Are you considering having your employees sign a non-compete agreement?
If so, you will need to familiarize yourself with the
Illinois Freedom to Work Act, signed into law by Governor Bruce Rauner in 2016.
The law was created to discourage and prohibit the misuse and abuse of
non-compete agreements for low-wage employees. A low wage employee is,
“an employee who earns the greater of (1) the hourly rate equal
to the minimum wage required by the applicable federal, State, or local
minimum wage law or (2) $13.00 per hour,” according to the Act.
The Act does not apply to non-compete agreements entered into prior to
the law’s effective date, which was January 1, 2017. Instead, it
applies to all non-compete agreements entered into after the effective date.
Who is Affected by the Act?
While the Act is relatively brief, it is having a significant impact on
private sector employers who were in the practice of having all employees,
regardless of wage, sign non-compete agreements.
Under Section 10 of the Act, private sector employers are expressly prohibited
from having their low-wage employees enter into non-compete agreements.
Section 10(b) of the Act states, “A covenant not to compete entered
into between an employer and a low-wage employee is illegal and void.”
Under the Act, a covenant not to compete refers to any agreement between
an employer and a low-wage employee that bars the low-wage employee from:
- Performing work for a different employer for a certain time period,
- Working within a specific geographical area, and
- Accepting a job with another employer, performing work that is similar
to the low-wage employee’s work for their current employer.
However, the Act does not expressly affect employer non-solicitation agreements
on employees who make $13.00 an hour or less. Further, the Act does not
affect confidentiality or non-disclosure agreements between employers
Only non-compete agreements signed after January 1, 2017 are within the
Act’s scope. If you are looking to have your employees enter into
a non-compete agreement, consider having a Chicago
business law attorney from our firm review your situation and determine if a non-compete
agreement is necessary to protect your company and its interests.
If you have questions or concerns about non-compete agreements in Illinois
and Wisconsin, contact our firmto speak with a knowledgeable lawyer right away.