Restrictive Covenants: Illinois’ Amended Freedom to Work Act has Serious Impact on Responsibilities of Both Employers and Employees

Effective January 1, 2022, amendments to the Illinois Freedom to Work Act significantly restrict the use of employee restrictive covenants. The updated law eliminates the “low-wage employee” category and limits non-compete agreements to employees earning at least $75,000 annually and non-solicitation agreements to those earning at least $45,000. It also imposes strict notice, consideration, and enforceability requirements, and generally bars enforcement against employees laid off or furloughed due to COVID-19-related circumstances without continued pay. Employers who fail to comply risk having agreements deemed void and may face attorney’s fees, damages, and civil penalties.