Illinois Non-Compete Agreement Overview
Illinois Restricts Non-Compete Agreements
Illinois places significant restrictions on non-compete agreements. Not all employees can be subject to non-competes. Review the state-specific requirements below to determine whether your agreement is enforceable.
Illinois significantly reformed its non-compete law with the Illinois Freedom to Work Act (effective January 1, 2022). The law prohibits non-compete agreements for employees earning $75,000 or less per year and non-solicitation agreements for employees earning $45,000 or less per year (these thresholds increase by $5,000 every five years). The Act also codified important procedural requirements that employers must follow.
Under Illinois law, the employer must advise the employee in writing to consult an attorney before signing the agreement and must provide the employee at least 14 calendar days to review the agreement before signing. The agreement must be supported by adequate consideration — for existing employees, this means at least two years of continued employment after signing, or other independent consideration such as a raise or bonus. Illinois courts apply the blue-pencil doctrine and can reform overbroad non-competes.
Restricted
Enforceability
No statutory cap
Max duration
Yes
Blue-pencil
2 years employment or independent consideration
Consideration
Illinois Enforceability Requirements
Understanding Illinois's specific rules is essential for drafting an enforceable non-compete agreement. The following provisions apply in Illinois.
Key Provisions
- Non-competes PROHIBITED for employees earning $75,000/year or less
- Non-solicitation agreements PROHIBITED for employees earning $45,000/year or less
- Employer must advise employee to consult an attorney before signing
- Employee must have at least 14 days to review the agreement
- Adequate consideration required: 2 years of continued employment or independent consideration
- Blue-pencil doctrine applies — courts can reform overbroad restrictions
- Income thresholds increase by $5,000 every five years
How to Draft a Non-Compete in Illinois
Follow these steps to create an enforceable non-compete agreement that complies with Illinois law.
Verify State Requirements
Confirm that your non-compete complies with Illinois's enforceability standards, including any income thresholds, duration caps, and procedural requirements.
Define Restricted Activities Narrowly
Be specific about what activities are restricted. Broad prohibitions are more likely to be struck down or modified by Illinois courts.
Set Reasonable Geographic Scope
Limit the geographic restriction to areas where your company actually operates or where the employee had client responsibility in Illinois.
Provide Adequate Consideration
Ensure the employee receives adequate consideration for the non-compete restriction. In Illinois, 2 years employment or independent consideration.
Include Severability and Signatures
Add a severability clause and get proper signatures from both parties. In Illinois, this helps protect the enforceable portions of the agreement if any provision is found overbroad.
Recent Legal Changes in Illinois
The Illinois Freedom to Work Act took effect January 1, 2022. It was a major overhaul of Illinois non-compete law, establishing income thresholds, procedural requirements, and codifying the consideration requirement. The income thresholds will increase periodically.
Employer Tips for Illinois
Verify the employee meets the income threshold before requiring a non-compete. Provide written advice to consult an attorney and allow 14 days for review. Ensure adequate consideration — for existing employees, document independent consideration beyond continued employment. Keep restrictions narrow and specific.
Employee Rights in Illinois
If you earn $75,000 or less, non-compete agreements are void. If you earn $45,000 or less, non-solicitation agreements are also void. Even for higher earners, the employer must advise you to consult an attorney and give you 14 days to review. Lack of adequate consideration is grounds for voiding the agreement.
Sample Illinois Non-Compete Agreement
Below is a preview of our Illinois-specific non-compete agreement. Your customized document will include all provisions required for enforceability in Illinois.
NON-COMPETE AGREEMENT
STATE OF ILLINOIS
Covenant Not to Compete
EMPLOYER:
Company Name: [Legal Entity Name]
Address: [Illinois Address]
Business Type: [Industry]
EMPLOYEE:
Name: [Full Legal Name]
Position: [Job Title]
Start Date: [Date]
NON-COMPETE TERMS
Restricted Activities: [Specific Activities]
Geographic Scope: [Area]
Duration: [Time Period] following termination
Consideration: [What Employee Receives]
Governing Law: State of Illinois
Illinois Non-Compete Agreement FAQ
Answers to common questions about non-compete agreements in Illinois, including enforceability, duration limits, and employee rights.
Official Illinois Resources
Use these official resources to verify Illinois non-compete enforceability rules and access state employment law information.
Illinois Department of Labor
State labor law information and employment resources
Illinois Attorney General
Consumer protection and employment law guidance
FTC Non-Compete Rulemaking
Federal non-compete rule status and developments
ABA Labor and Employment Law
American Bar Association employment law resources
Related Illinois Documents
Depending on your situation, you may need additional documents alongside your Illinois non-compete agreement.
Illinois Non-Disclosure Agreement
Protect confidential information and trade secrets
Illinois Non-Solicitation Agreement
Prevent poaching of clients and employees
Illinois Employment Agreement
Comprehensive employment terms and conditions
Illinois Severance Agreement
Separation terms with non-compete provisions
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