of having the lead opinion present itself as the "majority" even though, as to the issue of determining a protectable interest, it is actually in the minority — a majority of this panel has now decreed that the LBI test is no longer valid. See 405 Ill. App. 3d at 751 ("this district is no longer committed to a strict application of the two restrictive prongs of the legitimate-business-interest test").

The lead opinion ( 405 Ill. App. 3d at 736) and the special concurrence ( 405 Ill. App. 3d at 752) both believe that the circumstances of this case present only ordinary competition, something against which a restrictive covenant may not shield an employer. While I agree that a restrictive covenant may not restrict "ordinary competition," I disagree that this case presents ordinary competition between the employer and the former employees. What is ordinary competition? I do not have a universal definition. However, something squarely within the definition of ordinary competition would be, as an example, the three judges on this panel deciding to doff our robes and enter the fire alarm and suppression business. Even if we were to open a business next door to plaintiff, our competition with plaintiff would fall into the category of ordinary competition. By contrast, individuals who worked for an employer for a significant length of time, who learned the employer's business as a result of their employment, and who decided to leave the employer in order to open their own competing business, delivering exactly the same goods and services as the employer and targeting exactly the same customers as the employer, are not engaged in "ordinary" competition. The example of not-ordinary competition is far closer to the circumstances of this case than is the example of ordinary competition.

In this case, the evidence showed that Arredondo and Garcia not only left to open their own shop, but, while employed with plaintiff, were working on soliciting business for their soon-to-start business. For example, by September 15, 2004, Arredondo and Garcia had left plaintiffs employment. By the following week, September 22, 2004, the new company, High Rise, had generated substantial business. Plaintiff sought to create the inference that Arredondo and Garcia had been diverting business from plaintiff to their new business while still employed by plaintiff. In support of that inference, plaintiff presented testimony that it takes six to eight weeks to go from giving the price to the customer to the customer accepting the quote and then beginning the installation. In addition, it would take a "couple" weeks of research and "legwork" before the quote would be ready to submit to the customer. Plaintiff presented testimony that it was interested in a job located at 330 N. Wabash Avenue in Chicago. Arredondo was preparing the paperwork to submit a quote on the Wabash project. When Arredondo completed his employment, he turned the paperwork on the Wabash project over to Pikula, but there was insufficient time remaining before the deadline for plaintiff to be able to submit a quote on the Wabash project. High Rise was awarded the contract for the Wabash project. The trial court rejected the inference that plaintiff was attempting to demonstrate. Nevertheless, and despite the fact that the trial court was concerned only with whether defendants had used confidential information or whether plaintiff maintained a nearly permanent relationship with its customers, this evidence is unquestionably pertinent to whether defendants were engaged in ordinary competition with plaintiff, something the trial court was not considering because it was analyzing the evidence under the LBI test.

In arriving at its decision, the trial court did not look beyond the prongs of the LBI test to determine whether defendants were engaged in ordinary competition with plaintiff. In other words, the trial court did not consider the evidence using the lens of the correct legal analysis, the totality of the circumstances, as promulgated by the special concurrence and supported by this dissent. Had it done so, my view is that it unquestionably would have determined that plaintiffs evidence supported a finding that defendants engaged in stiffer-than-ordinary competition and could not be considered to be engaging in "ordinary" competition with plaintiff. This beyond-the-ordinary level of competition should trigger the protection of the restrictive covenants to which Arredondo and Garcia agreed.

On the other hand, the evidence about the beyond-the-ordinary level of competition was not really relevant to any aspect of the LBI test. The trial court was correct to disregard or downplay the significance of the evidence because it was looking to determine only whether defendants used confidential information or whether plaintiffs customers were nearly permanent, because those were the only bases the court could consider under the LBI test. Had it been aware that it could expand its consideration, in my view it would have accepted the inference plaintiff sought to draw and found that defendants were not engaged in only ordinary competition with plaintiff. This is why I believe the better course would be to remand this matter (as plaintiff alternatively requested in the supplemental briefing we ordered to address the Fourth District's rejection of the LBI test in Sunbelt) to allow the trial court to take any necessary additional evidence and to reconsider the evidence already presented in light of the correct legal standard. Barring that, I agree with the special concurrence that the parties are free to make further arguments in support of remanding this matter to the trial court in a petition for rehearing to us.

The lead opinion contends that the dissent is trying to engraft the principles of the tort breach of fiduciary duty onto the consideration of the validity of a restrictive covenant. This is plainly mistaken. My focus is on the level of competition. The lead opinion's hyperbolic contentions should be ignored and should not be allowed to cloud the issue of the degree of competition. Indeed, the degree of competition posed by defendants is precisely the sort of thing that exists outside of the LBI test, but is something that I, the special concurrence, and the three judges on Steam Sales all agree should be considered by the court under the totality of the circumstances when it is reviewing the validity of a restrictive covenant.

I also note that the lead opinion cites to The Agency, Inc. v. Grove, 362 Ill. App. 3d 206, 215 (2005), and criticizes the fact that I do not acknowledge the manifest-weight-of-the-evidence standard of review regarding the trial court's consideration of the existence of a protectable interest. As I have noted above, the trial court used the wrong legal standard by which to judge whether there was a protectable interest. The trial court used the LBI test, but the special concurrence and I believe that the trial court should have examined all of the circumstances of the case in determining whether a protectable interest existed. As a result, its factual findings, such as the presence or lack of a protectable interest, are flawed because, under the LBI test, the relevant evidence is narrow indeed. Because I am looking at the record through the lens of a different legal standard (totality of the circumstances as opposed to the LBI test), I am considering evidence that was not relevant to the LBI test and was not passed upon by the trial court for the purpose of establishing the existence or lack of a protectable interest. Hence, my repeated calls to remand this matter. Further, to explain my position and to properly analyze this case using the correct legal standard, I am required to review pertinent evidence in the record that the trial court, under the previous and now superseded standard, could not consider. Contrary to the lead opinion's assertion, I am not erring by abandoning the proper standard of review for factual matters; rather I am trying to implement the correct standard here, one that takes into account all of the evidence of record.

Having determined that plaintiff has a protectable interest in not being subjected to the extraordinary competition of its former employees selling the same goods and services to the same customers, I turn to the time, territory, and activity restrictions in the restrictive covenant, which the lead opinion never analyzes because it holds there was no protectable interest in the first place. The restrictive covenant at issue here contains both a noncompetition clause as well as several nonsolicitation clauses. 405 Ill. App. 3d at 720. The time, territory, and activity terms are defined similarly in the noncompetition and nonsolicitation clauses.

Beginning with the noncompetition clause, it prohibits competitive activities in the entirety of Wisconsin, Illinois, and Indiana. Evidence was adduced that plaintiff did about 95% of its business in the greater Chicago area. The territorial scope appears to be broader than the bulk of plaintiffs actual business interests, and it should weigh against the validity of the restrictive covenant.

Plaintiff urges, however, that the territorial scope supports the validity of the restrictive covenant. Plaintiff argued, in oral argument, that the restrictive covenant's geographical scope is tempered because the focus of the limitation is on its recent customers. In other words, plaintiff contended that defendants could set up shop anywhere, even next door, so long as they did not do business with plaintiffs recent customers. This argument is somewhat appealing, and yet it seems to violate principles of contract interpretation, because it seems to render the territorial term of the covenant superfluous. A closer look belies the concern.

Plaintiff drafted the restrictive covenant to prohibit defendants from "[e]ngag[ing] in any sales, sales support, or sales supervisory capacity in any business in the states of Illinois, Indiana or Wisconsin which sells [anything plaintiff is selling or has sold during Arredondo and Garcia's tenure] to or for any person or entity who or which was a customer [of plaintiff]." A customer of plaintiff is determined as of the termination date plus 12 months before the termination date. A reading of the covenant confirms plaintiffs contention: defendants are prohibited from competing in the three states by selling anything plaintiff sells to or for a recent customer of plaintiff. If defendants are selling to a noncustomer of plaintiff, even something that plaintiff sells or sold, then there is no conflict with the covenant, and this activity may occur anywhere in any and all of the three states. By including terms that prohibit defendants from performing similar functions for companies doing business with current or recent customers, plaintiff narrows the geographical range of the covenant so that it is exactly coextensive with plaintiffs recent customer base at the time of the termination. In fact, the geographic limitation itself is limited by applying only to recent customers, thus excluding from the limitation everyone else in the geographic area. There was no evidence that plaintiff had even a significant let alone a huge market share, so the limitation on the geographic limitation leaves abundant potential customers for defendants. Thus, in the words of Mohanty, the geographic limitation here is, in fact, "narrowly circumscribed." See Mohanty, 225 Ill. 2d at 76-77 (appellate court found that the plaintiffs were free to practice medicine outside of the geographic limitation "`which, given the heavily populated Chicago metropolitan area, would not deprive them of employment`"; supreme court held that geographic limitation was not greater than necessary to protect the defendants' interests because "the restriction on [the] plaintiffs is in effect only within a narrowly circumscribed area of a large metropolitan area"). Since the covenant's territorial limitation in this case is also narrowly circumscribed, albeit in a different fashion, it is therefore reasonable and enforceable.

For example, consider an employer whose customers are all in Portland, Maine, but whose noncompetition covenant also restricts a former employee from selling to the employer's customers in Portland, Oregon. The reasonableness test is applied as follows: (1) the restriction on sales to customers in Portland, Oregon, does not harm the employee at all, much less unduly harm him, because there are no employer's customers in Portland, Oregon, so the employee can make sales to anyone in Portland, Oregon; (2) for the same reason there is no harm to the public; and (3) the restriction does go beyond what is needed to protect the employer's legitimate interests, but is actually harmless. The result is that that particular geographical limitation would not render the noncompetition covenant unenforceable.

I note that the time restriction of the noncompetition clause is one year. There is no serious argument that the time limitation is not reasonable. See Mohanty, 225 Ill. 2d at 78 (upholding a three-or five-year limitation); Sunbelt, 394 Ill. App. 3d at 432 (one-year limitation found to be reasonable). I would find that the time restriction in the noncompetition clause here is reasonable and enforceable.

I next consider the scope of the activities prohibited by the restrictive covenant. The covenant provides that defendants are prohibited from "[e]ngag[ing] in any sales, sales support or sales supervisory capacity in any business [which sells the same things that plaintiff sells or sold during Arredondo and Garcia's tenure] to or for any entity who or which was a customer [of plaintiff at the termination date or within 12 months before the termination date] or obtain or acquire any interest (whether as debt or equity), or provide services (whether as an employee, consultant or otherwise), in or to any such business." The covenant prohibits defendants from plying their trade with any business like plaintiffs (including a business created by defendants) that sold products to or for any person or business who or which was one of plaintiffs recent customers. Again, the current-or-recent-customer-centric language limits the scope of the prohibition. The covenant also includes language prohibiting defendants from acquiring any interest in a business like plaintiffs that sold products to or for a recent customer, and language prohibiting defendants from providing services (the type of which is unspecified) in any capacity to a business like plaintiff that sold products to or for a recent customer of plaintiff.

Restrictions on activities in a covenant not to compete should be narrowly tailored to protect the employer only against activities that threaten its legitimate interests. Cambridge Engineering, Inc. v. Mercury Partners 90 BI, Inc., 378 Ill. App. 3d 437, 452 (2007). Here, the covenant bars defendants from engaging in any sales-related activity with plaintiffs recent customers. This appears to be reasonable, as Arredondo and Garcia were salesmen for plaintiff. See Cambridge Engineering, 378 Ill. App. 3d at 452. However, the covenant also prohibits defendants from providing "services" to any business that dealt with a recent customer of plaintiff. The term "services" is unspecified and is broad enough to encompass any conceivable position, such as a position unrelated to sales or even a janitorial position. (Proper interpretation suggests that it is any position other than the sales-related activities expressly prohibited in the noncompetition clause.) Because the prohibition is so broad, it cannot be deemed to be narrowly tailored to protect plaintiff's legitimate interests. The overbreadth of the restrictive covenant is beyond the standard for acceptable activity restrictions. Cambridge Engineering, 378 Ill. App. 3d at 452; Lawrence Allen, 292 Ill. App. 3d at 140. Accordingly, I would find the noncompetition covenant to be unenforceable only if the services language is allowed to stand.

Plaintiff requested the trial court to "blue pencil" the covenant so as to make it enforceable. I would accept plaintiffs invitation and strike the services language. With that modification, then, I believe that the noncompetition clause is fully enforceable. It would be narrowly tailored because it would prohibit defendants from directly competing with plaintiff for the business of customers who purchased from plaintiff within 12 months of Arredondo and Garcia's termination date. Moreover, the services language is not really at issue here, because Arredondo and Garcia competed as salesmen.

The reasonableness is especially clearly seen when Mohanty is considered. Mohanty prohibited the plaintiff employees, who specialized in cardiology, from practicing any medicine in the geographic area specified. Mohanty justified this because the physicians were licensed to practice medicine, not just their specialties, and they were free to practice medicine outside of the territorial limitation of three or five miles, which, given the heavy population in the Chicago metropolitan area, would not deprive the employees of the ability to find employment. Mohanty, 225 Ill. 2d at 76. Likewise here. By striking the services language, the activities prohibited are related to Arredondo and Garcia's former positions — sales. Additionally, the territorial restriction is expressly coextensive with plaintiffs sales area, because defendants are prohibited from competing for the business of any of plaintiffs customers who purchased anything from plaintiff in the 12 months preceding Arredondo and Garcia's termination date. Defendants remain free to sell the identical products and services to entities that have not been recent customers of plaintiff, and defendants could open up their business literally next door to plaintiff. Furthermore, in Mohanty, the employees were prohibited, not only from treating their own patients and any other patients of the employers, but also from treating any person, even a person who had no prior relationship with the employers. The restriction in Mohanty, which was deemed enforceable, was a much broader restriction than we have in this case. Thus, I conclude that the activity restriction is reasonable if the services term is stricken.

I next consider the nonsolicitation clauses in the restrictive covenant. The first nonsolicitation clause bars defendants from soliciting or assisting others to solicit "sales from any person or entity who or which was a customer [of plaintiff]." "Customer" is defined in the same fashion as it was defined in the noncompetition clause considered above. Much like a noncompetition clause, a nonsolicitation clause is deemed valid only if it is reasonably related to the employer's interest in protecting customer relations that the employee developed while working for the employer. Cambridge Engineering, 378 Ill. App. 3d at 455. The general rule was that a court will not enforce a nonsolicitation clause that prohibits a former employee from working with customers that he or she never had contact with while working for the original employer. Cambridge Engineering, 378 Ill. App. 3d at 455; Lawrence Allen, 292 Ill. App. 3d at 138. However, I doubt the viability of such a rule in light of Mohanty. In any event, the general rule does not seem applicable here. Even though plaintiff defines "customer," not in terms of who Arredondo and Garcia may have worked with during their employment, but as any customer of plaintiff on the date of termination or within the 12 months before the date of termination, the validity of the noncompetition clause as modified seems to render the nonsolicitation clause redundant. Further, it makes no sense to bar defendants from making actual sales to plaintiffs recent customers yet to allow them to solicit those very same customers. The result comes about, I think, because the nonsolicitation clause and the noncompetition clause define the activities restricted in terms of plaintiffs recent customers. In my view, then, applying the general rule would lead to a patently absurd result; however, we will not construe such a provision to reach an absurd result. See Farmers Automobile Insurance Ass'n v. Rowland, 379 Ill. App. 3d 696, 698 (2008) (a contract will not be construed to permit an absurd result). Accordingly, I would hold that the first nonsolicitation clause is enforceable.

Likewise, the second nonsolicitation clause prohibits defendants from "[s]olicit[ing] (or assist[ing] others in soliciting), referrals from any person or entity who or which referred business to [plaintiff within 12 months of Arredondo and Garcia's termination]." Once again, the limitation of the clause to a person or entity who or which successfully referred business to plaintiff in the 12 months preceding Arredondo and Garcia's termination renders it enforceable for the same reasons as the previous nonsolicitation clause.

Finally, the third nonsolicitation clause prohibits defendants from poaching plaintiffs employees. This clause appears to be sound. Plaintiff has a protectable interest in its employees, and I see nothing in the nonpoaching clause that is overbroad or otherwise unreasonable, keeping in mind that the duration of the covenant as a whole is limited to one year. Had there not been a time limitation, then the nonpoaching clause would be problematic, as I do not believe that plaintiffs interest in preventing former employees from poaching current employees should last forever. See Lawrence Allen, 292 Ill. App. 3d at 139-40 (discussing valid time limits in nonsolicitation clauses). Thus, I believe that plaintiff has demonstrated a protectable interest and that the time, territory, and activity restrictions (as modified) are reasonable. Consequently I would enforce the restrictive covenant, and I therefore dissent from the result reached by the lead opinion and the special concurrence.

The lead opinion contends that the dissent attempts to undermine the necessity of demonstrating a protectable interest. 405 Ill. App. 3d at 740-42. Unlike the lead opinion, the special concurrence and the dissent are abandoning the narrow and restrictive prongs of the LBI test. Instead of near-permanency and confidentiality, the facts of this case lend themselves to a consideration of whether the competition posed by defendants can be deemed to be ordinary, leaving plaintiff undeserving of protection, or whether the competition is fiercer than ordinary, or unfair in some manner, thereby deserving enforcement of the restrictive covenant. Thus, the dissent does not go further than Sunbelt ( 405 Ill. App. 3d at 741) or the special concurrence, because it keys the protectable interest to the manner or level of competition.

Before concluding, however, I am compelled by the disjointed and confusing nature of the three opinions in this case to expand upon my explanation of where the majorities lie in our three opinions. In my view, courts of review should avoid, when possible, issuing confusing statements of what the law is. The name for this policy when applied to courts of equal authority is "horizontal stare decisis." O'Casek v. Children's Home Aid Society of Illinois, 229 Ill. 2d 421, 453 n. 4 (2008) (Karmeier, J., dissenting, joined by Thomas, C.J., and Garman, J.). I say, "when possible," because it is not always possible. But on those occasions when we depart from precedent, it is imperative that we do so clearly by expressly recognizing that we are doing so and explaining why. This is part and parcel of why we explain our decisions rather than just giving thumbs up or thumbs down when we decide appeals. Our job is not to rule just on the case before us, but to provide guidance as to what the law is for the benefit of the courts as well as the body politic in the conduct of its affairs. Clarity rather than confusion is our goal. We have fallen far short of that goal today.

What is the law in Illinois today regarding the LBI test according to the unified Appellate Court of Illinois? Until today, it was contained in Sunbelt, 394 Ill. App. 3d at 431, which declined, expressly, to adhere to the principle of horizontal stare decisis and concluded that the LBI test was flawed and should not be used. The unanimous decision in Sunbelt went to great lengths to justify its departure from precedent, pointing out, among other things, that the LBI test had never been embraced by our supreme court. Right or wrong, Sunbelt was clear. Our decision today lacks the virtue of clarity; it will serve only to confuse bench and bar and the employers and employees of Illinois. First, the lead opinion expresses the majority in result alone. The special concurrence quite effectively repudiates the lead opinion's view of the LBI test. It is clear that the special concurrence, and the authority that it cites, does not agree with the lead opinion that the LBI test is somehow flexible and not outcome-determinative. I completely agree with the special concurrence that the LBI test is no longer viable and should be abandoned. The lead opinion, simply by coming first, obscures that holding of our court today. I note, too, that a completely separate panel of this court recently issued Steam Sales, 405 Ill. App. 3d at 457-58, which expressly disagreed with the lead opinion's view that the LBI test is somehow flexible:

"[T]he legitimate-business-interest test is outcome-determinative in cases where the employer is unable to establish either a near-permanent relationship or the attainment of confidential information. Unless one of these two criteria is satisfied, the employer cannot establish a legitimate business interest, since the test contemplates no other means of showing a protectable interest. The legitimate-business-interest test therefore presents a greater hurdle for employers to overcome than the reasonableness test [set forth in Mohanty]. In other words, a restraint that is reasonable in terms of time and territory will still not be enforceable if the employer is unable to establish a legitimate business interest ( i.e., a near-permanent relationship or confidentiality). Doing away with the legitimate-business-interest test would not relieve an employer of demonstrating a protectable interest; it would simply allow for a more contextual approach dependent on the particular facts and circumstances of the case. Therefore, to the extent that Sunbelt can be interpreted to require analysis of only the time and territory aspect of a restraint (see Sunbelt, 394 Ill. App. 3d at 431 (`courts at any level, when presented with the issue of whether a restrictive covenant should be enforced, should evaluate only the time-and-territory restrictions contained therein')), we note that the reasonableness of time and territory should still be evaluated in relation to a protectable interest. But because of the `gatekeeper' function of the legitimate-business-interest test, which precludes consideration of time and territory absent a near-permanent relationship or confidentiality, Sunbelt's rejection of that test does merit some consideration." (Emphases in original.)

So, back to the question of what is the state of the LBI test in Illinois. Sunbelt, Steam Sales, and the majority of the three justices on Reliable all disagree with the lead opinion's view of the LBI test as flexible. The bench and bar are left to count heads, assuming they have the stamina to wade through the confusion engendered by the lead opinion. The view of the majority of the judges of the Second District is known as expressed in Steam Sales and Reliable. Mindful that we are a unified appellate court ( Granados, 172 Ill. 2d at 371), the bench and bar (and the employers and employees) must also look to Sunbelt's unanimous decision.

The lead opinion claims that the dissent advocates that Sunbelt be followed. 405 Ill. App. 3d at 741. I would hope that my intent to follow the lead of the special concurrence and craft a responsive-to-the-circumstances test for analyzing the validity of restrictive covenants was as clear as the language I used to state that I was not following Sunbelt. E.g., 405 Ill. App. 3d at 755, quoting 405 Ill. App. 3d at 749, quoting Sunbelt, 394 Ill. App. 3d at 431 ("I further agree completely with the special concurrence's repudiation of Sunbelt's holding [about evaluating a restrictive covenant with respect to] `" only the time-and-territory restrictions"`" (emphasis in original)). In any event, contrary to the lead opinion's thoughts, I believe that Sunbelt, Steam Sales, and the special concurrence and dissent here all herald a departure from the formalistic application of the LBI test. As Sunbelt quite properly noted, the LBI test is an appellate court gloss and has not been embraced by our supreme court. To the extent that Sunbelt repudiates the LBI test, it should be followed, as I have outlined above.

The special concurrence and this dissent in this case are in agreement with the statements regarding the viability of the LBI test in Steam Sales and Sunbelt. Given the physical location of the special concurrence and dissent, and given the incorrect denomination of the lead opinion as the majority, caused by placing that opinion in the primary position over the special concurrence, a casual reader might conclude that the nominal "majority" in this case is at odds with the prevailing view of the Second District as well as the view of the unified Appellate Court of Illinois. I have attempted to make clear where the actual majorities are in this case to dispel the confusion caused by the arrangement of our three opinions in this matter. Obviously, one of the worst things this court can do with regard to the parties in a particular case is to reach the wrong result. Perhaps one of the worst things we can do with regard to the bench, bar, and general public is to issue confusing statements of the law. Here, I think we have done both. The lead opinion and special concurrence agree (wrongly, in my view) that the restrictive covenant must not be enforced. The special concurrence and dissent agree that the LBI test should be abandoned in favor of a totality-of-the-circumstances determination of the existence of a protectable interest, a majority holding that is obscured by the arrangement of the three opinions in this case, thereby serving only to confuse the bench and bar (although I hope that the bench and bar's confusion is alleviated by this explanation). I therefore respectfully submit these remarks, concurring with whom and where as noted, and dissenting with whom and where as noted, in the hope of minimizing, if not repairing, the confusion that must inevitably arise from the arrangement of the three opinions submitted in this case.

The obvious course to prevent all of this confusion would be for Justice Hudson to write the lead opinion. Presiding Justice Zenoff could then write a typical special concurrence explaining that she agrees with Justice Hudson's result for a different reason, and I could dissent to say that I disagree with the result but agree with Justice Hudson's articulation of the law. This structure would convey to bench and bar a clear picture of the rejection of the LBI test by a majority of this panel as set forth in a lead opinion by Justice Hudson and endorsed by me.

The lead opinion offers no explanation for why this logical course has not been followed. I note that the lead opinion stiffly notes that "[s]eparate opinions are designated as special concurrences or dissents solely based upon their authors' agreement or disagreement with the judgment entered by the majority — not the rationale for that judgment." 405 Ill. App. 3d at 743. Labeling aside, I note that, as to a special concurrence, precisely the opposite is true. An opinion is designated a special concurrence because it agrees with the judgment of the court but not the rationale. Similarly, a dissent will frequently agree with the legal test to be applied, but will disagree with the conclusion. Obviously, the better practice would be to combine both the judgment and the rationale for that judgment in the same opinion. Here, the special concurrence combines both the majority judgment and the majority rationale for that judgment. This fact completely repudiates the lead opinion's contention, as well as its pretension to majority status.

Nevertheless, I observe that this is not the first time this court has inexplicably placed a minority view in a "majority" opinion. In another recent case, Snyder v. Heidelberger, 403 Ill. App. 3d 974 (2010), Justice McLaren wrote the "majority" opinion even though, as I explained in my dissent, Justice Jorgensen's special concurrence actually represented the majority view of the court. In my dissent, I questioned the illogical structure of the opinion, and I predicted that it would cause undue confusion for bench and bar. Indeed, not two weeks after Snyder's publication, at least one published case summary mistook Justice McLaren's "majority" opinion for the opinion of the court. Case Summaries, Chi. Daily L. Bull., August 20, 2010, at 1, 4. This decision will inevitably spawn similar unnecessary confusion.

This strange trend of allowing a judge with a minority view to author a majority opinion has but one possible explanation: it must be a result of our much-criticized practice of assigning one judge authorship of a decision before the full panel has discussed the appeal. As has been argued, this practice "encourages one-judge decisions and one-judge opinions" by causing panel judges to "give too much deference *** to the judge who has been assigned the opinion." R. Aldisert, Opinion Writing § 3.4, at 34 (1990). Since "[t]he term `collegiality' generally refers to the ideal of judges on a court or panel reaching a decision through a collaborative exchange in which the views of every judge contribute to the court's final understanding of the issues and resolution of the case," our practice "can inhibit collegiality by fostering excessive reliance on information provided by the assigned judge, who will have developed a proprietary interest in the draft opinion." M. Hummels, Distributing Draft Opinions Before Arguments on Appeal: Should the Court Tip Its Tentative Hand? The Case for Dissemination, 46 Ariz. L. Rev. 317, 332 n. 124 (2004); see also M. Ross, Reflections on Appellate Courts: An Appellate Advocate's Thoughts for Judges, 8 J. App. Prac. Process 355, 370 (2006) ("the ABA cautions against draft decisions written by a judge before conferencing with other members of the panel because the decision may not be a product of collegiality"), citing ABA Comm. On Standards of Judicial Administration § 3.30 (1977).

Even among those courts that follow this criticized practice, the assigned author does not retain majority authorship once her view is exposed as a minority view As this decision demonstrates, however, this court has such strong allegiance to the practice that it protects a judge's "author" designation even where that judge has a unique view of the case. Thus, as here, the court protects the status of the assigned author, at the cost of muddling the law we publish our opinions to clarify. I have resigned myself to the fact that the court's general practice of avoiding the collegial process will not change, regardless of any protestations from me or from the practice's many critics. However, I cannot fathom how that practice can be elevated to the point that it supersedes our duty to provide clear explanations of our decisions to bench and bar.