User:Shawn Sullivan Depaul/Non-compete clause

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Before January 1, 2021, the Illinois Freedom to Work Act prohibited employers from entering into a covenant not to compete with Illinois employees earning the greater of (1) the hourly rate equal to the minimum wage required by the applicable federal, State, or local minimum wage law or (2) $13.00 per hour.

The Illinois legislature passed an amendment to the Illinois Freedom to Work Act in 2021, that will take effect on January 1, 2022, which prohibits employers from entering into a non-compete agreement with an employee unless the employee earns over $75,000 per year.

The law codified the Illinois common law conditions that the non-compete agreement must (1) be reasonably necessary to protect the legitimate business interest of the employer, (2) be ancillary to a relationship or valid contract, and (3) be reasonably supported by adequate consideration. .

One legitimate business interest that Illinois law protects is long-term relationships between a business and its customers.

Additionally, the law further codified the common law concerning non-compete agreements in that (1) a non-compete covenant must be no greater than is required for the protection of a legitimate business interest of the employer, (2) the non-compete covenant must not impose an undue hardship on the employee, and (3) the non-compete covenant must not be injurious to the public.

Further, in order for a non-compete agreement to be enforceable, the employer must advise the employee in writing to consult with an attorney before entering into the non-compete agreement and the employer must provide the employee with a copy of the covenant at least 14 calendar days before the commencement of the employee's employment or the employer.

The Illinois Attorney General may initiation or intervene in a civil action in the name of the people of the state of Illinois if it believes that an employer is engaged in a pattern and practice prohibited by the Illinois Freedom to Work Act.

If an employer includes a choice of law provision in an Illinois employee’s employment agreement, the court will still apply Illinois law as to the covenant not to compete.