Following a national trend that we previously posted about, Illinois recently passed legislation to further restrict the use of non-compete agreements against low-wage workers. Under the previous version of the Illinois Freedom to Work Act, employers were prohibited from entering into non-compete agreements with employees making less than $13 per hour. The new version expands this restriction to include employees earning $75,000 or less and defines “earnings” to include salary, bonus, and other forms of taxable income. In addition, the amendment prohibits employers from entering into non-solicitation agreements with employees making $45,000 or less annually.
The amendment also expands protections for employees who continue to be subject to non-compete and non-solicitation agreements. For example, employers are now obligated to advise employees in writing to consult an attorney before signing an agreement and employees must have at least 14 days to review the agreement. In the event that an employee prevails in an enforcement action brought by an employer, the employee is entitled to attorneys’ fees, costs, and other damages under a fee-shifting provision.
Finally, the amendment does not prohibit the use of confidentiality agreements or agreements prohibiting the use or disclosure of trade secrets. But the amended law, as well as similar laws in other states, serves as a reminder to employers to implement a comprehensive strategy to protect trade secrets and other confidential information that does not solely rely on non-compete agreements.