New Illinois Non-Compete Act Regarding Low Wage Workers Signed into Law

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Sep 07, 2016

The new Illinois Freedom to Work Act, signed into law last month, prohibits private employers from entering into non-compete agreements with low-wage employees. The law goes into effect on Jan. 1, 2017.

The new law defines a “low-wage” employee as an individual earning, per hour, the greater of (a) federal ($7.25), state ($8.25), or local minimum wage; or (b) $13.00. The act also defines non-competes, or covenants not to compete, as agreements that restrict the low-wage employee from performing: (a) any work for another employer for a specific period of time; (b) any work in a specific geographical area; or (c) work for another employer that is similar to the work previously performed for the employer who is a party to the agreement.

The new law provides that “covenant not to compete” agreements made between non-governmental employers and low wage employees after Jan. 1, 2017 are illegal and void.

Notably, the Freedom to Work Act does not create any restrictions on an employer’s right to protect confidential information or trade secrets though confidentiality agreements with any worker, including low-wage employees. Similarly, on its face, the act does not necessarily apply to other forms of restrictive covenants, such as restrictions on soliciting customers.

If you have any questions about the Freedom to Work Act or any other employment matter, please feel free to contact Karen Milner, Chris Sanders, Corey Franklin, Whitney Cooney, Jamie M. Westbrook, or Ashley Diaz.

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