{ "type": "practice-guide", "canonical": "https://openagreements.org/practice-guides/non-compete/us/illinois", "links": [ { "rel": "self", "href": "https://openagreements.org/practice-guides/non-compete/us/illinois.json", "type": "application/json" }, { "rel": "alternate", "href": "https://openagreements.org/practice-guides/non-compete/us/illinois", "type": "text/html" }, { "rel": "alternate", "href": "https://openagreements.org/practice-guides/non-compete/us/illinois/markdown", "type": "text/markdown" }, { "rel": "alternate", "href": "https://openagreements.org/practice-guides/non-compete/us/illinois/json", "type": "application/json" } ], "data": { "topic": "non-compete", "state": "illinois", "frontmatter": { "title": "Non-Competes in Illinois", "description": "A question-by-question summary of Illinois non-compete law under the Illinois Freedom to Work Act (820 ILCS 90), including the $75,000/$45,000 earnings thresholds, the codified two-year consideration rule and its express-delineation requirement for benefit-based consideration, the 14-day notice requirement, the totality-of-the-circumstances reasonableness test, the construction, broadcaster, nurse-agency, and mental-health carve-outs, judicial reformation limits, tolling-during-breach clauses, trade-secret alternatives, employee fee-shifting and Attorney General enforcement, and the 2026 Workplace Transparency Act limits on out-of-state choice-of-law and venue clauses.", "state": "Illinois", "lastReviewed": "2026-06-03", "license": "CC BY 4.0", "authors": [ "steven-obiajulu" ], "summary": { "enforceability": "payThreshold", "bottomLine": "Illinois enforces employee non-competes only above a $75,000 earnings floor and only if they clear the Freedom to Work Act's consideration and 14-day-notice gates and the Reliable Fire reasonableness test.", "keyLaw": "Illinois Freedom to Work Act, 820 ILCS 90 (Reliable Fire Equipment Co. v. Arredondo)", "exceptions": "Construction workers; broadcasters; temp-agency nurses; public-sector CBA; COVID-19 layoffs; certain mental-health professionals; sale of business excluded", "banEffectiveDate": "Jan 1, 2022 (Public Act 102-358)", "courtNarrowing": "rewrite", "appliesToContractors": "unclear", "extendedForBreach": "Not addressed by statute — open question", "maxLength": "No statutory maximum (duration judged for reasonableness)", "noticeRequirement": "14 calendar days before start or signing", "incomeThreshold": "$75,000 non-compete; $45,000 non-solicit", "saleOfBusiness": "Excluded from Freedom to Work Act", "customerNonSolicit": "Allowed above $45,000 and if reasonable", "employeeNonSolicit": "Allowed above $45,000 and if reasonable" }, "about": [ "Illinois non-compete agreements", "Illinois Freedom to Work Act, 820 ILCS 90", "Illinois earnings thresholds for non-competes and non-solicits", "Illinois adequate-consideration and 14-day notice rules", "Reliable Fire Equipment Co. v. Arredondo reasonableness test", "Illinois construction, broadcaster, nurse-agency, and mental-health carve-outs", "Illinois judicial reformation and Attorney General enforcement" ], "translations": [ { "language": "中文", "status": "planned" }, { "language": "Español", "status": "planned" }, { "language": "Português", "status": "planned" }, { "language": "Deutsch", "status": "planned" } ], "relatedForm": { "slug": "openagreements-restrictive-covenant-illinois" } }, "questions": [ { "slug": "employee-non-compete-enforceability", "label": "Are employee non-competes enforceable?", "heading": "Are employee non-compete agreements enforceable in Illinois?", "answerText": "Yes, but only if the covenant clears the statutory gates of the Illinois Freedom to Work Act and then survives the common-law reasonableness test. A covenant not to compete or not to solicit is illegal and void unless the employee received adequate consideration, the restraint is ancillary to a valid employment relationship, it is no greater than necessary to protect a legitimate business interest, it imposes no undue hardship, and it is not injurious to the public.", "sources": [ { "id": "ifwa-15-enforceability", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "820 ILCS 90/15", "citation": "820 ILCS 90/15.", "url": "https://www.ilga.gov/documents/legislation/ilcs/documents/082000900K15.htm", "proposition": "820 ILCS 90/15 supports that a covenant not to compete or not to solicit is illegal and void unless it satisfies adequate consideration, ancillarity, the legitimate-business-interest limit, no undue hardship, and no public injury.", "verbatimQuote": "A covenant not to compete or a covenant not to solicit is illegal and void unless (1) the employee receives adequate consideration, (2) the covenant is ancillary to a valid employment relationship, (3) the covenant is no greater than is required for the protection of a legitimate business interest of the employer, (4) the covenant does not impose undue hardship on the employee, and (5) the covenant is not injurious to the public.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/illinois#src-ifwa-15-enforceability" }, { "id": "reliable-fire-3prong", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Reliable Fire Equipment Co. v. Arredondo", "citation": "Reliable Fire Equipment Co. v. Arredondo, 2011 IL 111871.", "url": "https://www.courtlistener.com/opinion/3135645/reliable-fire-equipment-co-v-arredondo/", "deepLink": "https://www.courtlistener.com/opinion/3135645/reliable-fire-equipment-co-v-arredondo/#:~:text=A%20restrictive%20covenant%2C%20assuming%20it,not%20injurious%20to%20the%20public.", "proposition": "Reliable Fire Equipment Co. v. Arredondo supports the Illinois three-prong rule of reason: a restrictive covenant ancillary to a valid employment relationship is reasonable only if it protects a legitimate business interest, imposes no undue hardship, and is not injurious to the public.", "verbatimQuote": "A restrictive covenant, assuming it is ancillary to a valid employment relationship, is reasonable only if the covenant: (1) is no greater than is required for the protection of a legitimate business interest of the employer-promisee; (2) does not impose undue hardship on the employee-promisor, and (3) is not injurious to the public.", "date": "2011-12-01", "anchor": "https://openagreements.org/practice-guides/non-compete/us/illinois#src-reliable-fire-3prong" } ] }, { "slug": "earnings-thresholds", "label": "Which workers can be bound?", "heading": "Who can be bound by a non-compete in Illinois?", "answerText": "Only workers above the statutory earnings floors. A non-compete is void unless the employee's actual or expected annualized earnings exceed $75,000, and a non-solicit is void unless they exceed $45,000; both floors step up over time.", "sources": [ { "id": "ifwa-10-noncompete-threshold", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "820 ILCS 90/10", "citation": "820 ILCS 90/10(a).", "url": "https://www.ilga.gov/documents/legislation/ilcs/documents/082000900K10.htm", "proposition": "820 ILCS 90/10(a) supports that a non-compete is void unless the employee's actual or expected annualized earnings exceed $75,000, an amount that increases over time.", "verbatimQuote": "No employer shall enter into a covenant not to compete with any employee unless the employee's actual or expected annualized rate of earnings exceeds $75,000 per year.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/illinois#src-ifwa-10-noncompete-threshold" }, { "id": "ifwa-10-nonsolicit-threshold", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "820 ILCS 90/10", "citation": "820 ILCS 90/10(b).", "url": "https://www.ilga.gov/documents/legislation/ilcs/documents/082000900K10.htm", "proposition": "820 ILCS 90/10(b) supports that a non-solicit is void unless the employee's actual or expected annualized earnings exceed $45,000, an amount that increases over time.", "verbatimQuote": "No employer shall enter into a covenant not to solicit with any employee unless the employee's actual or expected annualized rate of earnings exceeds $45,000 per year.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/illinois#src-ifwa-10-nonsolicit-threshold" } ] }, { "slug": "adequate-consideration", "label": "What consideration is required?", "heading": "What counts as adequate consideration for an Illinois non-compete?", "answerText": "Either two years of continued employment after signing, or other professional or financial benefits adequate to support the restraint. Illinois codified the Fifield two-year rule, but a financial benefit relied on as consideration must be expressly tied to the covenant — a Midwest Lending trap.", "sources": [ { "id": "ifwa-5-consideration", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "820 ILCS 90/5", "citation": "820 ILCS 90/5.", "url": "https://www.ilga.gov/documents/legislation/ilcs/documents/082000900K5.htm", "proposition": "820 ILCS 90/5 supports that adequate consideration means at least two years of employment after signing, or other professional or financial benefits adequate to support the covenant.", "verbatimQuote": "\"Adequate consideration\" means (1) the employee worked for the employer for at least 2 years after the employee signed an agreement containing a covenant not to compete or a covenant not to solicit or (2) the employer otherwise provided consideration adequate to support an agreement to not compete or to not solicit, which consideration can consist of a period of employment plus additional professional or financial benefits or merely professional or financial benefits adequate by themselves.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/illinois#src-ifwa-5-consideration" }, { "id": "fifield-2yr", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Fifield v. Premier Dealer Services, Inc.", "citation": "Fifield v. Premier Dealer Services, Inc., 2013 IL App (1st) 120327.", "url": "https://www.courtlistener.com/opinion/3148347/fifield-v-premier-dealer-services-inc/", "deepLink": "https://www.courtlistener.com/opinion/3148347/fifield-v-premier-dealer-services-inc/#:~:text=Generally%2C%20Illinois%20courts%20have%20held,or%20more%20constitutes%20adequate%20consideration.", "proposition": "Fifield v. Premier Dealer Services supports that continued employment for two years or more is generally required to constitute adequate consideration for a restrictive covenant.", "verbatimQuote": "Generally, Illinois courts have held that continued employment for two years or more constitutes adequate consideration.", "date": "2013-06-24", "anchor": "https://openagreements.org/practice-guides/non-compete/us/illinois#src-fifield-2yr" }, { "id": "midwest-delineation", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Midwest Lending Corp. v. Horton", "citation": "Midwest Lending Corp. v. Horton, 2023 IL App (3d) 220132.", "url": "https://www.courtlistener.com/opinion/9401053/midwest-lending-corp-v-horton/", "deepLink": "https://www.courtlistener.com/opinion/9401053/midwest-lending-corp-v-horton/#:~:text=Accordingly%2C%20we%20reject%20Midwest's%20argument,agreement%20to%20the%20nonsolicitation%20provision.", "proposition": "Midwest Lending Corp. v. Horton supports that a signing bonus described in an offer letter did not provide adequate consideration for a later, integrated nonsolicitation agreement that did not identify the bonus as consideration for the covenant.", "verbatimQuote": "Accordingly, we reject Midwest's argument that the “signing bonus” in the offer letter provided adequate consideration for Horton's later agreement to the nonsolicitation provision.", "date": "2023-05-22", "anchor": "https://openagreements.org/practice-guides/non-compete/us/illinois#src-midwest-delineation" } ] }, { "slug": "notice-requirement", "label": "Is advance notice required?", "heading": "Must an Illinois employer give advance notice before a non-compete is signed?", "answerText": "Yes. The covenant is void unless the employer advises the employee in writing to consult an attorney and either provides a copy of the covenant at least 14 calendar days before employment begins or otherwise gives the employee at least 14 calendar days to review it.", "sources": [ { "id": "ifwa-20-notice", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "820 ILCS 90/20", "citation": "820 ILCS 90/20.", "url": "https://www.ilga.gov/documents/legislation/ilcs/documents/082000900K20.htm", "proposition": "820 ILCS 90/20 supports that a covenant is void unless the employer advises the employee in writing to consult an attorney and either provides a copy at least 14 calendar days before employment begins or gives the employee at least 14 calendar days to review the covenant.", "verbatimQuote": "A covenant not to compete or a covenant not to solicit is illegal and void unless (1) the employer advises the employee in writing to consult with an attorney before entering into the covenant and (2) the employer provides the employee with a copy of the covenant at least 14 calendar days before the commencement of the employee's employment or the employer provides the employee with at least 14 calendar days to review the covenant.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/illinois#src-ifwa-20-notice" } ] }, { "slug": "reasonableness", "label": "How is reasonableness judged?", "heading": "How do Illinois courts judge whether a non-compete is reasonable?", "answerText": "By the totality of the circumstances, not a rigid formula. A legitimate business interest exists based on all the facts of the case, and the same restraint can be reasonable in one situation and unreasonable in another.", "sources": [ { "id": "ifwa-7-lbi", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "820 ILCS 90/7", "citation": "820 ILCS 90/7.", "url": "https://www.ilga.gov/documents/legislation/ilcs/documents/082000900K7.htm", "proposition": "820 ILCS 90/7 supports that a legitimate business interest is determined under the totality of the facts and circumstances of the individual case, with no single factor controlling.", "verbatimQuote": "In determining the legitimate business interest of the employer, the totality of the facts and circumstances of the individual case shall be considered.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/illinois#src-ifwa-7-lbi" }, { "id": "reliable-fire-totality", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Reliable Fire Equipment Co. v. Arredondo", "citation": "Reliable Fire Equipment Co. v. Arredondo, 2011 IL 111871.", "url": "https://www.courtlistener.com/opinion/3135645/reliable-fire-equipment-co-v-arredondo/", "deepLink": "https://www.courtlistener.com/opinion/3135645/reliable-fire-equipment-co-v-arredondo/#:~:text=Rather%2C%20we%20adopt%20the%20position,circumstances%20of%20the%20individual%20case.", "proposition": "Reliable Fire Equipment Co. v. Arredondo supports that whether a legitimate business interest exists is based on the totality of the facts and circumstances of the individual case rather than a rigid test.", "verbatimQuote": "Rather, we adopt the position of Justice Hudson's special concurrence, which is: whether a legitimate business interest exists is based on the totality of the facts and circumstances of the individual case.", "date": "2011-12-01", "anchor": "https://openagreements.org/practice-guides/non-compete/us/illinois#src-reliable-fire-totality" } ] }, { "slug": "industry-bans", "label": "Which workers are categorically exempt?", "heading": "Which Illinois workers are categorically off-limits for non-competes?", "answerText": "Several, though they differ in kind. Construction workers, broadcasters, and temporary agency nurses face flat bans; covenants against public-sector collective-bargaining-covered employees, COVID-19-related layoffs, and mental-health professionals treating veterans and first responders are voided or unenforceable on narrower, conditional terms.", "sources": [ { "id": "ifwa-10-construction", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "820 ILCS 90/10", "citation": "820 ILCS 90/10(e).", "url": "https://www.ilga.gov/documents/legislation/ilcs/documents/082000900K10.htm", "proposition": "820 ILCS 90/10(e) supports that covenants not to compete and not to solicit are void and illegal for individuals employed in construction, except those who primarily perform management, engineering/architectural, design, or sales functions or who are shareholders, partners, or owners.", "verbatimQuote": "A covenant not to compete or a covenant not to solicit is void and illegal with respect to individuals employed in construction, regardless of whether an individual is covered by a collective bargaining agreement. This subsection (e) does not apply to construction employees who primarily perform management, engineering or architectural, design, or sales functions for the employer or who are shareholders, partners, or owners in any capacity of the employer.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/illinois#src-ifwa-10-construction" }, { "id": "ifwa-10-cba", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "820 ILCS 90/10", "citation": "820 ILCS 90/10(d).", "url": "https://www.ilga.gov/documents/legislation/ilcs/documents/082000900K10.htm", "proposition": "820 ILCS 90/10(d) supports that a covenant not to compete is void and illegal as to individuals covered by a collective bargaining agreement under the Illinois Public Labor Relations Act or the Illinois Educational Labor Relations Act.", "verbatimQuote": "A covenant not to compete is void and illegal with respect to individuals covered by a collective bargaining agreement under the Illinois Public Labor Relations Act or the Illinois Educational Labor Relations Act.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/illinois#src-ifwa-10-cba" }, { "id": "ifwa-10-covid", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "820 ILCS 90/10", "citation": "820 ILCS 90/10(c).", "url": "https://www.ilga.gov/documents/legislation/ilcs/documents/082000900K10.htm", "proposition": "820 ILCS 90/10(c) supports that a covenant is void as to an employee terminated, furloughed, or laid off due to COVID-19 or similar circumstances unless enforcement includes base-salary-equivalent compensation, minus subsequent earnings, for the enforcement period.", "verbatimQuote": "No employer shall enter into a covenant not to compete or a covenant not to solicit with any employee who an employer terminates or furloughs or lays off as the result of business circumstances or governmental orders related to the COVID-19 pandemic or under circumstances that are similar to the COVID-19 pandemic, unless enforcement of the covenant not to compete includes compensation equivalent to the employee's base salary at the time of termination for the period of enforcement minus compensation earned through subsequent employment during the period of enforcement.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/illinois#src-ifwa-10-covid" }, { "id": "ifwa-10-mentalhealth", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "820 ILCS 90/10", "citation": "820 ILCS 90/10(f).", "url": "https://www.ilga.gov/documents/legislation/ilcs/documents/082000900K10.htm", "proposition": "820 ILCS 90/10(f) supports that covenants entered after January 1, 2025 are unenforceable against licensed mental health professionals providing services to veterans and first responders where enforcement would likely increase the cost or difficulty of obtaining those services.", "verbatimQuote": "Any covenant not to compete or covenant not to solicit entered into after January 1, 2025 (the effective date of Public Act 103-915) shall not be enforceable with respect to the provision of mental health services to veterans and first responders by any licensed mental health professional in this State if the enforcement of the covenant not to compete or covenant not to solicit is likely to result in an increase in cost or difficulty for any veteran or first responder seeking mental health services.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/illinois#src-ifwa-10-mentalhealth" }, { "id": "broadcast-ban", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "820 ILCS 17/10", "citation": "820 ILCS 17/10.", "url": "https://www.ilga.gov/documents/legislation/ilcs/documents/082000170K10.htm", "proposition": "820 ILCS 17/10 supports that a broadcasting industry employer may not require a post-employment geographic/time restraint, though it does not prevent enforcement during the contract term or against an employee who breaches the contract.", "verbatimQuote": "No broadcasting industry employer may require in an employment contract that an employee or prospective employee refrain from obtaining employment in a specific geographic area for a specific period of time after termination of employment with that broadcasting industry employer. (b) This Section does not prevent the enforcement of a covenant not to compete during the term of an employment contract or against an employee who breaches an employment contract.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/illinois#src-broadcast-ban" }, { "id": "nurse-ban", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "225 ILCS 510/14", "citation": "225 ILCS 510/14(g).", "url": "https://www.ilga.gov/documents/legislation/ilcs/documents/022505100K14.htm", "proposition": "225 ILCS 510/14(g) supports that nurse agencies are prohibited from entering into covenants not to compete with nurses and certified nurse aides placed at a health care facility on a temporary basis.", "verbatimQuote": "Nurse agencies are prohibited from entering into covenants not to compete with nurses and certified nurse aides if the nurse is employed, assigned, or referred by a nurse agency to a health care facility on a temporary basis or the certified nurse aide is employed, assigned, or referred by a nurse agency to a health care facility on a temporary basis.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/illinois#src-nurse-ban" } ] }, { "slug": "court-narrowing", "label": "Will a court narrow an overbroad covenant?", "heading": "Will an Illinois court rewrite an overbroad non-compete instead of voiding it?", "answerText": "Sometimes, but it is discretionary and far from guaranteed. The IFWA permits reformation yet warns that extensive judicial rewriting may be against public policy, and Illinois courts have refused to rescue patently overbroad covenants.", "sources": [ { "id": "ifwa-35-reformation", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "820 ILCS 90/35", "citation": "820 ILCS 90/35.", "url": "https://www.ilga.gov/documents/legislation/ilcs/documents/082000900K35.htm", "proposition": "820 ILCS 90/35 supports that extensive judicial reformation may be against Illinois public policy and that reformation is discretionary, guided by factors including the fairness of the restraints as written, whether the draft was a good-faith effort, the extent of reformation, and whether the agreement authorized modification.", "verbatimQuote": "Extensive judicial reformation of a covenant not to compete or a covenant not to solicit may be against the public policy of this State and a court may refrain from wholly rewriting contracts. (b) In some circumstances, a court may, in its discretion, choose to reform or sever provisions of a covenant not to compete or a covenant not to solicit rather than hold such covenant unenforceable. Factors which may be considered when deciding whether such reformation is appropriate include the fairness of the restraints as originally written, whether the original restriction reflects a good-faith effort to protect a legitimate business interest of the employer, the extent of such reformation, and whether the parties included a clause authorizing such modifications in their agreement.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/illinois#src-ifwa-35-reformation" }, { "id": "assured-overbroad", "authorityType": "case-law", "tier": "primary-source-backed", "title": "AssuredPartners, Inc. v. Schmitt", "citation": "AssuredPartners, Inc. v. Schmitt, 2015 IL App (1st) 141863.", "url": "https://www.courtlistener.com/opinion/3173530/assuredpartners-inc-v-schmitt/", "deepLink": "https://www.courtlistener.com/opinion/3173530/assuredpartners-inc-v-schmitt/#:~:text=We%20decline%20to%20rescue%20a,covenant%20that%20is%20patently%20overbroad.", "proposition": "AssuredPartners, Inc. v. Schmitt supports that Illinois courts will decline to judicially modify a restrictive covenant that is patently overbroad.", "verbatimQuote": "We decline to rescue a draftor from the risks of crafting a restrictive covenant that is patently overbroad.", "date": "2016-01-29", "anchor": "https://openagreements.org/practice-guides/non-compete/us/illinois#src-assured-overbroad" } ] }, { "slug": "extended-for-breach", "label": "Does a tolling clause extend the period?", "heading": "Does a tolling or extension-during-breach clause extend an Illinois non-compete?", "answerText": "Illinois law does not squarely answer this. No IFWA provision addresses a clause that pauses or extends the restricted period during breach or litigation, and an extension that pushes the effective restraint past a reasonable duration is exposed under the statute's reasonableness requirement and its limits on reformation.", "sources": [ { "id": "q8-ifwa-15", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "820 ILCS 90/15", "citation": "820 ILCS 90/15.", "url": "https://www.ilga.gov/documents/legislation/ilcs/documents/082000900K15.htm", "proposition": "820 ILCS 90/15 supports that a covenant is void unless it is no greater than required to protect a legitimate business interest, which bears on a tolling clause that extends the effective duration of the restraint.", "verbatimQuote": "A covenant not to compete or a covenant not to solicit is illegal and void unless (1) the employee receives adequate consideration, (2) the covenant is ancillary to a valid employment relationship, (3) the covenant is no greater than is required for the protection of a legitimate business interest of the employer, (4) the covenant does not impose undue hardship on the employee, and (5) the covenant is not injurious to the public.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/illinois#src-q8-ifwa-15" }, { "id": "q8-ifwa-35", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "820 ILCS 90/35", "citation": "820 ILCS 90/35(a).", "url": "https://www.ilga.gov/documents/legislation/ilcs/documents/082000900K35.htm", "proposition": "820 ILCS 90/35 supports that extensive judicial reformation may be against public policy, so a court may decline to cut an open-ended tolling extension back to a reasonable term rather than rewrite it.", "verbatimQuote": "Extensive judicial reformation of a covenant not to compete or a covenant not to solicit may be against the public policy of this State and a court may refrain from wholly rewriting contracts.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/illinois#src-q8-ifwa-35" } ] }, { "slug": "trade-secret-alternative", "label": "What protections survive outside the Act?", "heading": "What protections can Illinois employers use when a non-compete is risky?", "answerText": "Confidentiality and trade-secret protections, which sit outside the IFWA. The Act excludes confidentiality, trade-secret, and invention agreements from its definitions, and the Illinois Trade Secrets Act says a duty of secrecy is not void merely for lacking time or geographic limits.", "sources": [ { "id": "ifwa-5-exclusions", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "820 ILCS 90/5", "citation": "820 ILCS 90/5.", "url": "https://www.ilga.gov/documents/legislation/ilcs/documents/082000900K5.htm", "proposition": "820 ILCS 90/5 supports that the definition of a covenant not to compete excludes confidentiality agreements, trade-secret and invention-protection covenants, and sale-of-business covenants.", "verbatimQuote": "\"Covenant not to compete\" does not include (1) a covenant not to solicit, (2) a confidentiality agreement or covenant, (3) a covenant or agreement prohibiting use or disclosure of trade secrets or inventions, (4) invention assignment agreements or covenants, (5) a covenant or agreement entered into by a person purchasing or selling the goodwill of a business or otherwise acquiring or disposing of an ownership interest", "anchor": "https://openagreements.org/practice-guides/non-compete/us/illinois#src-ifwa-5-exclusions" }, { "id": "itsa-8-secrecy", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "765 ILCS 1065/8", "citation": "765 ILCS 1065/8(b)(1).", "url": "https://www.ilga.gov/documents/legislation/ilcs/documents/076510650K8.htm", "proposition": "765 ILCS 1065/8(b)(1) supports that a contractual duty to maintain secrecy or limit use of a trade secret is not void or unenforceable solely for lacking durational or geographic limits.", "verbatimQuote": "This Act does not affect: (1) contractual remedies, whether or not based upon misappropriation of a trade secret, provided however, that a contractual or other duty to maintain secrecy or limit use of a trade secret shall not be deemed to be void or unenforceable solely for lack of durational or geographical limitation on the duty", "anchor": "https://openagreements.org/practice-guides/non-compete/us/illinois#src-itsa-8-secrecy" } ] }, { "slug": "remedies-enforcement", "label": "What are the penalties for overreaching?", "heading": "What does an Illinois employer risk by overreaching on a non-compete?", "answerText": "Paying the employee's legal fees and facing Attorney General penalties. In an employer-filed action or arbitration to enforce a covenant, a prevailing employee recovers costs and reasonable attorney's fees, and the Attorney General can pursue pattern-and-practice violations with civil penalties — and has done so.", "sources": [ { "id": "ifwa-25-fees", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "820 ILCS 90/25", "citation": "820 ILCS 90/25.", "url": "https://www.ilga.gov/documents/legislation/ilcs/documents/082000900K25.htm", "proposition": "820 ILCS 90/25 supports that in a civil action or arbitration filed by an employer to enforce a covenant, an employee who prevails recovers all costs and reasonable attorney's fees from the employer.", "verbatimQuote": "in a civil action or arbitration filed by an employer (including, but not limited to, a complaint or counterclaim), if an employee prevails on a claim to enforce a covenant not to compete or a covenant not to solicit, the employee shall recover from the employer all costs and all reasonable attorney's fees regarding such claim to enforce a covenant not to compete or a covenant not to solicit, and the court or arbitrator may award appropriate relief.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/illinois#src-ifwa-25-fees" }, { "id": "ifwa-30-ag", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "820 ILCS 90/30", "citation": "820 ILCS 90/30(d).", "url": "https://www.ilga.gov/documents/legislation/ilcs/documents/082000900K30.htm", "proposition": "820 ILCS 90/30 supports that the Attorney General may pursue pattern-and-practice violations and that a court may impose civil penalties up to $5,000 per violation or $10,000 per repeat violation within five years.", "verbatimQuote": "the Attorney General may request and the court may impose a civil penalty not to exceed $5,000 for each violation or $10,000 for each repeat violation within a 5-year period.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/illinois#src-ifwa-30-ag" }, { "id": "valvoline", "authorityType": "agency-guidance", "tier": "official-source-backed", "title": "Attorney General Raoul Reaches Settlement With Valvoline Over Use of Non-Compete Agreements", "citation": "Ill. Att'y Gen., Settlement with Valvoline (Aug. 1, 2024).", "url": "https://illinoisattorneygeneral.gov/news/story/attorney-general-raoul-reaches-settlement-with-valvoline-over-use-of-non-compete-agreements", "proposition": "The Illinois Attorney General's 2024 Valvoline settlement supports that the State actively enforces against non-competes imposed on lower-wage workers.", "verbatimQuote": "Raoul and the attorneys general allege Valvoline required its hourly employees to sign non-competition agreements that prohibited them from working in the oil change business at any store within 100 miles of a Valvoline location for one year after leaving Valvoline.", "date": "2024-08-01", "anchor": "https://openagreements.org/practice-guides/non-compete/us/illinois#src-valvoline" } ] }, { "slug": "choice-of-law", "label": "Can a choice-of-law clause bypass Illinois law?", "heading": "Can an out-of-state choice-of-law or venue clause bypass Illinois non-compete law?", "answerText": "Only in a limited, but important, way. The Workplace Transparency Act, effective 2026, voids a unilateral employment clause that applies non-Illinois law or requires an out-of-state venue to the extent it diminishes an Illinois employee's rights related to an unlawful employment practice — but it is not a general rule that every non-compete choice-of-law clause is void.", "sources": [ { "id": "wta-choice-of-law", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "820 ILCS 96/1-25", "citation": "820 ILCS 96/1-25(b).", "url": "https://www.ilga.gov/documents/legislation/ilcs/documents/082000960K1-25.htm", "proposition": "820 ILCS 96/1-25(b) supports that a unilateral employment clause is against public policy to the extent it diminishes an Illinois employee's rights related to an unlawful employment practice, including by applying non-Illinois law or requiring an out-of-state venue for the employee's claim.", "verbatimQuote": "(b) Any agreement, clause, covenant, or waiver that is a unilateral condition of employment or continued employment and requires the employee or prospective employee to waive, arbitrate, or otherwise diminish any existing or future claim, right, or benefit related to an unlawful employment practice to which the employee or prospective employee would otherwise be entitled under any provision of State or federal law, including that which purports to shorten the applicable statute of limitation, apply non-Illinois law to an Illinois employee's claim, or require a venue outside of Illinois to adjudicate an Illinois employee's claim, is against public policy, void to the extent it denies an employee or prospective employee a substantive or procedural right or remedy related to alleged unlawful employment practices, and severable from an otherwise valid and enforceable contract under this Act.", "anchor": "https://openagreements.org/practice-guides/non-compete/us/illinois#src-wta-choice-of-law" } ] }, { "slug": "no-poach", "label": "Are employer no-poach agreements treated the same?", "heading": "Are no-poach agreements between employers treated like employee non-competes?", "answerText": "No. An agreement between competing employers not to hire each other's workers is analyzed under the Illinois Antitrust Act, not the IFWA, and the Illinois Supreme Court has held such agreements are not exempt from antitrust scrutiny.", "sources": [ { "id": "elite-nopoach", "authorityType": "case-law", "tier": "primary-source-backed", "title": "State ex rel. Raoul v. Elite Staffing, Inc.", "citation": "State ex rel. Raoul v. Elite Staffing, Inc., 2024 IL 128763.", "url": "https://www.courtlistener.com/opinion/9467526/state-ex-rel-raoul-v-elite-staffing-inc/", "deepLink": "https://www.courtlistener.com/opinion/9467526/state-ex-rel-raoul-v-elite-staffing-inc/#:~:text=We%20hold%20that%20the%20Illinois,employment%20opportunities%20for%20their%20employees.", "proposition": "State ex rel. Raoul v. Elite Staffing supports that the Illinois Antitrust Act does not exempt from scrutiny agreements between competitors to hold down wages and limit employment opportunities, distinguishing inter-employer no-poach restraints from employee covenants.", "verbatimQuote": "We hold that the Illinois Antitrust Act does not exempt from antitrust scrutiny all agreements between competitors to hold down wages and to limit employment opportunities for their employees.", "date": "2024-01-19", "anchor": "https://openagreements.org/practice-guides/non-compete/us/illinois#src-elite-nopoach" } ] } ] } }