Non compete
The Myth of Non-Compete Agreements in Illinois: Why They Don’t Hold Water
In the world of employment contracts, non-compete agreements have long been used by employers to prevent employees from jumping ship to a competitor. But in Illinois, the legal landscape surrounding non-competes has changed significantly, making them much weaker than many employers realize.
If you’ve ever been asked to sign a non-compete in Illinois, or if you’re an employer trying to enforce one, you need to understand why these agreements often don’t hold water.
Illinois' Shift on Non-Competes
Illinois has been cracking down on non-compete agreements for years, and the most significant shift came with the Illinois Freedom to Work Act and subsequent amendments to the Illinois Wage Payment and Collection Act. These laws have made it increasingly difficult for employers to enforce restrictive covenants against employees, particularly those earning lower wages.
Under the Freedom to Work Act, as of January 1, 2022, employers cannot enforce non-competes on employees earning less than $75,000 per year. That threshold will increase over time:
$80,000 by 2027
$85,000 by 2032
$90,000 by 2037
For non-solicitation agreements (which prevent employees from poaching clients or employees), the salary threshold is even lower at $45,000 per year, increasing similarly over time.
Why Non-Competes Fail in Illinois
Even when a non-compete is applied to someone earning above the salary threshold, it still has to meet strict legal tests to be considered enforceable. Courts in Illinois typically throw out non-compete agreements for the following reasons:
- Lack of Legitimate Business Interest
A company must prove that enforcing a non-compete is necessary to protect a legitimate business interest, not just to prevent competition. Factors considered include:
Trade Secrets or Confidential Information: If the employee didn’t have access to proprietary trade secrets, the non-compete is usually invalid.
Customer Relationships: If the employee wasn’t the face of the company to customers, a non-compete likely won’t hold.
Specialized Training: If an employee didn’t receive unique training that gives them an unfair advantage, courts won’t enforce a restriction.
- Overly Broad Restrictions
Illinois courts have struck down non-competes that are too broad in either duration, geography, or industry scope. For example:
A five-year restriction? Unreasonable. Courts generally won’t enforce anything beyond two years.
A statewide or nationwide restriction? Unless the company operates on that scale and the employee had access to sensitive data, it won’t hold up.
A ban on working in an entire industry? Overly restrictive and likely unenforceable.
- Lack of Consideration (a.k.a. What's in It for the Employee?)
For a non-compete to be valid in Illinois, the employee must receive something of value in exchange for signing it. Courts have consistently ruled that mere employment is not enough unless:
The employee worked for at least two years after signing the agreement or
They received something extra, such as a bonus, promotion, stock options, or other tangible benefits
If the only thing the employee got in exchange was “continued employment” and they were let go a year later, the non-compete is likely unenforceable.
Illinois Supreme Court & Recent Cases
Illinois courts have a history of siding with employees when it comes to non-competes. Some notable cases that shaped the landscape include:
Fifield v. Premier Dealer Services, Inc. (2013) – Established the “two-year rule”, meaning an employee must stay employed for at least two years for a non-compete to be enforceable.
Reliance Fire Equipment Co. v. Arredondo (2021) – Reaffirmed that protecting a business from ordinary competition is not a legitimate business interest.
Illinois Attorney General vs. Jimmy John’s (2016) – Jimmy John’s was forced to drop non-compete clauses for low-wage sandwich makers after the Attorney General ruled them abusive and unenforceable.
What This Means for Employees and Employers
Employees: You Probably Don’t Have to Worry
If you signed a non-compete in Illinois and you’re worried about switching jobs, it probably won’t hold up in court—especially if you earn under $75,000 per year. Even if you make more, there’s a strong chance a court would rule the agreement invalid due to overbroad restrictions, lack of consideration, or a lack of legitimate business interest.
If your employer tries to enforce a non-compete, consider consulting a labor attorney. Most non-competes in Illinois fall apart under legal scrutiny.
Employers: Be Careful What You Try to Enforce
If you’re an employer relying on non-compete agreements to keep employees from jumping ship, you need to rethink your strategy. Illinois has made it clear that non-competes aren’t a reliable tool unless they meet strict requirements. Instead of wasting time trying to enforce an invalid agreement, consider:
Strengthening confidentiality agreements (which are more enforceable)
Building employee loyalty with better pay and work culture
Creating incentives like stock options or bonuses to retain talent
Final Thoughts
Illinois has made it clear that non-compete agreements don’t hold water unless they meet a very narrow set of legal conditions. If you’re an employee worried about a non-compete, odds are it won’t stand up in court. And if you’re an employer relying on non-competes, you may need to find better ways to retain talent.
In today’s job market, employees have more freedom than ever to move on to better opportunities—and Illinois law is on their side.
