In accordance with the restrictive covenant contained within the employment agreement, the circuit court enjoined plaintiff from practicing medicine for a period of two years within a 20-mile radius of AHI's office. The appellate court reversed, holding that under the corporate practice of medicine doctrine and this court's ruling in Berlin, the employment agreement between plaintiff and AHI was void and unenforceable. 317 Ill. App. 3d 260. The appellate court further held that, in any event, the noncompetition covenant contained within the employment agreement constituted "an unreasonable restraint of trade and is unenforceable on public-policy grounds."
Butler contends first the noncompetition agreement in his employment contract with Prairie should not be enforced because a covenant not to compete among physicians is unenforceable on public policy grounds. In support of this contention he cites Carter-Shields v. Alton Health Institute, 317 Ill. App. 3d 260, 270-71, 739 N.E.2d 569, 577 (2000) (a case from the Fifth District decided after our decision in Prairie in which the trial court found a noncompetition agreement between a physician and a health-care institute to be an undue interference with the public's right to a physician of their choice and the enforcement of the provision to be an unreasonable restraint of trade), appeal allowed, 194 Ill. 2d 566, 747 N.E.2d 351 (2001). In Carter-Shields, the court first found the defendant was not a licensed hospital but was a health-care provider controlled by a partnership of which one member was a nonphysician and was barred by the corporate practice of medicine doctrine from entering into an employment agreement with the plaintiff physician; thus, the entire employment agreement was void and unenforceable. Carter-Shields, 317 Ill. App. 3d at 267-68, 739 N.E.2d at 575.
Outsource Int'l, Inc. v. Barton, 192 F.3d662, 667 (7th Cir. 1999).SpringfieldRare Coin Galleries, Inc. v. Mileham, 250 Ill. App. 3d 922, 933-34, 620N.E.2d 479, 487-88 (Ill. App. Ct. 1993).Carter-Shields v. AltonHealth Institute, 317 Ill. App. 3d 260, 268, 739 N.E.2d 569, 575-76 (Ill.App. Ct. 2000), overturned on other grounds, Carter-Shields, MD v.Alton Health Institute, 201 Ill.2d 441, 777 N.E.2d 948 (Ill. 2002).Foodcomm Intern. v.Barry, 328 F.3d 300 (7th Cir. 2003)Foodcomm,Id.
See, e.g., Hanchett Paper Co. v. Melchiorre, 341 Ill. App. 3d 345, 351 (2003); Dam, Snell & Taveirne,Ltd. v. Verchota, 324 Ill. App. 3d 146, 151-52 (2001); Carter-Shields v. Alton Health Institute, 317 Ill. App. 3d 260, 268 (2000); Springfield Rare Coin Galleries, Inc. v. Mileham, 250 Ill. App. 3d 922, 929-30 (1993); A.B. Dick Co. v. American Pro-Tech, 159 Ill. App. 3d 786, 792-93 (1987); Reinhardt Printing Co. v. Feld, 142 Ill. App. 3d 9, 15-16 (1986); see also Outsource International, Inc. v. Barton, 192 F.3d 662, 666 (7th Cir. 1999) (applying Illinois law); Curtis 1000, Inc. v. Suess, 24 F.3d 941, 947 (7th Cir. 1994) ("But Illinois, unlike Delaware, limits the interests that a covenant not to compete may protect to trade secrets, confidential information, and relations with 'near-permanent' customers of the employer"). Even further, and exemplary of this erroneous proliferation of templates, our appellate court has developed two alternative "tests" to determine its "near-permanence" prong of its conclusive two-prong test for a promisee's legitimate business interest.
¶ 38 During the 36 years subsequent to Kolar, our appellate court has variously set forth this "test" as the sine qua non for the enforcement of a covenant not to compete. See, e.g., Hanchett Paper Co. v. Melchiorre, 341 Ill. App. 3d 345, 351 (2003); Dam, Snell & Taveirne, Ltd. v. Verchota, 324 Ill. App. 3d 146, 151-52 (2001); Carter-Shields v. Alton Health Institute, 317 Ill. App. 3d 260, 268 (2000); Springfield Rare Coin Galleries, Inc. v. Mileham, 250 Ill. App. 3d 922, 929-30 (1993); A.B. Dick Co. v. American Pro-Tech, 159 Ill. App. 3d 786, 792-93 (1987); Reinhardt Printing Co. v. Feld, 142 Ill. App. 3d 9, 15-16 (1986); see also Outsource International, Inc. v. Barton, 192 F.3d 662, 666 (7th Cir. 1999) (applying Illinois law); Curtis 1000, Inc. v. Suess, 24 F.3d 941, 947 (7th Cir. 1994) ("But Illinois, unlike Delaware, limits the interests that a covenant not to compete may protect to trade secrets, confidential information, and relations with 'near-permanent' customers of the employer"). Even further, and exemplary of this erroneous proliferation of templates, our appellate court has developed two alternative "tests" to determine its "near-permanence" prong of its conclusive two-prong test for a promisee's legitimate business interest.
In attempting to meet this burden, plaintiffs first point to our decision in Dowd Dowd, Ltd. v. Gleason, 181 Ill. 2d 460, 482 (1998), wherein we held that, in Illinois, restrictive covenants in attorney employment contracts are void as a matter of public policy. Citing to the appellate court decision in Carter-Shields v. Alton Health Institute, 317 Ill. App. 3d 260 (2000), plaintiffs argue that the public policy reasons for finding restrictive covenants in physician employment contracts void are even more compelling than the reasons advanced with respect to attorney employment contracts. Plaintiffs provide a laundry list of the possible adverse effects of allowing restrictive covenants in physician employment contracts, namely, that restrictive covenants in physician employment contracts interfere with the doctor-patient relationship, deny patients the freedom to choose their own doctor, create barriers to the delivery of quality medical care, hinder competition, and often force patients to incur the additional expense of duplicative testing.
Every district of the appellate court, including this one, has used similar language in restrictive-covenant cases. See Office Mates 5, North Shore, Inc. v. Hazen, 234 Ill. App. 3d 557, 569, 599 N.E.2d 1072, 1080 (1992) (First District); Dam, Snell Taveirne, Ltd. v. Verchota, 324 Ill. App. 3d 146, 151-52, 754 N.E.2d 464, 468-69 (2001) (Second District); Lyle R. Jager Agency, Inc. v. Steward, 253 Ill. App. 3d 631, 636, 625 N.E.2d 397, 400 (1993) (Third District); Springfield Rare Coin Galleries, Inc. v. Mileham, 250 Ill. App. 3d 922, 929-30, 620 N.E.2d 479, 485 (1993) (Fourth District); Carter-Shields v. Alton Health Institute, 317 Ill. App. 3d 260, 268, 739 N.E.2d 569, 575-76 (2000) (Fifth District). However, the Supreme Court of Illinois has never embraced this test, and its application is inconsistent with recent supreme court decisions concerning restrictive covenants.
During the more than three decades since the Kolar decision, the "legitimate-business-interest" test has been cited in one form or another by all the districts of the Illinois Appellate Court, including this one, when deciding restrictive-covenant cases. See Office Mates 5, North Shore, Inc. v. Hazen, 234 Ill. App. 3d 557, 569, 599 N.E.2d 1072, 1080 (1992) (First District); Dam, Snell Taveirne, Ltd. v. Verchota, 324 Ill. App. 3d 146, 151-52, 754 N.E.2d 464, 468-69 (2001) (Second District); Hanchett Paper Co. v. Melchiorre, 341 Ill. App. 3d 345, 351, 792 N.E.2d 395, 400 (2003) (Third District); Springfield Rare Coin Galleries, 250 Ill. App. 3d at 929-30, 620 N.E.2d at 485 (Fourth District); Carter-Shields v. Alton Health Institute, 317 Ill. App. 3d 260, 268, 739 N.E.2d 569, 575-76 (2000) (Fifth District). Thus, the Kolar court's initial analysis has devolved into the "legitimate-business-interest" test, which the Illinois Appellate Court appears to have created "out of whole cloth."
Every district of the appellate court, including this one, has used similar language in restrictive-covenant cases. See Office Mates 5, North Shore, Inc. v.Hazen, 234 Ill.App.3d 557, 569, 175 Ill.Dec. 58, 599 N.E.2d 1072, 1080 (1992) (First District); Dam, Snell & Taveirne, Ltd. v. Verchota, 324 Ill.App.3d 146, 151-52, 257 Ill.Dec. 806, 754 N.E.2d 464, 468-69 (2001) (Second District); Springfield Rare Coin Galleries, Inc. v.Mileham, 250 Ill.App.3d 922, 929-30, 189 Ill.Dec. 511, 620 N.E.2d 479, 485 (1993) (Fourth District); Carter-Shields v. Alton Health Institute, 317 Ill.App.3d 260, 268, 250 Ill.Dec. 806, 739 N.E.2d 569, 575-76 (2000) (Fifth District). However, the Supreme Court of Illinois has never embraced this test, and its application is inconsistent with recent supreme court decisions concerning restrictive covenants.
Based on the Dowd Dowd, Ltd. analysis, the Fifth District Appellate Court held that restrictive covenants in physician-employment contracts were unenforceable as against public policy. See Carter-Shields v. Alton Health Institute, 317 Ill. App. 3d 260, 739 N.E.2d 569 (2000). However, as the plaintiffs acknowledge, that portion of the appellate court's decision was vacated by the supreme court as advisory.