Chicago Business Litigation Lawyer Blog
Non-compete agreements, often called restrictive covenants, are common legal tools used by employers to protect their business interests. In the state of Illinois, these agreements are subject to specific rules and regulations that both employers and employees should understand. This blog post will provide an overview of non-compete agreements in Illinois, including their purpose, enforceability, and key considerations.
Purpose of Non-Compete Agreements
Non-compete agreements serve as legal contracts between employers and employees. The primary purpose of these agreements is to protect the employer’s legitimate business interests. These interests may include safeguarding trade secrets, customer relationships, and preventing unfair competition. Non-competes are typically used in industries where employees have access to sensitive information and trade secrets, such as technology, healthcare, and finance.
Enforceability in Illinois
Illinois, like many states, has specific laws and regulations regarding non-compete agreements to balance the interests of both employers and employees. In general, for a non-compete agreement to be enforceable in Illinois, it must meet the following criteria:
- Legitimate Business Interest: The non-compete must protect a legitimate business interest, such as confidential information, trade secrets, customer relationships, or specialized training.
- Reasonable Scope: The agreement’s restrictions must be reasonable in terms of geographic scope, duration, and the nature of the activities restricted. Overly broad restrictions may be deemed unenforceable.
- Adequate Consideration: The employee must receive adequate consideration in exchange for signing the agreement. This can include a job offer, a raise, or other benefits.
- Public Policy: The agreement must not violate public policy or statutory law. For example, non-competes cannot prevent employees from pursuing their livelihood or career.
- Special Provisions for Low-Wage Employees: Illinois law contains special provisions that limit the use of non-compete agreements for low-wage employees, making it more difficult for employers to enforce them in these cases.