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Are Non-compete Clauses Legal In Illinois?

On Behalf of | Mar 28, 2017 | Firm News

Along with negotiations over salary and benefits, employees may also bargain over non-compete clauses, which may limit their ability to work for “competitors” should they choose to move on from the company. Prospective employees should understand Illinois has laws pertaining to these agreements and restriction that may make them unreasonable and unenforceable. The ultimate decision of whether the agreement is enforceable often depends on a balancing of many factors. It is, therefore, important that you discuss this with an employment law attorney before taking any action that might violate the agreement, or before signing the agreement.

When examining these clauses, some workers may ask if non-disclosure clauses are legal in Illinois. The answer is generally yes but with certain criteria that must be met. This includes:

  • The clause be no greater in scope than required to protect legitimate business interests of the company;
  • The non-compete agreement may not cause an undue hardship on the employee; and
  • The non-compete clause cannot cause harm to the public.

Furthermore, Illinois courts will generally give consideration to any geographic limitations the scope of the non-compete clause may carry and for how long. These considerations are not specifically listed in Illinois contract laws but they may fall under the undue hardship provision of the statute.

Am I supposed to be paid under a non-compete clause in Illinois?

Illinois law holds that the employee must be compensated (consideration) in some way in exchange for agreeing not to take his or her talents and inside knowledge of a company to a competitor. Illinois will also give special consideration to this aspect of the clause and determine if it is adequate for the employee.

The latter provision makes Illinois unique amongst states enforcing these agreements. In fact, inadequate consideration is fatal to claims by the employer and among the most important aspect of a dispute a court will examine before all else.

Are there time limits to Illinois non-compete clauses?

In Illinois, the employee generally must be employed by his or her company for at least two years for a non-compete clause to be valid, unless there is additional consideration provided by the employer. This usually holds true whether the employee leaves on his or her own accord or is released by the employer.

Additionally, the length a former employee may be subject to a non-compete clause after his or her departure from the general state guidelines for the agreements. Typically, there should be some end date where an employee may work for a competitor.

Chicago employment attorneys

If your employer asks you to sign a non-compete clause as part of your consideration for employment, contact the Chicago employment attorneys of Goldman & Ehrlich for a consultation. Our attorneys will examine the claim and help you advocate for the best interests of you and your career.