Non-Compete Agreements in Illinois: 2022 Law Changed Everything
Illinois dramatically changed its non-compete landscape with the Illinois Freedom to Work Act, effective January 1, 2022. The new law introduces income thresholds, notice requirements, and the right to attorney's fees that fundamentally shift the balance toward employees.
The Illinois Freedom to Work Act
The 2022 law added significant restrictions:
Income Thresholds (Adjusted Annually)
- Non-compete agreements: Cannot be enforced against employees earning less than $75,000/year (increases to $80,000 in 2027, then $90,000 in 2032)
- Non-solicitation agreements: Cannot be enforced against employees earning less than $45,000/year (increases similarly)
Required "Adequate Consideration"
For non-competes signed after January 1, 2022:
- At least 2 years of continued employment, OR
- Some other adequate consideration
Attorney Review Requirement
Employers must:
- Advise employees in writing to consult an attorney before signing
- Provide at least 14 calendar days to review before signing
Traditional Reasonableness Standards Still Apply
Even if the new requirements are met, Illinois courts still evaluate non-competes for reasonableness. Courts consider:
- Whether the activity is actually competitive
- The geographic scope and duration
- Whether restrictions are necessary to protect legitimate interests
- The hardship imposed on the employee
Categories of Workers Who Cannot Be Restricted
The Illinois Freedom to Work Act prohibits non-competes for:
- Employees earning below the threshold amounts
- Workers covered by collective bargaining agreements
- Construction workers
- Government workers and contractors
- Workers who were laid off, furloughed, or terminated during COVID-19
Attorney's Fees Provision
If an employee successfully challenges a non-compete that violates the Act, they may recover:
- Actual damages
- Reasonable attorney's fees and costs
- Injunctive relief
Practical Guidance
- Check your income level—you may be exempt from enforcement
- Verify you received the required notice about attorney review
- Confirm you had 14 days to review before signing
- Document your consideration—what did you get for signing?
Frequently Asked Questions
What income threshold applies to Illinois non-competes?
As of 2024, non-compete agreements cannot be enforced against Illinois employees earning less than $75,000/year. This threshold increases to $80,000 in 2027 and $90,000 in 2032. Non-solicitation agreements have a lower threshold of $45,000.
What changed with the Illinois Freedom to Work Act?
The 2022 law introduced income thresholds below which non-competes are unenforceable, requires employers to give employees 14 days to review and advise them to consult an attorney, requires adequate consideration, and allows employees to recover attorney's fees for violations.
Do I need to receive anything for signing a non-compete in Illinois?
Yes, for non-competes signed after January 1, 2022, there must be 'adequate consideration'—either at least 2 years of continued employment or some other substantial benefit beyond just the job itself.
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