Illinois may be on the road to becoming the “California” of the Midwest based on the latest developments in its employment laws. The following is a look at the key regulatory changes for 2022 and possible changes for 2022 and beyond.

Restricting Restrictive Covenants: Noncompetition and Nonsolicitation

Effective 1 January 2022, an amendment to the “Illinois Freedom to Work Act” will codify the following changes to restrictive covenant law by statute:

• Noncompetition covenants are only enforceable against individuals making more than US$75,000 per year.
• Nonsolicitation covenants are only enforceable against individuals making more than US$45,000 per year.
• Noncompetition and nonsolicitation covenants are only enforceable if the individual receives “adequate consideration” at the time of executing the covenant or alternatively after the individual has worked for the company for a minimum of two years.
• Employers must provide employees with at least 14 days to review the restrictive covenant agreement or provision after the agreement is provided or—alternatively—14 days prior to the employee’s start date of employment. Further, employers must inform employees in advance of signing of their right to consult with an attorney.

The new statute also defines “adequate consideration” (albeit rather vaguely); codifies other common law principles, such as “legitimate business interest”; and allows a prevailing employee to recover costs and reasonable attorney’s fees in cases when the...

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