Client Alert - Employment Law Update
Illinois Enacts Law Banning Non-Compete Agreements with Low-Wage Workers
On August 19, 2016, Governor Bruce Rauner signed the Illinois Freedom to Work Act into law. The new law declares non-compete agreements with low-wage workers illegal and void, and takes effect January 1, 2017.
Under the new law, employers may not enter into an agreement that prevents a low-wage employee from: (1) working for another employer for a specified period of time; (2) working in a specific geographic area; or (3) working for another employer that is similar to the company with which the employee has signed a non-compete. The new law applies to employees earning the greater of $13.00 per hour or the applicable federal, state, or local minimum wage.
Importantly, the law does not apply to non-solicitation agreements or non-disclosure agreements, and does not apply to non-compete agreements entered into before the law's effective date.
What to Do
Employers that utilize non-compete agreements with low-wage workers must begin phasing out their use, and eliminate all such contracts after January 1. However, this also presents an opportunity for all employers to evaluate other tools for protecting business assets, such as non-solicitation agreements, non-disclosure agreements, and confidentiality policies.
If you have any questions about how this legislative enactment will affect your business or have questions about your employment policies and practices in general, please contact Mr. Gonzalez at 312-558-9779 or at egonzalez@elvisgonzalezltd.com.