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New Laws for 2022: SB672 (Illinois)

 

On August 13th, Illinois Governor J.B. Pritzker signed into law an amendment to the Illinois Freedom to Work Act.  The amendment, which will take effect on January 1, 2022 and only applies to restrictive covenants entered into after January 1, 2022, has several important points to note:

  • Employers in the state are barred from entering into non compete agreements with any employee that earns $75,000 or less per year.  The salary threshold will increase $5,000 every five years until January 2037.
  • Employers are also barred from entering into non solicit agreements with any employee that earns $45,000 or less per year.  The salary threshold will increase $2,500 every five years until January 2037.
  • Before entering into a non compete agreement, employers will be required to advise employees to consult with an attorney.  Employers will also be required to provide employees with at least 14 days to review the non compete or non solicit agreement before they can decide to sign.  (Although employees have the option to sign the non compete or non solicit agreement before the 14 day period is up.)
  • Employers are barred from entering into a non compete or non solicit agreement with an employee that lost their job due to the coronavirus pandemic or under circumstances similar to the coronavirus pandemic unless enforcement of the restrictive covenant includes compensation equivalent to the employee’s base salary at the time of termination for the period of enforcement less compensation earned through subsequent employment during the period of enforcement.

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