2022 ushers in sweeping noncompete, nonsolicitation agreement limits in Illinois

For employers looking to think, talk, and worry about something besides COVID-19, we have just the topic: the Illinois Freedom to Work Act (IFWA). In August 2021, Governor J.B. Pritzker signed into law an amendment to the Act that imposes new restrictions on noncompetition and nonsolicitation agreements. Here’s what the delta variant and vaccine mandates caused you to miss.

Defining moment

The IFWA, which will take effect on January 1, 2022, will impose new restrictions on when employers can use noncompete and nonsolicitation agreements, what employers must provide to employees to make such agreements enforceable, and when courts will enforce the agreements.

The Act defines “covenant not to compete” as an agreement between an employer and an employee entered into after January 1, 2022, that restricts the employee from performing:

• Any work for another employer for a specified period of time;
• Any work in a specified geographical area; or
• Work for another employer that’s similar to the employee’s work for the employer that is a party to the agreement.

The definition also includes an agreement between an employer and an employee that imposes adverse financial consequences on the former employee if she engaged in competitive activities after the termination of her employment with the employer.