As state and federal courts in Illinois continue to wrestle with enforcing post-employment, non-compete agreements and other restrictive covenants, such as non-solicitation and confidentiality agreements, definitive action on these common employment agreements recently came from an unlikely source – the state legislature. On August 19, 2016, Illinois Governor Bruce Rauner signed into law the Illinois Freedom To Work Act. The Illinois Freedom To Work Act declares all “covenant[s] not to compete” entered into between an employer and “low-wage employee” as illegal and void. The statute went into effect on January 1, 2017, in the wake Illinois Attorney General’s 2016 lawsuit against the sandwich company, Jimmy John’s, concerning Jimmy John’s alleged practice of forcing its restaurant workers to sign non-competes.
Given the Illinois Freedom To Work Act’s limited reach concerning “low-wage employees,” or those employees making less than $13.00 per hour, the impact of the statute will not likely be far reaching. However, questions exist as to whether the statute has any impact on the use of non-solicitation and confidentiality agreements. Ultimately, the statute could signal a pro-employee shift in the state of Illinois toward further limitations on the use of non-competes or an eventual end to restrictive covenants in Illinois. As the rules surrounding non-compete agreements continue to evolve in Illinois following high profile court rulings in Fifield v. Premier Dealer Services and Reliable Fire Equipment Company v. Arredondo, employers and employees alike should scrutinize their restrictive covenants to ensure compliance based on the current playing field as well as with an eye toward the continued evolution of restrictive covenants in Illinois. Most notably, non-competes and other restrictive covenants must be supported by adequate consideration and intended to protect an employer’s legitimate business interest.
The lawyers at Griffin | Williams LLP are experienced in drafting and reviewing all types of restrictive covenants as well as in litigating issues concerning their enforcement. If you are an employer with questions concerning the enforceabilty of your business’s existing agreements or an employee evaluating your legal rights in the face of a non-compete, feel free to contact our team for a free consultation.