We note that only two Illinois cases, Agrimerica, Inc. v. Mathes (1990), 199 Ill. App.3d 435, 449-50, 557 N.E.2d 357, 367, and Zamouski v. Gerrard (1971), 1 Ill. App.3d 890, 897, 275 N.E.2d 429, 433, have held that justification is an affirmative defense which a defendant bears the burden of proving. In Agrimerica, we held that the circuit court erred by requiring the plaintiff to plead and prove lack of justification as an element of tortious interference.
The validity of a restrictive covenant is a question of law, and more particularly, of state law. Agrimerica, Inc. v. Mathes, 199 Ill. App.3d 435, 441, 145 Ill.Dec. 587, 592, 557 N.E.2d 357, 362 (1st Dist. 1990); Corroon Black, Inc. v. Magner, 145 Ill. App.3d 151, 162, 98 Ill.Dec. 663, 669, 494 N.E.2d 785, 791 (1st Dist. 1986). The appropriate state law is determined by reference to Erie R.R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938), which mandates that federal courts sitting in diversity, as we are here, apply the law of the state in which they are located.
However, this court has repeatedly held that there are two situations in which such an interest may be found to exist for the purposes of enforcing a covenant not to compete: (1) where the former employee acquired confidential information through his employment and subsequently attempted to use it for his own benefit, and (2) where the employer has a near-permanent relationship with its customers and but for his associations with the employer, the employee would not have had contact with the customers. Office Mates 5, North Shore, Inc. v. Hazen (1992), 234 Ill. App.3d 557, 569, 599 N.E.2d 1072, 1080; Nationwide Advertising Service, Inc. v. Kolar (1975), 28 Ill. App.3d 671, 673, 329 N.E.2d 300, 302; see also LSBZ, Inc. v. Brokis (1992), 237 Ill. App.3d 415, 603 N.E.2d 1240; Tyler Enterprises of Elmwood, Inc. v. Shafer (1991), 214 Ill. App.3d 145, 573 N.E.2d 863; Agrimerica, Inc. v. Mathes (1990), 199 Ill. App.3d 435, 557 N.E.2d 357; Packaging House, Inc. v. Hoffman (1983), 114 Ill. App.3d 284, 448 N.E.2d 947. CRC does not allege, and the record does not suggest, that Kovach misappropriated any confidential information acquired while in CRC's employ. Indeed, CRC concedes that the names, addresses and telephone numbers of its customers are readily obtainable by anyone wishing to contact them. CRC does, however, contend that the trial court abused its discretion in finding that CRC failed to raise a prima facie case demonstrating that it had a protectable interest in its clients under the second situation outlined above.
Plaintiff argues that exclusivity is not necessary to establish a near-permanent relationship. Illinois courts have applied two tests to determine whether an employer has a near-permanent relationship with its customers: the nature-of-the-business test, which considers the general characteristics of a business; and the seven-factors test, established in Agrimerica, Inc. v. Mathes, 199 Ill. App. 3d 435 (1990). We believe that the seven-factors test is more appropriate to this case because it provides a more complete analysis of the facts at issue here.
The plaintiff in restrictive covenant cases bears a burden to produce evidence that establishes a "basis for the assessment of damages with a fair degree of probability." Agrimerica, Inc. v. Mathes, 199 Ill. App. 3d 435, 452, 557 N.E.2d 357, 369 (1st Dist. 1990) abrogated on other grounds by Roy v. Coyne, 259 Ill. App. 3d 269, 630 N.E.2d 1024 (1st Dist. 1994). In Tower Oil, for example, the causation test was satisfied where the plaintiff showed that five "stable customers" switched their business to the competitor for which a defendant salesman had gone to work.
7) the continuity of the employers' relationship with customers. See Agrimerica, Inc. v. Mathes, 199 Ill. App.3d 435, 444, 145 Ill.Dec. 587, 557 N.E.2d 357 (1st Dist. 1990). However, it is often the case that the outcome of the near-permanency test is determined by the nature of the business involved.
(1) the existence of a valid and enforceable contract between plaintiff and another; (2) the awareness on the part of the defendant of the contractual relation; (3) defendant's intentional and unjustified inducement of the breach of the contract; (4) a subsequent breach by the other caused by defendant's wrongful conduct; and (5) damages.Agrimerica, Inc. v. Mathes, 557 N.E. 2d 357, 367 (Ill.App.Ct. 1990). Mississippi law provides a slight difference by not explicitly requiring a "breach" of the contract as one of its elements.
(Emphasis added.) Agrimerica, Inc. v. Mathes , 199 Ill.App.3d 435, 441-42, 145 Ill.Dec. 587, 557 N.E.2d 357 (1990) ; Moehling v. W.E. O'Neil Construction Co. , 20 Ill.2d 255, 265, 170 N.E.2d 100 (1960). "The preexisting duty rule provides that where a party does what it is already legally obligated to do, there is no consideration as there is no detriment."
This period of continued employment served as adequate consideration to support the postemployment restrictive covenant. See Agrimerica, Inc. v. Mathes, 199 Ill. App.3d 435, 442 (1990) (holding more than two years of continued employment constituted sufficient consideration). Therefore, the second prong of our preliminary analysis is also satisfied.
Plaintiff argues that the language "for any cause" in the employment contract requires that in order for defendants to enforce the clause, cause must have existed for her termination. Whether a noncompetition clause is enforceable is a question of law. ( Agrimerica, Inc. v. Mathes (1990), 199 Ill. App.3d 435, 441.) Illinois courts favor fair competition and disfavor restraints of trade.