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of the business interest, but the time and distance factors do not. Implicitly the court seems to say that
weak showings on the business interest are permissible if the time and place restrictions are weak also.
Moreover, in the age of e-commerce, narrow area restrictions often will be no restrictions at all.

Fourth, Reliable increases uncertainty at the planning stage. Rejecting the significance of
precedents, it concedes that the “same identical contract and restraint may be reasonable and valid under
one set of circumstances, and unreasonable and invalid under another set of circumstances.”

This last observation leads to a fifth: The Supreme Court’s decision says nothing about the “totality of
circumstances” test’s implications for the legendary “blue pencil” debate – i.e., when a court finds a written
covenant unreasonable, does it invalidate it in toto or does it enforce the covenant so far as reasonable?
The difficulty in knowing the result under the new system likely will lead to support for the latter approach.

Sixth, while it has been suggested that Reliable calls for non-compete promisees to initiate a
wholesale rewriting of such agreements, we suggest a more measured response. To the extent
existing non-competes are based on confidential information or near-permanence of customer relations,
Reliable does not invalidate those – it simply says that other factors also may be considered. Similarly, to
the extent covenants have been reasonably tailored on the time and place factors, Reliable does not
invalidate those, assuming they can be justified by a legitimate business interest.

This last observation leads to a seventh: Nothing in Reliable requires that the business interests be
stated in the agreement. Certainly it may be helpful to have them stipulated in the
document. However, if the legitimate interest can be proven by extraneous proof,
promisees should think twice about tearing up existing agreements and writing
new ones. We say this because non-competes are contracts, and new
contracts require new consideration. If an employee already has obtained
access to your trade secrets and customer data, but you in effect concede
that the old covenant was invalid, what is to be the consideration for the
new covenant? Some may say continued employment of an at-will employee,
but some courts have been churlish about that proposition. See, e.g., Diederich
Ins. Agcy., LLC v. Smith, 2011 IL App (5th) 100048. Similarly, if a business has been sold, and the non-
compete is defensible, the buyer should think twice about demanding that the agreement be reopened.

Finally, Reliable can be criticized for failing to address sale-of-business concerns more directly and
distinctly. When a business is sold, protection of the good will typically requires that the seller agree not
to compete. This is, in truth, an anti-competitive agreement – but is it unreasonable and
illegitimate? Age-old case law says “not necessarily”. Moreover, in the sale-of-business
context, we have another body of law – antitrust law – which properly may inform
the analysis (after all, only unreasonable restraints of trade are unlawful under those
laws). Is the business being acquired by a competitor or by someone not currently in the
industry? If the latter, the transaction merely substitutes A for B and total competition is
not diminished. If it is a competitor acquiring the business, how concentrated or diverse is
competition in the relevant market before and after the sale? It is manifestly
unreasonable to treat the acquisition by the 25th-largest competitor of the 26th-largest
with the same standard as the acquisition by No. 1 of No. 2. It is true that courts properly
should not decide cases that are not before them. However, it is unfortunate that the messages of
Reliable for sales of businesses were not made more clear.

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