Illinois Noncompete Agreement: What's Included and Enforceability

Quick Facts — Noncompete Agreement Lawyers (Illinois)

Is a Non-Compete Agreement Enforceable in Illinois?

Yes. In Illinois, non-compete agreements are generally enforceable. On January 1, 2022, Illinois enacted the Illinois Freedom to Work Act which modified the laws governing non-compete agreements. Under the new act, non-compete agreements are enforceable if the contract meets the following conditions:

  • The employee entering the agreement must earn at least $75,000 annually.
  • The employee must be employed for at least two years or have received professional or financial benefits.
  • The non-compete agreement must protect an employer’s legitimate business interest.
  • The contract must be deemed reasonable using the “Three-Component Test” created by the Illinois Supreme Court.
  • Employees must be given fourteen days to review the non-compete agreement before signing the contract.
  • Employers must advise employees in writing to consult an attorney before entering the agreement.

Proving that the non-compete agreement is reasonable is vital to ensuring that the contract is enforceable. The Illinois Supreme Court developed the “Three-Component Test" to determine the reasonability of a non-compete agreement. The three components are:

  1. Legitimate business The restrictions in the non-compete agreement protect a legitimate business interest like a trade secret or customer lists.
  2. Public hardship. The non-compete agreement cannot impose a hardship on the employee or the public.
  3. Reasonable restraint. The extent of the restrictions, like duration or geographic area, are reasonable.

Is the New Illinois Non-Compete Law Retroactive?

No. The amendments made to the Illinois Freedom to Work Act which went into effect on January 1, 2022 are not retroactive. Any non-compete agreements that were entered into prior to this date will not be effected by the amendment.

How Long Does an Illinois Non-Compete Agreement Last?

The new non-compete laws do not lay out a maximum term for the duration of the agreement. Based on previous court cases and non-compete agreements that Illinois courts have ruled reasonable, non-compete agreements can last up to five years.

Whether the duration of a non-compete agreement is deemed reasonable by the court depends heavily on the specific facts of the case. Factors that can effect whether a timeframe is reasonable include the type of work, the geographic area, the specialized training of the employee, and the business interest that is protected by the contract.

How Do You Get Around a Non-Compete Agreement in Illinois?

To get around a non-compete agreement in Illinois, the employee must show that the agreement does not adhere to the provisions in the amended Illinois Freedom to Work Act.

One way to do this, is to prove that the non-compete does not protect a legitimate business interest. Legitimate business interests are usually trade secrets, client lists, or other confidential business information that the employer takes precautions to keep confidential. The employer cannot use a non-compete to merely restrict competition in their industry.

What Voids an Illinois Non-Compete Agreement?

In Illinois, all contracts, including non-compete agreements, must adhere to state contract laws. In order for a contract to be legally binding and enforceable, it must contain an offer, acceptance, and consideration. Without any one of these elements, the contract will be void.

Consideration is the main component of a contract and it is the exchange of something of value between the parties. For non-compete agreements, many states consider ongoing employment adequate consideration for signing a non-compete. Illinois however requires more sufficient consideration.

Many Illinois courts will require that an employee is promised at least two years of tenure or additional financial consideration like a raise or a bonus to satisfy the condition of adequate consideration. Without this additional consideration, a court can deem an Illinois non-compete agreement void.

Frequently Asked Questions

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Lawyer Reviews for Illinois Noncompete Agreement Projects

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"Paul was incredibly helpful in reviewing a non-compete agreement I needed to sign. He helped me understand the key risks, identify what was worth negotiating, and prepare redlines to bring the agreement more in line with Massachusetts law. He was knowledgeable, responsive, and practical throughout the process. I would definitely work with him again."

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"Valerie was professional, quick, and precise. Will reach out to her for any future matters. Thank you."

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Contracts

Noncompete Agreement

Florida

Asked on May 19, 2023

Noncompete agreement choice of law?

I recently accepted a job offer with a new employer and they sent me a Noncompete Agreement to sign. I have some questions about the agreement, specifically related to the choice of law. My former employer and I are in different states, and I want to make sure I understand the implications of the agreement before signing.

Venus C.

Answered May 23, 2023

Congratulations on your new job. Generally, a choice of law clause contained in a non-compete agreement indicates which state law will govern the contract. By way of general example, let's pretend we have a non-compete agreement that states the choice of law is Florida. Let's also pretend the parties to this agreement had a dispute and one party filed a lawsuit against the other in the state of New York. In this pretend scenario, because the parties agreed Florida to be their choice of law for the non-compete agreement, the court in New York would abide by that contractual agreement and apply Florida law. While choice of law clauses are commonly used to indicate what law will apply to a contract, the language used or omitted plays a significant role in their interpretation and enforceability.

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Employee Rights

Noncompete Agreement

Georgia

Asked on Jul 4, 2023

How does a noncompete agreement work?

I am an employee at a small business and I have recently been asked to sign a noncompete agreement. I am not sure how these agreements work and what rights I have as an employee. I am also concerned about the restrictions that could be placed on me if I sign the agreement. I want to make sure I understand the implications of signing the agreement before I do so.

Nancy B.

Answered Aug 4, 2023

In its simplest terms, a noncompete agreement in an employment context is an agreement that says you will not compete with your former employer if you ever stop working for them. It typically forbids things like: + Working for a competitor + Starting a company that sells the same services/products as your employer + Recruiting employees from your current employer after you have left that employment. One thought is that this could be requested shortly before letting an employee go just to protect the company from competition but I hope that is not the case here as it seems like an unfair use of the noncompete agreement ability in Georgia. The issues are usually the geographical scope (for example within 15 miles of Dalton, Georgia), the time period (one or two years is usually sufficient and courts do not favor long noncompete agreements), and the consideration (such as a new job - which is not applicable in your case, or more compensation). Regards, Nancy A. Burnett

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Employment

Noncompete Agreement

Missouri

Asked on Dec 12, 2023

Could someone go to jail if they are accused of fraud for never intending to not breaching his or her non compete non solicit contract?

I am really curious when employment contract can become criminal. Is it criminal to ask you coworker to come work with you, considering if you are accused of fraud for breaching non compete non solicit?

Matthew S.

Answered Dec 16, 2023

No, this at worst is a civil matter and not a criminal matter. F

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Employee Rights

Noncompete Agreement

Washington

Asked on Jan 19, 2025

Can my employer enforce a non-compete agreement if I was laid off due to COVID-19?

Can my former employer legally enforce the non-compete agreement I signed when I was hired, considering I was recently laid off due to the economic impact of COVID-19 and the agreement seems to restrict my ability to find new employment in my field? I have been actively seeking new job opportunities in the same industry, but potential employers are hesitant to hire me due to the non-compete agreement, which restricts me from working for competitors or starting my own business in the same field for a certain period of time. I want to understand if the non-compete agreement is still valid and enforceable given the circumstances of my layoff and the current job market conditions.

Merry K.

Answered Jan 28, 2025

I'm sorry, but your question is impossible to answer without reviewing your contract and knowing more about your type of job and compensation. Be aware that terms in such agreements are often found to be non-enforceable. You can start by reviewing the Washington State law on point: https://app.leg.wa.gov/rcw/default.aspx?cite=49.62&full=true

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Employment

Noncompete Agreement

Washington

Asked on Jul 11, 2023

Noncompete agreement termination options?

I recently left my job after signing a Noncompete Agreement. I am looking for a new job, but I am concerned about the restrictions in the Noncompete Agreement and how it might affect my ability to find a new job. I am looking for advice on my options for terminating or modifying the Noncompete Agreement so that I can find a new job without having to worry about any potential legal repercussions.

Merry K.

Answered Aug 15, 2023

I am a WA State employment attorney. If you didn’t receive anything in return for signing the non-compete, it may be relatively easy to get out of it. If, however, you signed in return for something, such as a severance package, it will be challenging to get out of the agreement. However, many non-compete agreements are written overly broadly and may not be enforceable under the laws of WA and other states. You may want to consult with a WA State employment attorney for a review of the documents and law(s) of the state(s) where you may want to work or set up a business. (A WA State attorney can only provide legal advice in WA, but can help you find applicable law/case decisions for other states but without providing anything beyond information, much like a law librarian).

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