Non-compete clause Illinois - enforceability guide

Illinois voids non-compete agreements for employees earning $75,000 or less per year under the Freedom to Work Act (820 ILCS 90/). The threshold rises to $80,000 on January 1, 2027, and increases by $5,000 every five years through 2037. For workers above the threshold, a non-compete is enforceable only if the employer provided adequate consideration, gave the employee at least 14 days to review the contract, and advised the employee in writing to consult an attorney.

Illinois sits in the middle of the national non-compete environment: stricter than Texas, far more permissive than California. The Freedom to Work Act, originally passed in 2016 and significantly amended by Public Act 102-0358 effective January 1, 2022, sets a clear floor that protects most hourly and mid-level salaried workers while leaving room for enforceable restrictions on higher earners. If you signed a non-compete after that date, the salary number on your W-2 typically determines whether the clause means anything.

Table of Contents

• The Income Threshold That Voids Most Illinois Non-Competes
• The 2022 Amendments at a Glance
• Adequate Consideration: The Fifield Rule and What Replaced It
• The 14-Day Review and Attorney-Consult Requirements
• The Reliable Fire Reasonableness Test
• Workers Outside the Ban: Construction, Layoffs, and Collective Bargaining
• Illinois vs. California, Texas, and Florida
• Is My Illinois Non-Compete Enforceable?
• Frequently Asked Questions

The Income Threshold That Voids Most Illinois Non-Competes

The Freedom to Work Act draws a bright line based on what the employee earns. Under 820 ILCS 90/10(a), an employer cannot enter into a non-compete with an employee whose actual or expected annualized earnings do not exceed $75,000. The same section sets a lower $45,000 threshold for non-solicitation covenants, the type of restriction that bars contact with former clients or coworkers rather than employment with a competitor.

Both thresholds rise on a predictable schedule:

"Earnings" includes salary, earned bonus, earned commissions, and any other taxable compensation reflected on a W-2 or comparable form. It excludes employer contributions to benefits like health insurance or retirement. For employees paid hourly or on a draw, the test looks at expected annualized earnings, so a worker hired mid-year at a rate that would produce $80,000 over a full year clears the threshold even if their first-year W-2 shows less.

A covenant signed with a sub-threshold employee is void from the start. The employer cannot rescue it by giving the employee a raise later, although a raise above the threshold combined with a newly signed agreement after the raise is generally permissible.

The 2022 Amendments at a Glance

The original 2016 Freedom to Work Act only banned non-competes for "low-wage" employees, defined as those earning the greater of the state minimum wage or $13.00 per hour. That was a narrow protection. Senate Bill 672, signed by Governor Pritzker in August 2021 as Public Act 102-0358, rewrote the statute end-to-end. The amendments took effect for agreements entered into on or after January 1, 2022, and they did six things:

1. Raised the income threshold from minimum wage to $75,000 for non-competes and $45,000 for non-solicits, with scheduled increases through 2037.
2. Codified consideration requirements by adding 820 ILCS 90/10(b), giving employers an alternative to the two-year continued-employment rule from Fifield.
3. Imposed procedural safeguards: written notice to consult an attorney and a 14-day review period before signing.
4. Banned covenants for COVID-19-affected employees who were laid off, furloughed, or terminated as a result of pandemic-related public health orders, unless the employer pays the employee's base salary for the restricted period.
5. Banned covenants in the construction industry and for workers covered by a collective bargaining agreement under the Illinois Public Labor Relations Act or the Illinois Educational Labor Relations Act.
6. Added fee-shifting and AG enforcement: employees who beat an enforcement action recover fees, and the Illinois Attorney General can investigate patterns of unlawful use.

Critically, the 2022 amendments do not apply retroactively. A non-compete signed on December 31, 2021 is governed by the pre-amendment statute and the prevailing common law, including the Reliable Fire reasonableness test and whichever consideration rule applied in the relevant appellate district. If your contract predates 2022, the income threshold doesn't help you, but the underlying common law still might.

Adequate Consideration: The Fifield Rule and What Replaced It

Illinois has long required something more than continued at-will employment to support a restrictive covenant. The leading case is Fifield v. Premier Dealer Services, 2013 IL App (1st) 120327, which held that a covenant signed in exchange for new at-will employment is unenforceable unless the employee actually works for at least two years after signing. The First District's reasoning: anything less means the employer could fire the employee the next day and still hold the covenant over them, which is no consideration at all.

The Fifield rule was always controversial. It came from the First District (Cook County), and other appellate districts have either rejected it or applied it inconsistently. Federal courts sitting in Illinois have split as well. The 2022 amendments did not resolve this split for pre-2022 agreements. They did, however, codify a statutory alternative for new agreements.

Under 820 ILCS 90/10(b), adequate consideration means either:

• The employee worked for the employer for at least two years after signing the covenant, or
• The employer provided other consideration adequate to support the agreement, defined as a "period of employment plus additional professional or financial benefits, or merely professional or financial benefits adequate by themselves."

The second prong is what changed the picture. Employers no longer have to wait two years to lock in enforceability. A signing bonus tied to the covenant, a meaningful equity grant, a promotion with materially increased pay, or specialized training the employee would not otherwise have received can all qualify, provided the benefit is genuinely tied to the covenant and not just normal compensation the employee would have earned anyway.

What does not qualify on its own: a routine annual raise, continued access to a job the employee already had, or a vague reference to "confidential information" the employee was already entitled to see. Pact's AI contract review can flag whether a non-compete clause references consideration that meets the statutory test, although final judgment on adequacy still belongs to a court or an employment attorney. The app is iOS-only.

The 14-Day Review and Attorney-Consult Requirements

Even when the income threshold is cleared and consideration is adequate, a covenant signed without the procedural safeguards in 820 ILCS 90/20 is unenforceable. The employer must:

1. Advise the employee in writing to consult with an attorney before signing, and
2. Provide the agreement at least 14 calendar days before the employee's employment begins, or give the employee at least 14 calendar days to review the agreement.

The employee can sign before the 14 days elapse; the requirement is that the time was offered, not used. But if the employer presents a non-compete on day one of orientation with a "sign now or lose the offer" posture, the covenant is void on its face. The statute is explicit: failure to comply renders the covenant illegal and unenforceable.

This is the rare situation where a paper trail benefits the employee. If you signed a non-compete after January 1, 2022 and the employer cannot produce a written attorney-consult notice and evidence you had at least 14 days, the agreement does not meet the statute regardless of how reasonable it looks on the page.

The Reliable Fire Reasonableness Test

For covenants that survive the threshold and consideration tests, Illinois applies the reasonableness framework from Reliable Fire Equipment Co. v. Arredondo, 2011 IL 111871. The Illinois Supreme Court held that a restrictive covenant is enforceable only if:

• It is no greater than required to protect a legitimate business interest of the employer,
• It does not impose undue hardship on the employee, and
• It is not injurious to the public.

"Legitimate business interest" is judged on the totality of the circumstances. Relevant factors include the near-permanence of customer relationships, the employee's access to confidential information, time and place restrictions in the covenant, and the employer's investment in training. The court rejected any rigid test. No single factor controls, and the analysis is fact-specific.

In practice, the Reliable Fire framework is where most disputes are actually decided. The income threshold determines whether the case even begins. The consideration and notice rules screen out clearly defective agreements. But when an executive earning $250,000 challenges a two-year, nationwide non-compete, the court usually focuses on whether the geographic scope and duration match the employer's actual business reach.

The same totality-of-circumstances analysis applies to other restrictive covenants too — non-solicitation, no-hire, and confidentiality terms — though the threshold and procedural requirements apply only to non-competes and non-solicits. For a broader view of how these clauses work across jurisdictions, see our non-compete clause explainer.

Workers Outside the Ban: Construction, Layoffs, and Collective Bargaining

The Freedom to Work Act carves three categories of workers out of coverage entirely, meaning their employers cannot impose a non-compete regardless of income.

Construction industry workers. Under 820 ILCS 90/10(c)(2), employees who perform work in the building and construction trades are exempt. The carve-out exists because construction projects routinely move workers between contractors, and non-competes would distort an already mobile labor market. The exemption does not apply to construction-industry employees who primarily perform management, engineering, design, sales, or who are direct or indirect owners of the employer.

COVID-19-affected employees. Section 10(c)(1) bars enforcement of a non-compete against an employee who was terminated, furloughed, or laid off as a result of COVID-19-related governmental orders — unless the employer pays the employee's base salary at the time of termination for the entire restricted period, minus any compensation earned through subsequent work. The provision is permanent statutory text, not a temporary pandemic-era rule, and remains on the books.

Collective bargaining agreement coverage. Section 10(c)(3) excludes employees covered by a collective bargaining agreement under the Illinois Public Labor Relations Act or the Illinois Educational Labor Relations Act. Most public-sector union members and public education employees are accordingly outside the statute's enforceability framework.

If you fall into one of these categories, the analysis ends there. The income threshold, consideration test, and Reliable Fire factors don't matter — the covenant is unenforceable as a matter of category, not degree.

Illinois vs. California, Texas, and Florida

Where Illinois sits in the national framework becomes clearer in comparison. Each state has taken a fundamentally different approach in the last four years.

If you've signed restrictive covenants in more than one state — common for remote workers and people who relocated during the pandemic — the California ban explainer, Texas enforceability guide, and Florida CHOICE Act overview cover the specifics of each regime. The choice-of-law clause in your contract frequently determines which framework actually applies.

Is My Illinois Non-Compete Enforceable?

Work through these questions in order:

1. When did you sign the covenant? If on or after January 1, 2022, the Freedom to Work Act applies in full. If before, the income threshold and procedural rules don't apply, but Reliable Fire and the relevant district's consideration rule still do.

2. What are your actual or expected annualized earnings? At or below $75,000 (or $45,000 for a non-solicit) and signed in 2022 or later, the covenant is void by statute. Above the threshold, continue.

3. Did you receive 14 days to review the agreement and a written attorney-consult notice? If not, the covenant is unenforceable regardless of income or reasonableness.

4. Did the employer provide adequate consideration? Two years of continued employment after signing satisfies the statute. Alternatively, a signing bonus, equity grant, promotion, or training package tied to the covenant can qualify under 820 ILCS 90/10(b).

5. Does the covenant pass the Reliable Fire test? The restriction must protect a legitimate business interest, not impose undue hardship on you, and not harm the public. Geographic scope, duration, and scope of restricted activity must each be reasonable in relation to the employer's actual interests.

6. Are you in a carved-out category? Construction industry, COVID-19-related layoff, or covered by a public-sector collective bargaining agreement — any of those puts the covenant outside enforceable territory.

If the analysis points toward unenforceability and your employer is signaling that they'll try to enforce anyway, the fee-shifting provision in 820 ILCS 90/25 changes the economics. An employer who loses an enforcement action pays your reasonable attorney's fees. Most Illinois employment attorneys will take these cases on contingency or hybrid arrangements as a result. The Illinois Attorney General also publishes a complaint pathway for systematic violations under 820 ILCS 90/30.

For a quick first pass on contract language, Pact's AI contract review flags non-compete clauses, identifies whether the income threshold and procedural requirements appear satisfied, and notes terms that look unreasonable in scope. Use it as a triage tool before deciding whether to escalate to an attorney. Apple-only, so Android users will need a different starting point.

Frequently Asked Questions

Are non-compete agreements legal in Illinois?

Yes, for employees earning more than $75,000 per year in actual or expected annualized earnings, provided the employer also gave the employee 14 days to review the agreement, advised in writing to consult an attorney, and supplied adequate consideration. For employees at or below the threshold, the covenant is void under the Freedom to Work Act.

What is the Illinois Freedom to Work Act salary threshold?

$75,000 for non-competes and $45,000 for non-solicitation covenants through December 31, 2026. The thresholds rise to $80,000 and $47,500 on January 1, 2027, then $85,000 and $50,000 in 2032, then $90,000 and $52,500 in 2037. The schedule is set by statute and does not require new legislation to take effect.

What counts as adequate consideration in Illinois?

Either two years of continued employment after signing the covenant, or other consideration adequate to support the agreement — defined as a period of employment plus additional professional or financial benefits, or such benefits alone. Signing bonuses, equity grants, promotions, and specialized training tied to the covenant can all qualify. A standard at-will offer with nothing more does not.

Does the Illinois law apply to non-competes I signed before 2022?

No. The 2022 amendments apply only to agreements entered into on or after January 1, 2022. Pre-2022 covenants are governed by the prior version of the statute (which only protected low-wage workers earning below state minimum wage) and by Illinois common law, including the Reliable Fire reasonableness test and the Fifield two-year consideration rule for the First District.

Can an Illinois court rewrite an overbroad non-compete?

Sometimes. Under 820 ILCS 90/35, reformation is discretionary. The court may rewrite a covenant if the modification is not extensive and the employer drafted the agreement in good faith. Illinois courts will more frequently void a clearly overbroad clause than redraw it. This contrasts with Texas, which requires reformation, and California, which voids outright.

What if my Illinois employer tries to enforce an unenforceable non-compete?

If the employer files suit and you prevail, 820 ILCS 90/25 entitles you to recover your reasonable attorney's fees and costs from the employer. The fee-shifting is one-way — employers do not recover fees if they win. The Illinois Attorney General also has independent investigative and enforcement authority under 820 ILCS 90/30 against employers who engage in a pattern or practice of using void covenants.

Sources

1. Illinois Freedom to Work Act, 820 ILCS 90/. Illinois General Assembly, current through 2022 amendments. ilga.gov

2. Public Act 102-0358 (SB 672). Illinois General Assembly, signed August 13, 2021, effective January 1, 2022. ilga.gov

3. Reliable Fire Equipment Co. v. Arredondo, 2011 IL 111871. Illinois Supreme Court. illinoiscourts.gov

4. Fifield v. Premier Dealer Services, 2013 IL App (1st) 120327. Illinois Appellate Court, First District. illinoiscourts.gov

5. Illinois Attorney General Press Release on Freedom to Work Act Amendments. Office of the Illinois Attorney General, August 2021. illinoisattorneygeneral.gov

6. Removal of the Non-Compete Rule from the Federal Register. Federal Register, February 12, 2026. federalregister.gov

7. "Noncompete Agreements: Status of Laws Nationwide — March 2026 Update." Katz Banks Kumin, 2026. katzbanks.com