Lessons Learned From, and Bon Voyage to, Our Very Own Tony Valiulis
After practicing law nearly 42 years — each and every one of them at Much Shelist — Tony Valiulis is retiring. Before Tony rides off into the legal sunset, I had an opportunity to sit down with him and ask for his insights on the past, present, and future of Illinois non-compete law, his advice to employers in an ever-changing regulatory and business landscape, as well as some of his most memorable experiences as a practicing attorney.
Q. What do you predict for the future of non-compete covenants here in Illinois?
A. Naturally, the future is hard to predict, but my gut feeling is that courts will use the “totality of the circumstances” test from Reliable as the framework for assessing all aspects of non-competes, including the adequacy of consideration. Already, many federal courts have refused to apply the rigid two-year rule from Fifield, and have relied, instead, on a more facts-and-circumstances approach to assessing the reasonableness of non-competes. In fact, I would not be surprised if the Illinois Supreme Court eventually overrules Fifield. I say that even though Fifield was my case.
Interestingly, Reliable really didn’t change the landscape like we expected it would. It is neither easier nor more difficult to enforce non-competes than before Reliable was decided. Illinois has been and continues to be neither employer-friendly nor employee-friendly. In fact, my colleagues and I have been successful on both sides: enforcing non-competes when we represent the employee’s former employer, and having non-competes struck down when we represent the employee and/or the new employer. I expect that this trend will continue if the “totality of the circumstances” in a particular case warrants it.
The federal Defend Trade Secrets Act of 2016 (DTSA) also will change the playing field tremendously. I anticipate that more cases will be filed in federal court, and they will drag along with the DTSA claims contract and employment-related claims that are traditionally addressed by state courts. I expect that, as a result, we will see a variety of unintended consequences.
Q. What advice do you have for employers who are trying to protect their confidential information or their customer base?
A. Employers need to look at what they are trying to protect and then take appropriate steps to protect it. Non-competes are not one-size-fits-all. Employers should write their covenants in a way that is customized for their business and their industry in order to protect their proprietary information most effectively. Covenants should be narrowly crafted and employers need to take steps internally at their business to protect their information.
Here’s a real-world example: A buyer purchased all of a seller’s assets, including all non-compete agreements and confidential information. The buyer subsequently tried to enforce a non-compete against a former employee who had worked for the seller, but quit before the sale closed. The employee (who we represented) won the case, because the buyer had failed to put restrictions on the seller requiring it to maintain the confidentiality of its information after the sale. In fact, the seller was permitted to keep copies of confidential information and wasn’t restricted from using or publishing the information. The buyer’s failure to protect the information from general use by the seller precluded the buyer’s attempt to enforce the non-compete against the former employee. Bottom line: If you believe you have something protectable, take all reasonable steps to protect it.
Q. As you look back over your career, what was your most interesting trial experience?
A. We were representing one of three brothers (who were actually named Tom, Dick, and Harry). Our client’s brother (a witness favorable to our client) had been on the witness stand for all of two minutes when the judge decided to break for lunch. After lunch, our client’s brother took his seat back on the stand and was quite obviously totally drunk. He reeked of alcohol. The judge, the lawyers, even the jury could smell the alcohol. I knew I couldn't keep him on the stand or ask any substantive questions. So I simply said, "Did you have a good lunch," and ended my examination.
Q. What has been the most significant change in the more than 40 years you have been in practice?
A. E-discovery. It’s both a bane and a boon in litigation. With e-discovery, parties can now obtain information they never could have gotten before. But e-discovery increases the cost of discovery dramatically and makes the discovery process much more difficult, because there is so much more information that can either help or hurt your client’s case.
First, e-discovery was limited to just computers and servers. Now, it has extended to cell phones, watches, and other electronic devices. It’s critical at the outset of litigation — particularly for businesses who are parties to a case — to get control over their electronic information. This means putting in place, at a minimum and even before litigation is ever contemplated, carefully written document retention and Internet use policies.
Q. What are the most important things you have learned during your career?
A. Develop relationships — with clients, colleagues, and opposing counsel. Civility is important despite the need to be an advocate. Learning about a client’s business from the start is critical to being an effective and trusted advisor. Develop subspecialties that make you valuable. And stick around for a long time.
Q. How do you want to be remembered after you retire?
A. If you had a tough question about the law, Tony was the guy to go to.
We’ll miss having Tony just down the hall, but something tells me that he won’t be hanging up his spurs completely. I bet that if I ever have a tough legal question, he’ll still be the guy I can go to.
And although we are sad to see him go, Tony leaves much more at Much Shelist than just his legacy. He has nurtured a strong team of trade secrets and restrictive covenants lawyers who are well prepared to carry on his work.
Thank you, Tony, for the indelible mark you have left in countless areas and subspecialties of the law… and on Much Shelist. Don’t be a stranger.