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Client Alert: Your Illinois Restrictive Covenants May Soon Be Unenforceable

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At the close of the recent legislative session on May 31, 2021, Illinois legislators passed Senate Bill 672, which contains significant new restrictions on the use of non-competition and non-solicitation agreements in Illinois. It is expected that Governor Pritzker will sign this legislation in a matter of weeks.

Non-competition and non-solicitation agreements are a common, key method of protecting a company’s legitimate business interests upon an employee’s departure. Illinois has not gone so far as some other states in declaring these wholly unenforceable, but newly adopted amendments to the Illinois Freedom to Work Act continue a recent trend of stiffening requirements and curtailing use.

Below are the highlights of the legislation:

Note that these compensation-based restrictions are in addition to an existing ban on non-competition restrictions for employees earning the legal minimum wage or less than $13.00 per hour (whichever is greater).

We Can Help You

Barack Ferrazzano’s Compensation & Employment and Commercial Competition Groups have decades of experience in counseling companies and litigating disputes about restrictive covenants and employee competition matters, as well as helping companies navigate the maze of employment law compliance. Please contact us if you would like to discuss specific questions about your restrictive covenants or review of your agreements and practices, or if we can otherwise be of assistance.


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