Chicago Business Litigation Lawyer Blog
As we previously wrote about, this May the Illinois legislature passed a major bill that significantly alters how and when employers can use restrictive covenants, such as non-compete and non-solicitation agreements, with Illinois employees. As expected, Governor JB Pritzker signed the bill into law. It will go into effect January 1, 2022, and will only apply to agreements entered into after that date.
The new law amends the Illinois Freedom to Work Act and serves both to codify existing requirements under Illinois case law but also to impose new restrictions on Illinois employers as to when, with whom, and under what circumstances they may use restrictive covenants with employees. The goal of the new bill is to clarify when Illinois courts will and will not enforce non-compete and non-solicitation agreements.
The current version of the Freedom to Work Act defines a “covenant not to compete” as an agreement between an employer and a low-wage employee that restricts such low-wage employee from performing:
- any work for another employer for a specified period of time;
- any work in a specified geographical area; or
- work for another employer that is similar to such low-wage employee’s work for the employer included as a party to the agreement.