Illinois Non-Compete Agreement Generator

What is an Illinois Non-Compete Agreement?

An Illinois Non-Compete Agreement is a legally binding contract between an employer and employee that restricts the employee's ability to work for competitors or start a competing business for a specified period after employment ends. Illinois non-compete agreements are subject to specific state laws and recent legislative changes, including the Illinois Freedom to Work Act and its 2021 amendments, which establish minimum salary thresholds, reasonable scope requirements, and other specific enforceability standards that are more restrictive than many other states.

Key Sections Typically Included:

• Parties and Employment Relationship
• Purpose and Legitimate Business Interests Protected
• Specific Prohibited Competitive Activities
• Geographic Scope of Restrictions
• Temporal Duration of Restrictions
• Illinois Salary Threshold Compliance Statement
• Adequate Consideration Acknowledgment
• Carve-Outs for Permissible Activities
• Client and Customer Non-Solicitation Provisions
• Employee Non-Solicitation Clauses
• Confidential Information Protection
• Illinois-Specific Statutory Compliance Language
• Remedies for Breach (Injunctive Relief and Damages)
• Blue Pencil or Judicial Modification Provisions
• Severability and Survival Clauses
• Illinois Governing Law and Venue
• Attorney's Fees and Enforcement Costs
• Employee Acknowledgment of Review Opportunity

Why Use Our Generator?

Our Illinois Non-Compete Agreement generator creates a document specifically tailored to Illinois' unique and recently reformed restrictive covenant laws. The agreement properly addresses statutory salary thresholds, provides adequate consideration, and includes only reasonable restrictions likely to be enforced by Illinois courts. Our tool helps employers protect legitimate business interests while remaining compliant with Illinois' employee-protective legal framework, reducing the risk of unenforceability and potential liability for improper non-compete agreements.

Frequently Asked Questions

• Q: What recent changes to Illinois law affect non-compete agreements?

  • A: Illinois dramatically reformed its non-compete laws through amendments to the Freedom to Work Act effective January 1, 2022. These changes prohibit non-compete agreements for employees earning less than $75,000 annually (increasing to $90,000 by 2037) and non-solicitation agreements for those earning less than $45,000 annually (increasing to $52,500 by 2037). The law requires employers to: (1) provide employees 14 calendar days to review proposed agreements; (2) advise employees in writing to consult an attorney before signing; (3) provide "adequate consideration" beyond continued employment; and (4) demonstrate legitimate business interests for the restriction. The law also prohibits non-competes for employees terminated or furloughed due to COVID-19 or similar circumstances, creates a presumption of undue hardship if enforcement would prevent an employee from earning a living, and authorizes courts to award attorneys' fees to prevailing employees in litigation. Employers who violate these provisions may face civil penalties.

• Q: What constitutes "adequate consideration" for an Illinois non-compete agreement?

  • A: Illinois courts, particularly following the Fifield v. Premier Dealer Services decision, have established that mere continued employment is insufficient consideration unless the employee remains employed for at least two years after signing the agreement. To provide adequate consideration, Illinois employers should offer one or more of the following: (1) Financial compensation specifically tied to the non-compete restriction (such as a signing bonus, retention bonus, or severance package); (2) Specialized training that provides skills beyond what would normally be provided; (3) Access to truly confidential information or customer relationships not otherwise available; (4) Professional development opportunities of significant value; (5) Stock options or equity grants; or (6) Promotion to a position with substantially different responsibilities. The agreement should explicitly identify the consideration provided to the employee and include an acknowledgment that the employee recognizes this as sufficient consideration for the restrictions imposed.

• Q: How should the geographic and activity scope be drafted for Illinois non-compete agreements?

  • A: Illinois courts assess reasonableness of non-compete scope based on the totality of circumstances, with particular scrutiny of geographic and activity restrictions. Geographic limitations should be narrowly tailored to where the employer actually conducts business and the employee performed services—typically limited to specific counties, metropolitan areas, or a defined mile radius from specific locations. Statewide or multi-state restrictions are unlikely to be enforced unless the employer demonstrates business throughout the entire region and the employee's role was equally broad. Activity restrictions should be directly tied to the employee's actual job functions and the employer's legitimate business interests—blanket prohibitions on any employment with competitors are increasingly disfavored by Illinois courts. Instead, restrictions should focus on specific roles, products, services, or customer relationships the employee was directly involved with. The agreement should include a detailed explanation connecting the scope of restrictions to the employer's protectable interests in customer relationships, confidential information, or specialized training provided to the employee.