On August 13, 2021, Illinois Governor J.B. Pritzker signed into law an amendment to the Illinois Freedom to Work Act (820 ILCS § 90), which imposes restrictions on the use of non-competition and non-solicitation (employee and customer) restrictive covenants for Illinois employees. The law takes effect on January 1, 2022, and only applies to restrictive covenants entered into after January 1, 2022.

Below are some of the key provisions of the law:

  • The law prohibits employers from entering into non-competition agreements with employees who earn $75,000 per year or less and also prohibits employers from entering into non-solicit agreements with employees who earn $45,000 per year or less.
  • For non-compete agreements, the salary threshold amounts will increase every five years by $5,000 until January 1, 2037, when the amount will equal $90,000.  For non-solicit agreements, the salary threshold amounts will increase every five years by $2,500 until January 1, 2037, when the amount will equal $52,500.
  • Employers will now be required to advise employees to consult with an attorney before entering into a non-compete or non-solicit agreement and must also provide employees at least 14 days to review the agreement and decide whether to sign. Employees have the option of signing the agreement before the 14-day period has ended.
  • Employers are prohibited from entering into restrictive covenants with employees who have lost their jobs due to the COVID-19 pandemic or under circumstances that are similar to the COVID-19 pandemic unless enforcement of the covenant not to compete includes compensation equivalent to the employee’s base salary at the time of termination for the period of enforcement minus compensation earned though subsequent employment during the period of enforcement.
  • If an employee prevails on a claim filed by an employer seeking to enforce a covenant not to compete or a covenant not to solicit, the employee can recover all costs and reasonable attorney’s fees from the employer regarding such claim. A court or arbitrator may also award appropriate relief.

Illinois employers should revisit their restrictive covenant agreements in light of these changes.

Photo of Steven J. Pearlman Steven J. Pearlman

Steven J. Pearlman is a partner in the Labor & Employment Law Department and co-head of the firm’s Whistleblowing & Retaliation Group. Steven’s practice focuses on defending complex employment litigation involving claims of discrimination, harassment and retaliation; wage-and-hour laws; breach of employment contract…

Steven J. Pearlman is a partner in the Labor & Employment Law Department and co-head of the firm’s Whistleblowing & Retaliation Group. Steven’s practice focuses on defending complex employment litigation involving claims of discrimination, harassment and retaliation; wage-and-hour laws; breach of employment contract; and restrictive covenants (e.g., non-competition agreements). Steven is also at the forefront of defending whistleblower retaliation claims, and routinely conducts investigations arising from whistleblower reports. He has successfully tried cases to verdict in Illinois, Florida and California, and defended what is reported to be the largest Illinois-only class action in the history of the U.S. District Court for the Northern District of Illinois. He has also testified in defense of his investigations in federal court.

Photo of Edward Young Edward Young

Edward “Eddie” C. Young is a senior counsel in the Labor & Employment Law Department and a member of the following Firm practice groups: Restrictive Covenants & Trade Secrets; Discrimination, Harassment & Title VII; and Whistleblowing & Retaliation.

Eddie represents employers in all…

Edward “Eddie” C. Young is a senior counsel in the Labor & Employment Law Department and a member of the following Firm practice groups: Restrictive Covenants & Trade Secrets; Discrimination, Harassment & Title VII; and Whistleblowing & Retaliation.

Eddie represents employers in all aspects of employment law, with a concentration on litigating complex employment disputes of all types before federal and state courts throughout the country, the U.S. Equal Employment Opportunity Commission, state and local human rights commissions and arbitral tribunals (e.g., FINRA and AAA).  In particular, Eddie has successfully litigated employment-related disputes alleging breach of non-compete agreements, theft of trade secrets, discrimination, sexual harassment, whistleblower retaliation, wage and hour violations, including employee misclassification claims, breach of contract, defamation, fraud and other business-related torts.  Eddie has obtained a world-wide injunction to enforce a client’s non-competition restriction on a former executive, successfully defended a client through summary judgment and appeal against retaliation claims brought by a former General Counsel, represented Fortune 500 companies in defense of high-profile harassment claims associated with the #metoo movement, and provided representation to several professional sports leagues.  He also has significant appellate experience, including successfully representing clients before the U.S. Circuit Court of Appeals for the First, Second and Seventh Circuits, as well as before the United States Supreme Court.  Eddie often draws on his litigation experience to help clients avoid the courtroom by effectuating positive change in the workplace through impactful training, counseling and developing robust employment policies.

Working in a wide range of industries, Eddie represented clients in food services, financial services, medical devices, telecommunications, higher education, sports, retail, real estate and others.

Eddie has been recognized as “One to Watch” by Best Lawyers in America since 2021 and as a “Rising Star” by Super Lawyers since 2017. He also regularly advises clients, writes and speaks on cutting-edge legal issues, including the use of Artificial Intelligence in the workplace, and legal issues arising from the collection and use of employee biometric information.

Eddie maintains an active pro bono practice, including on-going representation of a certified class of approximately 65,000 visually disabled Chicagoans in litigation challenging the City’s lack of accessible pedestrian crosswalks.  Eddie is also a member of the Firm’s Pro-Bono Committee and is a three-time recipient of the Firm’s “Golden Gavel” award for his significant pro bono contributions.

Prior to joining Proskauer, Eddie was a cum laude graduate from Loyola University Chicago School of Law. He also obtained a Master’s Degree in Human Resources and Industrial Relations from Loyola University Chicago Graduate School of Business. He began his practice at a national management-side employment law firm, and has also worked in the corporate human resources department of a national tax consulting firm and as a Fellow with the Illinois Human Rights Commission.

Photo of Dakota D. Treece Dakota D. Treece

Dakota earned her J.D. from DePaul University College of Law, where she was an Associate Editor for the DePaul Law Review and a teaching assistant for a constitutional law course and DePaul’s Academic Success Program. While at DePaul, she worked as a law…

Dakota earned her J.D. from DePaul University College of Law, where she was an Associate Editor for the DePaul Law Review and a teaching assistant for a constitutional law course and DePaul’s Academic Success Program. While at DePaul, she worked as a law clerk at a labor union and as a student attorney in the Misdemeanor Clinic. Dakota received the Dean’s Certificate of Service for her volunteer efforts while in law school and was awarded the highest overall grade in her labor law course.