Allowed above a pay floor

Non-compete law in Illinois

Under the Illinois Freedom to Work Act (820 ILCS 90), a noncompete is void unless the employee's actual or expected annualized earnings exceed $75,000 (a non-solicitation covenant: $45,000), the employer advised the employee in writing to consult a lawyer and gave 14 calendar days to review, and the covenant is supported by adequate consideration, ancillary to employment, no broader than needed for a legitimate business interest, not unduly hard on the employee and not injurious to the public. Both thresholds step up by statute on 2027-01-01 (to $80,000 and $47,500). Covenants are void for construction workers (with a management/sales carve-out) and for employees under certain public-sector collective bargaining agreements, and cannot be enforced against licensed mental health professionals serving veterans and first responders where that raises cost or difficulty of access.

Last verified · confidence medium. Clauseworthy is not a law firm and does not give legal advice.

From January 1, 2027, an enacted change applies: allowed above a pay floor.

Earnings thresholds rise to $80,000 (covenant not to compete) and $47,500 (covenant not to solicit); further steps to $85,000/$50,000 on 2032-01-01 and $90,000/$52,500 on 2037-01-01. Source

Employee non-competes
Only within the statute's conditions
Pay floor
$75,000 a year in 2026, adjusted scheduled statutory step-ups (not indexed): $80,000 on 2027-01-01, $85,000 on 2032-01-01, $90,000 on 2037-01-01
How pay is measured
Actual or expected annualized rate of earnings must exceed the amount (820 ILCS 90/10(a)); 'earnings' = W-2 box 1 compensation plus elective deferrals (820 ILCS 90/5)
Duration
No statutory cap on duration; the covenant must be no greater than required to protect a legitimate business interest of the employer (820 ILCS 90/15(3)).
Notice
Void unless the employer (1) advises the employee in writing to consult an attorney before signing and (2) gives the employee a copy at least 14 calendar days before employment starts or at least 14 calendar days to review it; signing earlier voluntarily is allowed (820 ILCS 90/20).
Consideration
Employee must receive 'adequate consideration': either at least 2 years of employment after signing, or other professional or financial benefits adequate by themselves or in addition to a period of employment (820 ILCS 90/5, 90/15(1)).
Pay during the restriction
No covenant may be entered with an employee terminated, furloughed or laid off for COVID-19-pandemic-type business circumstances unless enforcement includes pay equal to base salary at termination for the enforcement period minus subsequent earnings (820 ILCS 90/10(c)).

Exceptions and special rules

  • Sale of a business: the statute allows a non-compete given by a seller.
  • 'Covenant not to compete' excludes agreements by a person purchasing or selling the goodwill of a business or otherwise acquiring or disposing of an ownership interest (820 ILCS 90/5)
  • Also excluded from the definition: non-solicitation covenants, confidentiality agreements, trade-secret/invention agreements, invention assignment, paid advance-notice-of-termination clauses, and agreements not to reapply to the same employer (820 ILCS 90/5)
  • Employers exclude governmental and quasi-governmental bodies (820 ILCS 90/5)
  • Construction. Covenants not to compete and not to solicit are void and illegal for individuals employed in construction, whether or not covered by a collective bargaining agreement; does not apply to construction employees who primarily perform management, engineering/architectural, design or sales functions or who are shareholders, partners or owners. (820 ILCS 90/10(e))
  • Employees covered by a collective bargaining agreement under the Illinois Public Labor Relations Act or Illinois Educational Labor Relations Act. Covenant not to compete is void and illegal. (820 ILCS 90/10(d))
  • Licensed mental health professionals (clinical psychologists, clinical social workers, marriage and family therapists, nurses, professional counselors) serving veterans and first responders. A covenant not to compete or not to solicit entered into after 2025-01-01 is not enforceable as to mental health services to veterans and first responders if enforcement is likely to increase cost or difficulty of access for them. (820 ILCS 90/10(f))
  • Nurses and certified nurse aides employed, assigned or referred by a nurse agency to a health care facility. A covenant not to compete between a nurse agency and a nurse or certified nurse aide placed on a temporary basis, entered into on or after 2022-07-01, is illegal and void; the agency also may not charge conversion, buy-out or similar fees if a temporary worker is hired permanently. For long-term placements, a covenant is permitted until 2027-12-31 if its term is concurrent with the initial employment, assignment or referral. (Text read from an official-page archive copy dated 2025-03-06; later amendments not excluded.) (225 ILCS 510/14(g), (g-5) (P.A. 102-946, eff. 2022-07-01; P.A. 102-1124, eff. 2023-02-03))

Non-solicitation clauses

Covered by the same Act: a 'covenant not to solicit' (employer's employees, clients, prospective clients, vendors, suppliers or other business relationships) is void unless the employee's earnings exceed $45,000 ($47,500 from 2027-01-01) and the Sec. 15 and Sec. 20 conditions are met; also void for construction employees (820 ILCS 90/5, 10(b), 10(e), 15, 20).

Contracts naming another state's law

The Act contains no choice-of-law or forum provision.

Remedies

If an employee prevails on a claim to enforce a covenant, the employer pays the employee's costs and reasonable attorney's fees (820 ILCS 90/25). The Attorney General may sue for a pattern or practice and seek damages, restitution, injunctions and civil penalties up to $5,000 per violation or $10,000 per repeat violation within 5 years, each affected person counting separately (820 ILCS 90/30). Courts may, but need not, reform or sever overbroad covenants; extensive reformation may be against public policy (820 ILCS 90/35).

Which agreements it covers

Covenants entered into after the effective date of P.A. 102-358 (2022-01-01) (820 ILCS 90/5 definitions); subsection (f) (mental health services) applies to covenants entered into after 2025-01-01. Each threshold step-up governs covenants entered into on or after its date (820 ILCS 90/10(a)-(b) 'no employer shall enter into').

Independent contractors

Not expressly addressed; 'employee' means any individual permitted to work by an employer in an occupation (820 ILCS 90/5).

Recent changes

  • 2026-04-17. No 2026 bill amending the Freedom to Work Act advanced past the House. HB 4565 (health care professionals) was reported 'Do Pass as Amended' 18-9 by the Labor & Commerce Committee on 2026-03-19 and held on second reading; it and HB 3213 (ban on noncompetes and non-solicits) were re-referred to the Rules Committee under Rule 19(a) on 2026-04-17. HB 4221 (health care professionals) and HB 1642 ($300,000 floor) were re-referred on 2026-03-27. The bill-status pages captured 2026-10-14 show no later action. Not law. Source
  • 2025-08-15. P.A. 104-417 (SB 2394), a revisory act 'combining multiple enactments and making technical corrections', restated Sec. 10; no new substantive rule identified. Source
  • 2025-01-01. P.A. 103-915 added the mental-health-services limit for veterans and first responders (subsection (f); the text itself ties it to the effective date of P.A. 103-915, 2025-01-01). Source
  • 2025-01-01. P.A. 103-921 (SB 2770, enrolled) amended Sec. 10 (subsections (d)/(e) wording, construction and collective-bargaining voids); effective date taken from the Sec. 10 source note (eff. 1-1-25). The plain-text enrolled act does not show which words were struck, so this entry describes the touched subsections only. Source

Primary sources

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What the statute says for these facts

Four facts. The answer leads with what the statute does at that pay, then names any change already enacted, then quotes the details with their citations.

The person who would sign

Several statutes treat contractors differently.

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