In 2016, the Illinois legislature enacted the Freedom to Work Act, which banned non-compete clauses in employment contracts with low-wage workers. This year, the legislature is considering several employee-friendly amendments to the act. Proposed changes include:
· Covenants not to compete would be unenforceable for employees earning less than $75,000 per year at the time the act takes effect. The earnings threshold increases over time.
· Covenants not to solicit would be unenforceable unless the employee’s actual or expected earnings exceed $45,000 per year.
· Covenants not to compete would be unenforceable against any employee who was terminated, furloughed, or laid off as the result of circumstances related to the COVID-19 pandemic, or under similar circumstances, unless enforcement of the covenant not to compete includes compensation equivalent to the employee’s base salary minus any mitigating earnings.
· Covenants not to compete would be unenforceable against individuals covered by a collective bargaining agreement.
· Employers would be required to provide a notice period for contracts including covenants not to compete or covenants not to solicit.
The amendments are set to take effect on January 1, 2022 and would not apply to any contracts made before that date.
If you have questions about how the Freedom to Work Act affects you, contact us for a free, 30-minute consultation with an employment attorney.