A non-compete agreement is a contract between an employer and an employee. It’s a promise by the employee not to compete with the employer after leaving their job. In 2022, Illinois updated the Freedom to Work Act making significant changes to how non-compete agreements work. Contact our business lawyer Skokie Illinois if you have questions about or need legal support regarding non-compete agreements. Call The Law Office of David Hyde at 312-210-9598 for a consultation.
Non-compete agreements are used to protect a business’s trade secrets and other confidential information, such as customer lists or marketing strategies. A court will enforce these agreements if they believe it would be in their best interest, but there are some situations where they won’t be enforced at all.
The basics of a non-compete agreement
A non-compete agreement is a type of contract. It’s an agreement between two parties, usually a business and an employee or independent contractor. Non-compete agreements must still be in writing if they are going to be enforceable by law. They must also be signed by both parties before becoming valid and binding on both sides.
The most common type of non-compete agreement has one party promising not to compete with another party for a specific time period or within a certain area (geographic). This can happen after employment ends with the company who gave out this kind of contract so that former workers don’t go directly into competition against them right away after leaving their jobs.
Illinois 2022 changes
As of January 1, 2022, there have been more limitations placed on employers in regards to non-compete agreements. These changes were a result of an amendment to the Freedom to Work Act. One significant change is who can enter into this type of contract. As of January 1, 2002, non-compete agreements are only for employees earning more than $75,000 per year.
This monetary threshold will increase over time. On January 1, 2027 the earnings must exceed $80,000 per year. On January 1, 2032 the earnings must exceed $85,000 per year. And as of January 1, 2037 earning must exceed $90,000 per year. If these monetary thresholds are not met, an employer cannot require an employee to sign a non-compete agreement.
If you need support navigating this updated non-compete agreement for Illinois, The Law Office of David Hyde can help. Our business lawyer Skokie Illinois is committed to providing you with the most cost-effective, simple, yet elegant solutions that will help you continue to move your business forward.
Enforcing a non-compete agreement
A non-compete agreement is only enforceable if it meets some basic requirements. Because there is nuance to these requirements, it is important that you consult a business lawyer Skokie Illinois to ensure your agreements are crafted in a manner that makes them enforceable.
The scope of the agreement must be reasonable in terms of time and geography. For example, an employee who works in one city cannot be prohibited from working for a competitor anywhere else in that state or country.
The duration of the restriction should not exceed what’s necessary to protect your business interest. Courts will generally look at how long it would take someone with skills comparable to yours to find another job after leaving your company. Also, the employee cannot face undue hardship because of the non-compete agreement.
Our experienced business lawyer Skokie Illinois will do everything possible to help your business avoid legal pitfalls
When you hire employees in Illinois, it’s important to know the legal rights you have. Non-compete agreements are legally binding contracts that protect your business and trade secrets. However, they need to be structured appropriately in order to be enforceable in Illinois.
Non-compete agreements can be difficult to craft, however The Law Office of David Hyde has the experience and passion to help you tackle this and any other difficult problem that arises. Contact our business lawyer Skokie Illinois for a consultation and to help you with business strategy.
