As of January 1, 2022, Illinois employers are more limited in their ability to bind employees to non-competition and non-solicitation agreements. These changes stem from a recent amendment to the Illinois Freedom to Work Act, Illinois Senate Bill 672 (the Amendment). The Amendment codified several limitations around restrictive covenants, including non-compete and non-solicit agreements, which were previously only addressed by judicial decisions. The Amendment also imposed new hurdles around non-competes and non-solicits. These changes, which are outlined below, apply to non-competes and non-solicitation agreements entered into on or after January 1, 2022.

Minimum Salary Requirements for Non-Competes and Non-Solicits

Previously, Illinois law prohibited employers from entering into non-compete agreements with employees who earn $13 per hour or less. As amended, the Freedom to Work Act prohibits non-compete agreements for employees earning $75,000 per year or less. The Amendment likewise prohibits customer and co-worker non-solicit agreements for employees earning $45,000 per year or less. The salary threshold will increase to account for inflation through 2037. For non-competes the thresholds will increase as follows: $80,000 by January 1, 2027; $85,000 by January 1, 2032; and $90,000 by January 1, 2037. For non-solicits, the threshold will increase as follows: $47,500 in 2027; $50,000 in 2032; and $52,500 in 2037.

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