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Non-Compete Clauses in Illinois

Posted on in Business Law

non-compete clauses, low-wage employee, non-compete agreements, nondisclosure agreement, Arlington Heights business law attorneysOn August 19, 2016, Illinois state Governor Bruce Rauner signed a bill into law referred to as the Illinois Freedom to Work Act. The law took effect on January 1, 2017—a law which will notably impact the private business sector.

Is a Non-Compete Clause Enforceable?

It is common for private business owners to require their employees sign and adhere to non-compete agreements. However, the Illinois Freedom to Work Act specifically prohibits a business owner from entering into a contract that denies a low-wage employee the ability to find employment elsewhere that competes with his or her current company.

The law recognizes these kinds of contracts as a covenant not to compete. The legal definition of what constitutes a covenant is fairly broad. Types of agreements that fall within the parameters of the new law include:

  • A prohibition specific to a period of time of engaging in work for another employer;
  • A restriction from working in a particular geographical location; and
  • A revocation of a low-wage employee’s right to engage in the same kind of work for another employer included in the language of the agreement.

The broad language in the new law makes it imperative that you enlist the help of a Cook County business lawyer who can assist you in drafting your non-compete agreement so that it conforms with the new law. Only agreements entered into after this new law went into effect are subject to the new provisions.

What is a Low-Wage Employee?

According to the new law, a low-wage employee is defined as an employee whose income is the greater of the hourly rate equal to the minimum wage demanded by federal, state, or local minimum wage law, or an employee earning $13 an hour.

Despite Illinois lawmakers attempts to drastically impede the enforceability of a non-compete clause, there are still other ways in which a business owner can protect his or her interest. For example, a nondisclosure agreement may serve the same purpose as a non-compete agreement if the intention is to safeguard your company's intellectual property. A court is more likely to enforce an agreement that is fair, plausible, and limited in scope.

Illinois Business Law Professionals

If you are considering starting a business and need knowledgeable and experienced legal guidance, the Arlington Heights business law attorneys at A. Traub & Associates can help guide you through your business needs. Our firm represents businesses who are seeking to enforce contracts, draft contracts, as well as a litany of other business law related matters. We have three offices located around the greater Chicagoland area. Contact us today at 847-749-4182 or visit www.business.atclaw.com.

Source:

http://www.ilga.gov/legislation/publicacts/fulltext.asp?Name=099-0860

Illinois State Bar Association DuPage County Bar Association Northwest Suburban Bar Association American Inns of Court DuPage Association of Woman Lawyers National Association of Woman Business Owners Illinois Association Criminal Defense Lawyers DuPage County Criminal Defense Lawyers Association
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