A recent Illinois Appellate Court decision found that one’s physical location is irrelevant in determining whether one has violated a non-competition provision.

In this case, the defendant owned and operated an integrative medicine business that provided services to patients in and around Bloomington and Peoria, Illinois. Defendant sold his business to the plaintiff through an asset purchase agreement. Among the assets purchased by the plaintiff were the patient list, patient records, goodwill, books, files, marketing data and all creative and promotional materials. The asset purchase agreement contained a non-competition clause that prohibited the defendant from providing integrative medical services within 30 miles of Bloomington and Peoria for three years after the sale.

After the defendant sold his business, defendant moved to California and began practicing integrative medicine with a company in California. However, defendant sent a letter to his former patients in Illinois stating that he was moving his physical office to a new location in California and that he looked forward to continuing to service his patients through his new location. The website of California company allowed patients to schedule at home blood draws and personal consultations, among other things.

Plaintiff subsequently filed suit against the defendant for violation of the non-competition clause, among other things. Defendant argued that providing services remotely to patients located within 30 miles of Bloomington and Peoria did not violate the non-competition clause. Both the trial court and the appellate court disagreed and entered (and upheld) a preliminary injunction prohibiting the defendant from continuing to contact former patients.

In upholding the trial courts entry of a preliminary injunction, the appellate court found that the elements of a preliminary injunction had been met: the harm to be suffered by the plaintiff was obvious as the loss of customers and sales and the threat of continuation of such losses to a legitimate business interest was sufficient to show that plaintiff would suffer irreparable injury unless protected; monetary damages would not compensate plaintiff for the potential loss of patients and competitive position threatened by defendant’s conduct; and the non-competition clause was reasonable and enforceable in the context of the sale of a business as in such a situation the goodwill purchased by the buyer is protected. Finally, the court found that the solicitation of clients that lived within 30 miles of Bloomington and Peoria through the internet was a violation of the non-competition clause and the fact that the defendant was not physically present in Illinois did not exempt him from the non-competition clause.