Pam's Academy of Dance/Forte Arts Center v. Marik
Pam's Academy of Dance/Forte Arts Center v. Marik
Opinion
*652 ¶ 1 In this action brought by plaintiff, Pam's Academy of Dance/Forte Arts Center (Pam's Academy), against defendant, Callie Marik, the Grundy County circuit court certified two questions for interlocutory appeal pursuant to Illinois Supreme Court Rule 308(a) (eff. July 1, 2017). We granted defendant's application for leave to appeal. We decline to answer the first certified question, answer the second certified question affirmatively, and remand for further proceedings.
¶ 2 I. BACKGROUND
¶ 3 On April 7, 2017, plaintiff filed an amended three-count complaint against defendant, seeking monetary damages and injunctive relief. Two counts alleged breach of contract, and the third count alleged breach of the Illinois Trade Secrets Act ( 765 ILCS 1065/1 et seq. (West 2016) ). Specifically, plaintiff asserted that defendant, a former employee, breached the parties' "NON-DISCLOSURE AGREEMENT AND RESTRICTIVE COVENANT"
*323 *653 (Agreement) by opening a dance studio within 25 miles of Pam's Academy and soliciting students and/or teachers via an improperly-obtained customer list.
¶ 4 Although plaintiff did not specify which covenants in the Agreement defendant allegedly violated, the Agreement contains three posttermination restrictive covenants that form the basis for the action. In particular, the Agreement provides:
"3. Upon termination of employment for any reason whatsoever, the undersigned will not engage in any similar business, either directly or indirectly, as a shareholder, officer, or director of any corporation, or as a partner in any general or limited partnership or individually as a sole proprietorship engaged in a similar business within a 25 mile radius of Pam's Academy of Dance/Forte Arts Center, for a period of not less than five (5) years form [ sic ] the date of written termination of employment from Pam's Academy of Dance/Forte Arts Center.
4. It is further agreed, that as a condition of employment and/or continued employment of Pam's Academy of Dance/Forte Arts Center, the undersigned will not solicit or do business with any of the teachers, students and/or parents of Pam's Academy of Dance/Forte Arts Center * * * for a period of not less than three (3) years from the date of termination of employment, for whatever reason, notwithstanding that the undersigned may be engaged, either directly or indirectly in a similar business within a twenty five (25) mile limitation described above.
* * *
7. The undersigned agrees not to solicit, interfere with, divert, or otherwise communicate with any person who is a customer, client, student, parent, or employee for the purpose of providing similar services or products as provided by Pam's Academy of Dance/Forte Arts Center."
¶ 5 On April 25, 2017, defendant filed a motion to dismiss all claims pursuant to section 2615 of the Code of Civil Procedure ( 735 ILCS 5/2-615 (West 2016) ). Defendant argued that all of plaintiff's claims were defective because (1) the provisions of the Agreement it was attempting to enforce were invalid and unenforceable as a matter of law (counts I and II) and (2) it failed to allege a plausible factual basis that she misappropriated a customer list (count III).
¶ 6 Following a June 2017 hearing, the trial court entered its order denying defendant's motion as to counts I and II, but striking paragraph seven of the Agreement as overbroad. The court also dismissed count III without prejudice. Thereafter, on defendant's motion, the court certified the following two questions for interlocutory review pursuant to Illinois Supreme Court Rule 308(a) (eff. July 1, 2017):
"[1]. Do employment-based restrictive covenants with time periods lasting 'not less than' five and 'not less than' three years contain an enforceable and reasonable temporal scope under Prairie Rheumatology Assocs., S.C. v. Francis ,2014 IL App (3d) 140338 ,388 Ill.Dec. 150 ,24 N.E.3d 58 , and Reliable Fire Equipment Co. v. Arredondo ,2011 IL 111871 ,358 Ill.Dec. 322 ,965 N.E.2d 393 ?
[2]. In the context of employment-based restrictive covenants, do restrictions lasting 'not less than' five and 'not less than' three years mean five and three years respectively?"
This court allowed defendant's application for leave to appeal.
¶ 8 A. Certified Questions and the Standard of Review
¶ 9 Our review of an interlocutory appeal brought pursuant to Rule 308 is limited to the certified questions.
De Bouse v. Bayer AG
,
¶ 10 B. The Meaning of "Not Less Than" in Employment-Based Restrictive Covenants
¶ 11 Because we must first resolve the second certified question to place the first certified question in the proper context, we address it first. Thus, we must determine whether "[i]n the context of employment-based restrictive covenants," restrictions of "not less than" five and "not less than" three mean five and three years respectively.
¶ 12 The primary objective when construing the language of a contract is to give effect to the intent of the parties, which is discerned from the language of the contract.
Thompson v. Gordon
,
¶ 13 As indicated above, paragraph three of the Agreement provides that defendant may not engage "in a similar business within a 25 mile radius of Pam's Academy of Dance/Forte Arts Center, for a period of not less than five (5) years." (Emphasis added.) Paragraph four of the Agreement provides that defendant may "not solicit or do business with any of the teachers, students and/or parents of Pam's Academy of Dance * * * for a period of not less than three (3) years from the date of termination of employment." (Emphasis added.)
¶ 14 Plaintiff asserts that the time limits in the Agreement "clearly set an unambiguous period of three and five years for each restrictive covenant to terminate." Defendant disagrees, asserting that a strict construction of the Agreement requires this court to avoid an interpretation that devolves the "no less than" language into mere surplusage. See
Berkeley Properties, Inc. v. Balcor Pension Investors II
,
¶ 15 The phrase "not less than" is routinely used in Illinois statutes and contracts. In some cases, it establishes a minimum requirement. See,
e.g.
, 625 ILCS 5/12-601(a) (West 2016) (a motor vehicle must be equipped with a horn audible from a distance of
not less than
200 feet); 820 ILCS 105/4 (West 2016) (setting minimum
*655
*325
hourly wage at
not less than
$8.25); 510 ILCS 5/13(a) (West 2016) (requiring confinement of a dog that bites a human for a period of
not less than
10 days); 725 ILCS 205/1.01 (West 2016) (defining "sexually dangerous persons" as "[a]ll persons suffering from a mental disorder * * * [that] has existed for a period of
not less than one year
* * * who have demonstrated propensities toward acts of sexual assault or acts of sexual molestation of children" (emphasis added) ); 735 ILCS 5/9-209 (West 2016) ("A landlord or his or her agent may, any time after rent is due, demand payment thereof and notify the tenant, in writing, that unless payment is made within a time mentioned in such notice,
not less than
5 days after service thereof, the lease will be terminated." (Emphasis added.) );
Rosenberger v. United Community Bancshares, Inc.
,
¶ 16 In other situations, the "not less than" phrase is used to establish a starting point followed by language that defines a termination point. See,
e.g.
, 730 ILCS 5/5-4.5-40(a) (West 2016) (sentencing range for a Class 3 felony shall be "
not less than
2 years and
not more than
5 years" (emphases added) ); 740 ILCS 175/4(d) (West 2016) (providing that a person bringing an action or settling a claim under the Illinois False Claims Act shall receive an amount
not less than
15% but
not more than
25% of the proceeds if the State intervenes and
not less than
25% and
not more than
30% of the proceeds if the State does not intervene);
King Koil Licensing Co. v. Harris
,
¶ 17 Still, in other situations, "not less than" simply means the particular number that the phrase modifies. We are aware of no Illinois court that has considered the phrase "not less than" in terms of modifying a temporal period in the context of an employment-based restrictive covenant. See
Petrzilka v. Gorscak
,
¶ 18 For example, in
Bennett v. Georgia Industrial Catering Co.
,
"When used at the ending point, 'not less than' means that particular number, and no other 'maximum' is stated because there is none. It would not make sense for the wording to be that [the defendant] promises she will not open a home for a period of not less than two years after her termination nor more than, say, three years. That would be a very roundabout way of saying she would not open a home for three years after termination. 'Not less than two years' would have no meaning, as it would not measure any operative event." Id.
¶ 19 In
Chandler v. Mastercraft Dental Corp. of Texas Inc.
,
¶ 20 We agree with the out-of-state authority, interpreting the phrase "not less than" as being the particular number it modifies. We find further support for our determination by noting that in circumstances such as these-where the temporal scope of the restrictive covenant is defined as not less than three years or not less than five years respectively-no employer could make a good faith argument that a prior employee violated her noncompete agreement by soliciting business from previous students or setting up her own shop four or six years later. In fact, in that situation, it would be more than appropriate to sanction the plaintiff for bringing a claim in bad faith. Accordingly, we answer the second certified question affirmatively and find that employment-based restrictive covenants lasting 'not less than' five and 'not less than' three years mean five and three years (and not a day less) respectively.
¶ 21 C. The Reasonableness of Employment-Based Restrictive Covenants Lasting Three and Five Years, Respectively
¶ 22 Having answered the second certified question affirmatively, we now consider the first certified question in the appropriate context. Thus, we ask whether "employment-based restrictive covenants with time periods lasting * * * five and * * * three years [respectively] contain an enforceable and reasonable temporal scope under
Prairie Rheumatology Assocs., S.C. v. Francis
,
¶ 23 In
Reliable Fire
, our supreme court reiterated its long-established three-dimensional rule of reason: "A restrictive covenant, assuming it is ancillary to a valid employment relationship, is reasonable only if the covenant: (1) is no greater than is required for the protection of a legitimate business interest of the employer-promisee; (2) does not impose undue hardship on the employee-promisor; and (3) is not injurious to the public."
Reliable Fire
,
¶ 24 In this case, we are simply unable to determine whether employment-based restrictive covenants lasting three and five years, respectively, are reasonable in their temporal scope. What may be a reasonable duration in one instance may be unreasonable in another. The reasonableness of the restrictive covenants at issue here requires the resolution of a number of facts. See id. ¶ 46 ("Particularly where, as here, the ultimate issue-the reasonableness of the agreements-turns upon the totality of the facts and circumstances surrounding them, the parties must be given a full opportunity to develop the necessary evidentiary record." (Internal quotation marks omitted.) ). Accordingly, we decline to answer the first certified question.
¶ 25 III. CONCLUSION
¶ 26 For the reasons stated, we decline to answer the first certified question, answer the second certified question affirmatively, and remand for further proceedings.
¶ 27 First certified question not answered; second certified question answered; cause remanded.
Presiding Justice Carter and Justice Holdridge concurred in the judgment and opinion.
Case-law data current through December 31, 2025. Source: CourtListener bulk data.