You work for the same company for a few years and you would like a change of scenery. You want to stay in the same field though and so you apply to jobs that may be viewed as competitors for your current company. Your employer comes in saying that you cannot do this due to a non-compete agreement in your contract. What is a non-compete agreement and what does Illinois have to say about it?
What is a non-compete agreement?
A non-compete agreement is a contractual agreement that states that an employee cannot work for a competitor of their previous company for a set amount of time and a set geographic area. The times and areas tend to vary based on industry. Non-competes are often written into an employee’s initial employment contract.
What new legislation was enacted by Illinois?
In Illinois, for years, lawyers looked to general contract law and a case called Fifield v. Premier Dealer Services for guidance on the validity of a non-compete. The Appellate Court in Fifield ruled, among other things, that non-competes were not enforceable if the employee worked less than two years for his/her employer. Since neither the Illinois Legislature nor the Illinois Supreme Court addressed the Appellate Court’s conclusions in Fifield, the case’s enforceability remained a matter of debate.
Recently, the state enacted new laws that address Fifield and the enforceability of non-competes. Governor Pritzker signed Public Act 102-0358, also called the Illinois Freedom to Work Act (https://www.ilga.gov/legislation/ilcs/ilcs3.asp?ActID=3737&ChapterID=68) which now puts more restrictions on non-compete agreements and who they affect. From now on, these agreements can only be used on employees who make $75,000 and more. The act comes into effect in 2022, and every five years after, the threshold will increase by $5,000. If a non-compete is used in a contract, the employer must inform the employee two weeks before they start working for the company. And so, non-competes are prohibited for any employee making less than $75,000 (or $45,000 in non-solicit agreements).
The Legislature took the added measure of codifying Fifield. Thus, if an employee works less than 2 years, the non-compete is unenforceable. Read further at https://www.natlawreview.com/article/illinois-governor-signs-non-compete-legislation.
If you have faced mistreatment by your employer in regards to a non-compete agreement, go to cramer-law.com for more.
