A good employee can be hard to find. It’s only natural that a company wouldn’t want its top talent to work for a competitor.
But can an employer add a non-compete clause to your employment contract?
Illinois Freedom to Work Act
Non-compete agreements (NCAs) restrict an employee from going to work for a competitor or starting a competing business. They typically include limits based on geography and time. For example, an NCA might state that you can’t work for a competitor within a 50-mile radius for at least three years after you leave your current job.
Employers state that NCAs are needed to protect their business interests, such as trade secrets or a client list. Some states have made such agreements illegal; however, Illinois still allows them as long as the employer can prove that the agreement is needed and is reasonable in terms of:
- Geographic location
- Duration
- Scope of prohibited activities
Illinois has also taken more steps to limit the use of NCAs by updating the Illinois Freedom to Work Act (IFWA). It states that employers can’t enforce an NCA against an employee who earns less than $75,000. This threshold will increase in increments to reach $90,000 by 2037.
The IFWA also prohibits enforcing NCAs against laid-off employees, ensuring that the employee can make a living during a challenging time.
If your employer wants you to sign a non-compete agreement, it’s imperative that you know your rights. The law gives you at least 14 days to review it. Read it carefully regarding the geographic restrictions, duration and scope. Don’t allow them to rush you or pressure you into signing it. Consult with legal professionals who can assess the agreement’s fairness and possibly negotiate better terms.