Illinois is following the national trend to place limitations on employers’ use of noncompetes and non-solicit covenants. Some states have banned them altogether or prohibited them for certain professions. In 2016, Illinois took the first step by enacting the Illinois Freedom to Work Act (IFWA) which prohibits employers from entering into non-competition covenants with “low-wage” employees ($13.00 an hour or the applicable minimum wage). Illinois amended the IFWA effective January 1, 2022 to further restrict the use of non-competition and non-solicit covenants.

Some of the material changes include:

• The law applies to non-solicitation covenants and non-competition covenants. Nonsolicitation covenants include a covenant not to solicit employees as well as a covenant not to solicit clients.
• The concept of a “low-wage” employee was removed and instead the covenants are enforceable only if the employee earns above a certain income each year. Non-competition covenants are enforceable only if the employee’s earnings exceed $75,000 a year. Nonsolicitation covenants are enforceable only if the employee’s earnings exceed $45,000 a year. These income thresholds will increase every 5 years.
• If an employee is terminated or furloughed due to COVID-19 or a similar event, the employee’s non-compete and non-solicit covenants are unenforceable unless the employer pays the terminated or furloughed employee the employee’s regular base salary during the covenant restriction period. The...

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