Illinois has a new non-compete statute that bans the use of non-compete agreements with “low-wage” employees.
Peter Bulmer in our Chicago office has written this article on the Jackson Lewis website analyzing the new law, which takes effect January 1, 2017, and explaining the context which led to its enactment: Illinois Freedom to Work Act: One State’s Reaction to Overreaching Non-Compete Agreements.
As the article’s title suggests, this new law in Illinois is the latest effort to limit the use of non-competition agreements stemming from the perception that there is widespread overuse of such agreements by employers. The Illinois Attorney General, the New York Attorney General, the Treasury Department, and the White House have been active in this area. Of course, courts around the country for years have been carefully applying their state’s rule of reasonableness to determine whether non-competition agreements should be enforced. In Illinois, for workers earning less than $13.00 an hour, the courts will not have the opportunity to assess the reasonableness of a non-competition agreement.
The debate regarding these issues is certain to continue.