Effective September 1, 2026, Illinois employers must ensure that any non-compete and non-solicitation agreements they use comply with the Freedom to Work Act, as amended. Employers who have not yet audited their restrictive covenant practices face significant legal exposure. This alert summarizes the key requirements and identifies the steps employers should take now.
What the Law Requires
The amended Freedom to Work Act imposes several mandatory conditions on enforceable non-compete and non-solicitation agreements in Illinois:
Salary thresholds. Non-compete agreements are enforceable only against employees earning more than $75,000 per year. Non-solicitation agreements (covering customers and co-workers) require the employee to earn more than $45,000 per year.
Adequate consideration. The Act specifies that continued employment alone does not constitute adequate consideration for a new restrictive covenant. Employers must provide something beyond the promise of continued employment—such as a signing bonus, additional compensation, access to confidential information, or specialized training—when asking a current employee to sign a new agreement.
Attorney consultation notice. Before the employee signs, the employer must advise the employee in writing to consult with an attorney and must provide at least 14 calendar days to review the agreement.
Nexus to a legitimate business interest. An agreement is enforceable only if it is narrowly tailored to protect a legitimate business interest, including trade secrets, confidential information, or a near-permanent customer relationship.
What Employers Must Do Before September 1
Audit existing agreements. Identify every non-compete and non-solicitation agreement in your workforce. Confirm that each applies only to employees who meet the applicable salary threshold.
Review your consideration practices. If your standard practice is to present restrictive covenants to employees after the hire date without additional consideration, revise that process immediately.
Update your template agreements. Ensure every template includes the required attorney-consultation language and provides at least 14 days for review.
Assess geographic and temporal scope. Agreements that are overbroad in duration or geographic reach remain unenforceable under Illinois law. Courts will not rewrite an unreasonable covenant; they will void it.
Train HR and recruiting teams. Those responsible for onboarding must understand what they can and cannot require of new and existing employees.
Enforcement Risk
The Illinois Attorney General has authority to bring enforcement actions against employers who use non-compliant agreements. Individual employees can also challenge unenforceable agreements, and courts have awarded attorney’s fees in appropriate cases.
Employers with questions about their restrictive covenant programs should contact Rowe, Mercer & Hale’s employment litigation team promptly.