Illinois has adopted a new statute called the Illinois Freedom to Work Act. The statute prohibits private sector employers from entering into non-compete agreements, which the law defines as a “covenant not to compete,” with low wage employees. It defines a low wage employee as someone who earns the greater of (i) the minimum wage, as set by federal, state or local law, or (ii) $13.00 per hour. A “covenant not to compete” is defined as an agreement between an employer and a low wage employee that restricts the employee from performing any work for another employer for a specified period of time, in a specified geographical area, or that is similar to the work he/she performs for the employer.
The new law becomes effective on January 1, 2017. It only applies to non-compete agreements that are entered into after that date.
The Illinois Freedom to Work Act does not mention agreements providing for the protection of confidential information or trade secrets. As a result, those agreements remain valid and enforceable, for all employees.
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