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The change requires employees to have at least 14 calendar days to review the agreement. However, employees can log in for less than 14 days if they wish. The law also requires employees to be asked in writing to consult with a lawyer before signing the agreement. If an employer fails to comply with these Terms, the agreement will be considered illegal and void. While Illinois` Freedom to Work Act, as amended, warns against the complete rewriting of non-compete obligations, it states that courts can decide at their discretion whether to reform or separate non-compete obligations and non-solicitation provisions, rather than declaring them unenforceable as a whole. The relevant factors in determining whether judicial reform is appropriate are the fairness of the restrictions originally drafted, whether the original restriction reflects a bona fide effort to protect a legitimate business interest of the employer, the extent of that reform, and whether the parties have included a clause approving the reform in the agreement. For this reason, the inclusion of a blue pencil provision in any restrictive covenant agreement will continue to be important. The amendment codifies the legal requirements previously set out in court decisions and provides that non-compete obligations and solicitation prohibitions are illegal and void unless: (1) the employee is duly taken into account, (2) the agreement is an agreement ancillary to a valid employment relationship, (3) the agreement is no greater than necessary to protect a legitimate business interest of the employer (see below), (4) The contract does not impose unreasonable hardship on the employee and (5) the contract is not prejudicial to the public. With a few exceptions, the amendment to the Freedom of Labour Act prohibits non-compete obligations for workers in the construction industry in general. However, non-competitions can be used for construction workers whose main tasks include management, engineering, architectural design or sales.

Those who are shareholders, partners or owners of a company in the construction industry may also be invited to sign non-competitions. Previously, Illinois law prohibited employers from entering into non-compete agreements with employees earning $13 per hour or less. As amended, the Freedom to Work Act prohibits non-compete obligations for employees earning $75,000 per year or less. The amendment also prohibits non-poaching of agreements with customers and employees for employees earning $45,000 per year or less. The wage threshold will be raised to reflect inflation until 2037. For non-competitors, the thresholds will be increased as follows: $80,000 by January 1, 2027; $85,000 by January 1, 2032; and $90,000 by January 1, 2037. For non-solicitations, the threshold will be increased as follows: $47,500 in 2027; $50,000 in 2032; and $52,500 in 2037. In order for non-compete obligations and requests for non-investigation to be enforceable, employers must now notify employees in writing to consult with a lawyer before signing the agreement. In addition, employers must give employees at least 14 calendar days to review a copy of the agreement before complying with the terms. As long as the employer provides the necessary advice and gives the employee two weeks to review and sign, employers will comply with the regulations, even if the employee waives these rights. As of January 1, 2022, Illinois employers will be more limited in their ability to bind employees to non-compete and non-solicitation agreements.

These changes are the result of a recent amendment to Illinois` Freedom of Work Act, Illinois Senate Bill 672 (the amendment). The amendment codified several restrictions on restrictive agreements, including non-compete and solicitation agreements, which were previously regulated only by court decisions. The amendment also established new barriers to non-compete obligations and non-poaching. These amendments, described below, apply to non-compete obligations and solicitation clauses completed as of January 1, 2022. The amendment requires that employees who are asked to sign a non-competition clause or non-competition clause must have at least 14 calendar days to review the agreement. Employers must also advise employees in writing to consult with a lawyer before signing the agreement. Failure to comply with these Terms will result in the illegality and nullity of the Agreement. Due to the number of significant changes required by the amendment to the Freedom of Labour Act, companies should work with a lawyer to bring their non-compete obligations and investigations into compliance with this new law. Otherwise, many agreements could become legally invalid. The amendment also prohibits non-compete obligations for persons covered by a collective agreement under the Illinois Public Labor Relations Act or the Illinois Educational Labor Relations Act.

In addition to non-compete clauses and solicitation agreements entered into prior to January 1, 2022, IFWA also excludes some fairly common restrictions on employees from its strict restrictions. The provisions and agreements of confidentiality and secrecy remain unaffected. In addition, contractual clauses requiring prior termination and agreements by which the employee agrees not to reapply after termination will be intact by IFWA. The amended IFWA also provides that the income threshold for the restriction of non-competition will be increased by $5,000 every five years and will be $90,000 in 2037. Reform of excessively broad restrictions: at the discretion of the court The law comes into force on 1 January 2022 and only applies to agreements concluded after that date. Illinois employees should review all existing employment contracts that contain restrictive agreements now to determine whether the 2021 revisions best protect their interests and ensure compliance with the new law for agreements in 2022 and beyond. Consideration has been a key issue for Illinois employers. Illinois jurisprudence states that employment at will is not sufficient on its own to support a non-compete obligation, but that two years of employment is sufficient.