Non-compete clauses are a common part of various types of contracts, such as employment contracts or severance agreements. A non-compete clause typically states that a person will not work in a certain industry, for specific employers, and/or within a particular geographic region for a set amount of time. In Illinois, there may be limited circumstances in which this type of clause will be enforced, and the Illinois courts heavily scrutinize non-compete agreements.
If you want to include a non-compete clause in a contract, it is imperative that you meet with an Illinois employment law attorney who can draft the agreement for you. An experienced attorney can help you ensure that your contracts will be enforceable in any contract disputes.
Non-Compete Agreements and Low Wage Employees
As of January 2017, per the Illinois Freedom to Work Act, employers cannot prepare a non-compete clause in connection with someone deemed to be a low-wage employee. The state defines low-wage employees as people who earn the greater of $13.00 per hour or the hourly wage equal to the minimum wage that the applicable federal, state, or local minimum wage guidelines set forth. Because the minimum federal, state, and local wage is lower than $13.00, the Illinois Freedom to Work Act would be applicable to employees who make less than $13.00 an hour.
Any non-compete agreements entered into after January 1, 2017 are void and illegal if they try to restrict a low-wage employee from engaging in:
- Any work in a specified geographical region;
- Any work for another employer for a specific amount of time; or
- Work for a different employer that is like the employee’s current work.
If you have a low-wage employee who entered into a non-compete clause before January 1, 2017, it may still be enforceable in some cases.
Enforcing Non-Compete Agreements
For employees who do not fall under the low-wage criteria, there may be situations in which a non-compete clause will be enforced. The restrictions in this type of clause cannot be too far-reaching, and they cannot extend for too long of a period. The courts will consider reasonable agreements, and one is reasonable only if it does not create undue hardship on the employee, it is not greater than what is required to protect the legitimate business interests of the employer, and it is not injurious to the public.
The main reason the courts will not enforce a particular non-compete agreement is because it demands too much. It may be possible to restrict an employee from working in a position that could compromise a company’s trade secrets, but an employer cannot ask an employee to not work for the industry as a whole. An employer may try to enforce a geographical clause within a specific region, but the court will likely not enforce a clause that states that an employee cannot work for anyone else in the United States.
Contact an Illinois Business Law Attorney
If you need assistance drafting a non-compete clause or having one enforced, contact the team of experienced DuPage County business law attorneys at Momkus, LLC at 630-434-0400 to schedule an initial consultation. Let one of our skilled business lawyers help draft your non-compete agreement to ensure it has the best possible chance of being upheld in court.
Sources:
https://m.acc.com/chapters/chic/upload/2018-04-Non-Compete-Laws-Illinois.pdf
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