New Illinois Law Limits Non-Compete Agreements

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The Illinois legislature enacted new legislation invalidating non-compete agreements for certain employees. Effective January 1, 2017, employers are prohibited from entering into non-compete agreements with employees who earn $13 an hour or less.

The “Illinois Freedom to Work Act” (S.B. 3163) will make any non-compete agreement "illegal and void" if entered into on, or after, January 1, 2017 if it prevents a low wage employee from:
  • Working in a specified geographic area;
  • Working for another employer for a specified time; or  
  • Working for another employer that performs similar work. 
The law does not apply to agreements to protect confidential information, or not to solicit customers or employees, or to agreements entered into before January. 1, 2017.

If your company has post-employment competition restrictions with low-wage earners, you should seek legal guidance given this new Illinois law.

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