Illinois Non-Compete Agreement
Illinois enforces non-compete agreements only above a $75,000 earnings floor under the Freedom to Work Act, with strict limits. Attorney review available.
Introduction
Illinois enforces the non-compete, an employee's promise not to compete with a business for a set time and area after leaving, only above a rising salary floor that currently sits at $75,000 a year. In Illinois these agreements are enforceable, but only within strict limits set by the Illinois Freedom to Work Act (820 ILCS 90), which took effect on January 1, 2022. The most important limit is a salary floor: under Section 90/10 a covenant not to compete is void and illegal unless the employee's actual or expected annualized earnings exceed $75,000 per year, a figure that rises to $80,000 in 2027, $85,000 in 2032, and $90,000 in 2037. A narrower covenant not to solicit customers or coworkers requires earnings above $45,000. Even above the floor, a covenant is enforceable only if it is supported by adequate consideration, is ancillary to a legitimate business interest, is no greater than necessary to protect that interest, does not impose undue hardship on the employee, and is not injurious to the public (Section 90/15). The employer must also advise the employee in writing to consult an attorney and give at least 14 calendar days to review the covenant before signing (Section 90/20). Some workers cannot be bound at all: covenants are void for construction workers and for employees covered by a collective bargaining agreement. This page explains Illinois's rules and offers a template scoped to what Illinois actually permits. It is a state-law overview, not a promise that any given clause will hold up.
Key Things to Know
- 1
A non-compete agreement is a contract in which one party, usually an employee, agrees not to compete with a business for a set time and area after the relationship ends. In Illinois it is enforceable only within the strict limits of the Freedom to Work Act (820 ILCS 90).
- 2
Illinois allows employee non-competes but voids them below a salary floor. Under 820 ILCS 90/10 a covenant not to compete is void and illegal unless the employee's annualized earnings exceed $75,000 per year, and a covenant not to solicit is void unless earnings exceed $45,000.
- 3
The thresholds rise on a schedule. The non-compete floor increases to $80,000 on January 1, 2027, $85,000 on January 1, 2032, and $90,000 on January 1, 2037; the non-solicitation floor rises to $47,500, then $50,000, then $52,500. Confirm the current figure and do not use another state's number.
- 4
Even above the floor, a covenant is enforceable only if it is ancillary to a legitimate business interest, no greater than necessary to protect that interest, does not impose undue hardship on the employee, and is not injurious to the public (820 ILCS 90/15). Courts in Illinois weigh time, geography, and scope against that interest.
- 5
The covenant needs adequate consideration and advance notice. Under 820 ILCS 90/5 adequate consideration means at least 2 years of continued employment after signing or other adequate professional or financial benefits, and under Section 90/20 the employer must advise the employee in writing to consult an attorney and give at least 14 calendar days to review it.
- 6
Some workers cannot be bound at all. A covenant is void and illegal for construction workers (with narrow management and sales carve-outs) and for employees covered by a collective bargaining agreement, and it is void for a worker terminated in COVID-19-like circumstances unless the employer pays base salary during the enforcement period (820 ILCS 90/10).
- 7
Confidentiality and trade-secret agreements are excluded from the Act and are not subject to the salary floor, so Illinois employers often protect confidential information with a nondisclosure agreement and the Illinois Trade Secrets Act (765 ILCS 1065) instead of, or alongside, a non-compete.
Key decisions before you file
Before you file a Non-Compete Agreement in Illinois, a few decisions shape the document: which option to choose and what each one means. The Non-Compete Agreement guide walks through them.
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Illinois Requirements for Non-Compete Agreement
In Illinois an employee non-compete is enforceable, but only within the Illinois Freedom to Work Act (820 ILCS 90), effective January 1, 2022. The covenant must clear a salary floor, rest on adequate consideration, protect a legitimate business interest, be reasonable, and be properly noticed. A covenant that misses any of these requirements is void and cannot be enforced in Illinois.
A covenant not to compete is void unless the employee's actual or expected annualized earnings exceed $75,000 per year (820 ILCS 90/10). The floor rises to $80,000 on January 1, 2027, $85,000 on January 1, 2032, and $90,000 on January 1, 2037. Confirm the current figure and do not rely on any other state's salary number.
A narrower covenant not to solicit the employer's customers or coworkers is void unless the employee's annualized earnings exceed $45,000 per year (820 ILCS 90/10), rising to $47,500, then $50,000, then $52,500 on the same 2027, 2032, and 2037 dates. This lower-threshold option lets an employer protect customer and coworker relationships when a full non-compete would be void on earnings.
Even above the salary floor, a covenant is enforceable only if it is ancillary to a legitimate business interest, no greater than necessary to protect it, does not impose undue hardship on the employee, and is not injurious to the public (820 ILCS 90/15). Illinois sets no fixed maximum duration or distance; courts in Illinois weigh the time, geography, and restricted activities together, so keep the restriction narrow.
The covenant must be supported by adequate consideration under 820 ILCS 90/5, which means the employee worked at least 2 years after signing or the employer otherwise provided consideration adequate to support the agreement, such as a shorter employment period combined with additional professional or financial benefits. Continued at-will employment alone is often not enough in Illinois.
Under 820 ILCS 90/20 the employer must advise the employee in writing to consult an attorney before entering into the covenant and must provide a copy at least 14 calendar days before employment begins or give at least 14 calendar days to review it. The employee may sign before the 14 days end, but the employer must have offered the full review period. A covenant without this notice is not properly formed.
A covenant not to compete is void and illegal for individuals covered by a collective bargaining agreement under the Illinois Public Labor Relations Act or the Illinois Educational Labor Relations Act, and for individuals employed in construction (except certain management, engineering, design, sales, or ownership roles) - 820 ILCS 90/10. It is also void for a worker terminated in COVID-19-like circumstances unless the employer pays base salary during the enforcement period, minus later earnings.
Illinois courts may reform or sever an overbroad covenant but need not, and extensive rewriting may be against public policy (820 ILCS 90/35), while a prevailing employee recovers attorney fees (820 ILCS 90/25). Because confidentiality and trade-secret agreements sit outside the Act, Illinois employers often protect information with a nondisclosure agreement and the Illinois Trade Secrets Act (765 ILCS 1065) rather than rely on a broad non-compete.
Frequently Asked Questions
Yes, but only within strict limits. The Illinois Freedom to Work Act (820 ILCS 90/10) makes a covenant not to compete void and illegal unless the employee's actual or expected annualized earnings exceed $75,000 per year. Even above that floor, the covenant must be supported by adequate consideration, tied to a legitimate business interest, no greater than necessary, and not injurious to the public (Section 90/15). An employee non-compete that misses any of these requirements is unenforceable in Illinois.
Illinois does not set a fixed maximum number of months. Under 820 ILCS 90/15 the duration must be reasonable, meaning no greater than necessary to protect the employer's legitimate business interest and not an undue hardship on the employee. Courts in Illinois generally weigh the time period together with the geographic area and the restricted activities, so a shorter, tightly scoped restriction is far more likely to hold up than a long or broad one. There is no safe-harbor length that is automatically enforceable.
Illinois ties enforceability to an earnings floor under 820 ILCS 90/10. A covenant not to compete is void unless the employee's actual or expected annualized earnings exceed $75,000 per year, rising to $80,000 in 2027, $85,000 in 2032, and $90,000 in 2037. A narrower covenant not to solicit customers or coworkers requires earnings above $45,000, rising to $47,500, then $50,000, then $52,500. Below these figures the covenant is void regardless of how reasonable it looks.
Under 820 ILCS 90/15 a covenant is enforceable only if the employee received adequate consideration, the covenant is ancillary to a valid employment relationship, it is no greater than required to protect a legitimate business interest of the employer, it does not impose undue hardship on the employee, and it is not injurious to the public. The employee must also earn above the applicable salary floor (Section 90/10) and receive the required notice (Section 90/20). All of these must be met for an Illinois court to enforce the covenant.
Yes. Under 820 ILCS 90/20 the employer must advise the employee in writing to consult with an attorney before entering into the covenant, and must give the employee a copy at least 14 calendar days before employment begins or at least 14 calendar days to review it. The employee may choose to sign before the 14 days run out, but the employer must have offered the full review period. A covenant presented without this notice is not properly formed in Illinois.
Yes. Under 820 ILCS 90/10 a covenant not to compete is void and illegal for individuals covered by a collective bargaining agreement under the Illinois Public Labor Relations Act or the Illinois Educational Labor Relations Act, and for individuals employed in construction (except certain management, engineering, design, sales, or ownership roles). A covenant is also void for a worker terminated or furloughed in COVID-19-like circumstances unless the employer pays the worker's base salary for the enforcement period, minus later earnings.
Maybe, but you cannot count on it. Under 820 ILCS 90/35 extensive judicial reformation may be against Illinois public policy, and a court may refrain from wholly rewriting a contract. A court may in its discretion reform or sever overbroad provisions, weighing the fairness of the restraints as originally written, whether they were a good-faith effort to protect a legitimate interest, how much reformation is needed, and whether the agreement authorized modification. Draft the covenant narrowly rather than relying on a court to fix it.
No. In 2024 the Federal Trade Commission issued a rule that would have banned most non-competes nationwide, but a federal court set it aside before it took effect, so it is not currently in force and its status has remained unsettled. Either way, non-competes in Illinois continue to be governed by the Illinois Freedom to Work Act (820 ILCS 90) and Illinois common law: enforceable above the salary floor, but only when reasonable and properly formed.