It’s no secret that Illinois courts have historically been less than friendly to restrictive covenants, and non-compete agreements in particular. On August 13, 2021, Governor JB Pritzker signed into law Public Act 102-0358, an amendment to Illinois’ “Freedom to Work Act,” which both codifies existing requirements under Illinois precedent, and imposes new restrictions on when, with whom, and under what circumstances Illinois will enforce non-compete and non-solicitation agreements.
Articles Discussing Restrictive Covenants In Illinois.
On August 13, 2021, Illinois Governor JB Pritzker signed into law Senate Bill (SB) 672, an amendment to the Illinois Freedom to Work Act. While the law codifies substantive Illinois common law on restrictive covenants, it also sets forth new and important limitations and requirements regarding the use of noncompete
Recently, the Illinois General Assembly passed legislation significantly amending the Illinois Freedom to Work Act, which governs the legality and enforceability of non-compete agreements and other post-employment restrictive covenants. The new law imposes some new restrictions on the use of […]
After extensive negotiations between interest groups representing both employees and businesses, the Illinois General Assembly passed a major bill on May 31, 2021, that further limits and clarifies the circumstances in which restrictive covenants can be enforced against Illinois employees. Illinois Governor J. B. Pritzker is expected to sign
In 2016, Illinois enacted the Illinois Freedom to Work Act (IFWA). In doing so, it became one of the first states to pass legislation in response to the Obama administration’s Call to Action, which asked states to amend their restrictive covenant laws to, among other things, ban covenants not to
An Illinois appellate court recently clarified the outer limits of the controversial “inevitable disclosure doctrine” under the Illinois Trade Secrets Act.
Among the bills awaiting signature by Illinois Governor J.B. Pritzker is an amendment to the Illinois Equal Pay Act of 2003 that would ban employers from asking job applicants for information about their wage, salary or benefits history. Governor Pritzker is expected to sign the bill, HB834. With this new law, Illinois joins at least 12 other states and multiple counties and municipalities in restricting employers’ ability to obtain or use applicants’ compensation history in the process of hiring and setting compensation.
Executive Summary: When drafting restrictive covenants, employers face a common dilemma about the scope of activities to be restrained. On the one hand, highly focused non-compete language tends to be more enforceable but might not protect the company’s legitimate business interests. On the other, a one-size-fits-all blanket prohibition is more comprehensive but runs the risk it will be unreasonably broad and unenforceable. A recent decision by a federal court in Illinois, Medix Staffing Solutions, Inc. v. Dumrauf (N.D. Ill. Apr. 17, 2018), draws a bright line regarding when a non-compete clause is overbroad as a matter of law. Notably, the court rejected language used frequently in non-compete covenants throughout the country, finding the language so all-encompassing as to be entirely unreasonable.
While the emergence of biometric technology in the workplace is not a new phenomenon, employers being sued for utilizing this technology is a new trend. Over the past three months, more than 30 class action lawsuits have been filed in Illinois state and federal courts against employers that use timeclocks that scan an employee’s fingerprint, retina, or iris to clock employees into and out of work (“biometric timeclocks”).1 The lawsuits allege violations of Illinois’ Biometric Information Privacy Act (“BIPA”), which governs the collection, use, and disclosure of biometric data2 by entities in Illinois.
Illinois has a new non-compete statute that bans the use of non-compete agreements with “low-wage” employees.
The saga of “What consideration is adequate?” in Illinois continues. What has become clear is that federal courts are more forgiving than Illinois state courts on this issue.
A recent decision from an Illinois Appellate Court suggests that employers with non-compete agreements “built to scare” may end up with an unenforceable contact and even the loss of confidential information under Illinois law. AssuredPartners, Inc. v. Schmitt (October 27, 2015 1st Dist.)
Since the much-discussed Fifield case from the Illinois appellate court two years ago, all that could be said with confidence was that, unless someone was employed for at least two years after signing a restrictive covenant agreement, its enforceability was highly questionable. Practitioners in Illinois have been recommending that employers provide consideration in addition to employment, such as a “sign on” bonus tied to the restrictions or any other consideration that would not be given but for the individual’s agreement to the restrictions. In the next breath, practitioners have been telling their clients that even the additional consideration might not be enough to bind employees employed for less than two years. Uncertainty is everyone’s enemy in this area, and there has been great uncertainty for the past two years. But that uncertainty recently has been reduced by the same appellate court’s ruling in McInnis v. OAG Motorcycle Ventures, Inc. decided June 25, 2015 by the Illinois Appellate Court for the First District, albeit by a 3-judge panel different from the panel that decided Fifield.
A recent Illinois federal court decision has called into question the much begrudged holding from the Illinois Appellate Court for the First District, First Division, in Eric Fifield and Enterprise Financial Group, Inc. v. Premier Dealer Services, Inc., 373 Ill. Dec. 379, 993 N.E. 2d 938 (Ill. App. Ct. June 24, 2013).
In a decision handed down June 24, 2013, the Illinois Appellate Court, First District, found a restrictive covenant unenforceable due to lack of adequate consideration. Although this is not the first time an Illinois court has held that there must be at least two years of continued employment to constitute adequate consideration to support a restrictive covenant, the ruling in this case was remarkable because: