Federal & State Regulations | Non-compete agreements - Illinois

State Info

Summary of differences between federal and state regulations

Whether or not a non-compete agreement is a legal and binding contract depends on the scope of the restrictions the agreement includes, precedents set in court decisions, and a variety of other factors.

Some state courts have found that non-compete agreements are enforceable only if someone sells a business and agrees not to compete with the new owner. Typically courts do not want to deprive employees of earning a living in their chosen fields, but they also want to protect companies. So, a non-compete agreement might be enforceable, but only if it is reasonable in scope and necessary to protect the company's interests.

Illinois’ Freedom to Work Act does specify that employees who earn $13/hour or less and who are not government employees may not be required to enter into noncompete agreements with employers. Such agreements are defined as those which restrict these “low-wage” employees from performing (1) any work for another employer for a specified period of time, (2) any work in a specified geographic area, or (3) work for another employer that is similar to the work the employee performs for the employer that is a party to the noncompete.