New Illinois Law on Non-Compete and Non-Solicitation Agreements

By: Krishnakala Busani

New Illinois legislation imposes stringent limits on worker non-compete and non-solicitation agreements signed soon after January 1, 2022. It is essential to function closely with an legal professional to be certain that your contracts comply with the new law.

Starting off January 1, 2022, Illinois companies can not enter non-contend or non-solicitation agreements with staff who make fewer than a particular total for each calendar year. The bare minimum income demands for these agreements will raise right until 2037 as follows: $5,000 each individual 5 a long time for non-compete agreements, and $2,500 just about every 5 a long time for non-solicitation agreements.

The underneath table displays the minimal yearly staff wage demanded for non-contend and non-solicitation agreements in Illinois for each and every time period of time.

	Non-contend agreements	Non-solicitation agreements
January 1, 2022 – December 31, 2026	$75,000 for each year	$45,000 for each year
January 1, 2027 – December 31, 2032	$80,000 for each 12 months	$50,000 for every yr
January 1, 2032 – December 31 2036	$85,000 for each yr	$52,500 per year

In addition, an Illinois employer can’t enter a non-compete or a non-solicitation agreement with any staff that the employer terminates due to the COVID-19 pandemic, unless the non-compete agreement provides the employee compensation equal to the staff&#8217s foundation wage at the time of termination for the length of the settlement, considerably less any compensation earned through subsequent work.

At last, Illinois employers will have to advise their workforce in creating to consult with with an attorney before entering non-compete and non-solicitation agreements. The employer have to offer the staff with a copy of the agreements at minimum 14 calendar times right before the commencing of work or supply at minimum 14 calendar times to overview the agreements.

The new limitations implement only to agreements entered soon after January 1, 2022 and will not impact non-compete and non-solicitation agreements signed in advance of that day.

In addition, employers must be conscious of Illinois’s pre-current needs for non-compete or non-solicitation agreements. Frequently, an employer must display that a non-compete or a non-solicitation settlement (1) is no bigger than is demanded for the security of a authentic organization desire of the employer (2) does not impose undue hardship on the personnel and (3) is not injurious to the public.

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Companies ought to have an legal professional review their non-contend and non-solicitation agreements. Chugh, LLP can further more aid you in auditing your work methods to assure your compliance with all applicable laws.

The write-up New Illinois Law on Non-Contend and Non-Solicitation Agreements appeared initially on Chugh LLP.