Illinois Freedom to Work Act

New Law Effecting Restrictive Covenants

The Illinois Freedom to Work Act, which went into effect on January 1, 2022, regulates the enforceability of post-employment restrictive covenants such as non-competition, non-solicitation, and confidentiality agreements as never before. To comply with this new law, post-employment restrictive covenants entered into on or after January 1, 2022 must ensure the following:

  1. The employee makes enough ($75,000 in 2022 and $80,000, $85,000 and $90,000 in 2027, 2031, and 2037, respectively, for non-competition agreements;
  2. The salary figures for non-solicitation or non-piracy agreements are $45,000 in 2022 up to $52,5000 by 2037;
  3. Both types of agreements are unenforceable if the employee loses his/her job due to a pandemic;
  4. There must be independent consideration to support the restrictive covenants – so, at the least, a portion of the compensation needs to be carved and identified as consideration for the restrictions or a bonus or some other form of consideration must be provided to support the restrictive covenants;
  5. Continued or new employment is not sufficient consideration unless the employee works for the employer at least two years after having agreed to the restrictions;
  6. If an employer sues to enforce the agreement and loses, the employer must pay the employee’s attorney's fees; and
  7. Employees must be advised to consult with an attorney and given at least 14 days to consider the agreement before having to sign it.