Competition Noncompetition For 50 In Illinois
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FAQ
Under Illinois's recent noncompete law, the $75,000 income threshold is not set to increase until 2027. As for the remaining states, a date of increase is not predetermined, and there is no reason to expect increases in 2025.
Several factors can void or limit the enforceability of a non-compete agreement, including overly broad restrictions, unreasonable time frames or geographical limits, lack of consideration (such as compensation or job opportunities provided in exchange for the agreement), and violation of public policy.
Additionally, the agreement not to compete must not impose undue hardship on the employee. A clause prohibiting the employee from working for a competitor in a 10 mile radius may be acceptable, but one that prohibits him from working for any competitor in North America may not.
Under the new law in 2022, employers may not enter into a covenant not to compete with any employee who earns (or is expected to earn) $75,000 or less per year, and may not enter into a non-solicitation agreement with an employee who earns (or is expected to earn) $45,000 or less per year.
Prohibits employers from entering into a covenant not to compete or covenant not to solicit after January 1, 2026. Any such covenants entered into on or after January 1, 2026 are deemed illegal and void, even if the contract was signed and the employment occurred outside of Illinois.
Like non-compete agreements, however, non-solicitation agreements are only enforceable if a court determines that they are reasonable. Our non-solicitation agreement litigation attorneys can advise Chicago clients on whether a particular agreement is likely to be reasonable.
As a result, the rule, which was set to take effect on September 4, 2024, is void, and existing non-compete agreements remain enforceable under federal law.
The Illinois Freedom to Work Act (IFWA) prohibits non-compete agreements between an employer and low-wage employees (see Question 1). Illinois courts have not yet addressed the IFWA. Illinois courts generally disfavor non-competes as a restraint of trade.
Proving there was a breach of your employment contract is another way that you can defeat a non-compete agreement. If your employer did not fulfill the employment contract terms, they likely can't force you to stick to a non-compete agreement. This is known as a material breach.
