A new law in Illinois prohibits employers from entering into noncompete contracts with employees who earn $13 per hour or less. The Illinois Freedom to Work Act (Public Act 099-0860) became effective on Jan. 1, 2017. The law makes it illegal for an Illinois employer to enter into a “covenant not to compete” contract with any of its “low-wage employees.”

The term “covenant not to compete” is defined to extend to any agreement restricting a covered employee from the following:

Working for another employer for a specified period of time.
Working in a specified geographic area.
Performing other “similar” work for another employer.

Any contract with a “low-wage employee” who contains any covenant not to compete is “illegal and void.” The act is limited to agreements entered into after the effective date of Jan. 1, 2017. The act comes out of the movement to curb employers from locking lower-level employees into unfair noncompeting contracts.

However, the act does not prevent an employer from restricting its employees from sharing trade secrets, confidential information, customer lists or soliciting customers from a former employer.

Illinois companies should be aware of this new law when bringing in new workers at lower wages with an employment contract. Employers should be reviewing their policies to make sure that their noncompete agreements are compliant with the current law.

Even with this new law, it is important to note that generally Illinois courts abhor restrictive covenants and noncompete agreements that are not abundantly reasonable in time and geographic area and are focused solely on protecting an employer’s legitimate special interests.

Kreisman Law Offices has been successfully handling business litigation, contract law, commercial litigation and corporation law for individuals, families and businesses for more than 40 years in and around Chicago, Cook County and its surrounding areas including Long Grove, Wheeling, Vernon Hills, Elmwood Park, Elmhurst, Riverside, Elgin, Joliet, Waukegan, Gurnee, Chicago (Polish Village, Wrigleyville, Roscoe Village, Austin, Albany Park, Goose Island, Woodlawn, Riverdale), Dolton, Hazel Crest and Markham, Ill.

Robert D. Kreisman has been an active member of the Illinois and Missouri bars since 1976.

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