Non-competition agreements, also known as restrictive covenants, are becoming an increasingly common part of employment contracts in Illinois. These agreements are designed to protect employers by restricting the ability of their employees to work for competitors after leaving their current job. While these agreements can be beneficial for employers, they can also be a source of controversy and legal disputes.
In Illinois, non-competition agreements are governed by the Illinois Freedom to Work Act (IFWA). Enacted in 2017, the IFWA contains several provisions aimed at protecting workers from being unfairly restricted in their employment options. Under the IFWA, non-competition agreements are not enforceable against low-wage employees, defined as those making less than $13 per hour. Additionally, non-competition agreements must be reasonable in terms of geographic scope and duration.
To be considered reasonable, a non-competition agreement must be narrowly tailored to protect the legitimate business interests of the employer. The agreement must also not unduly burden the employee’s ability to find work in their chosen field. This means that a non-competition agreement that restricts an employee from working in an entire industry or in a wide geographic area is unlikely to be enforceable.
Non-competition agreements can also be challenged on the basis of consideration. To be enforceable, a non-competition agreement must be supported by adequate consideration. This means that the employee must receive something of value in exchange for agreeing to the restrictions. In many cases, the job itself may be considered adequate consideration. However, in some cases, additional compensation or benefits may need to be provided.
Finally, non-competition agreements may be unenforceable if they are deemed to be against public policy. For example, an agreement that restricts a doctor from practicing medicine in a particular area may be considered against public policy if it limits access to healthcare for patients in that area.
In conclusion, non-competition agreements are a complex area of employment law in Illinois. While they can provide employers with important protections, they must be carefully drafted in order to be enforceable. If you are considering entering into a non-competition agreement, it is important to consult with an experienced employment law attorney to ensure that the agreement is reasonable and enforceable.