On May 31, 2021, the Illinois legislature unanimously passed Senate Bill 672, which, if signed by Governor Pritzker, would significantly reform the Illinois landscape governing non-competition and non-solicitation agreements. The bill, which takes effect January 1, 2022, is expected to be signed by the Governor.
Here are some key takeaways:
Employers cannot enter into enforceable non-compete agreements with Illinois employees who have expected earnings less than $75,000.
Employers cannot enter into enforceable customer/employee non-solicitation agreements with Illinois employees who have expected earnings of less than $45,000.
The non-competition/non-solicitation agreement would have to satisfy an employer’s legitimate business interest.
The non-competition/non-solicitation agreement must be supported by independent, adequate consideration.
Employers would be required to provide Illinois employees 14 days to review a non-competition/non-solicitation agreement and advise them in writing at the same time to consult an attorney before signing it.
The non-competition/non-solicitation agreement would be subject to judicial reformation.
If Governor Pritzker signs this bill as expected, it would not be retroactive. Employers should consider whether to implement any non-competition/non-solicitation agreement for Illinois employees in advance of January 1, 2022, and also review any current form agreements to conform to Illinois law when the law takes effect.
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