Is it legal to have a non-compete agreement in Illinois?

Is it legal to have a non-compete agreement in Illinois?

The title of the post asks if non-compete covenants (commonly referred to as CNCs) are still legal in Illinois. The short answer is yes, they are still legal in the state. The long answer requires taking a closer look at the details and outcome of Reliable v. Arredondo, an employment lawsuit involving claims of non-compete violations.

When to sign a non-compete agreement with an employer?

Even if you’re not in the job market right now, you should pay attention to the growing pressure on employees to sign non-compete agreements . You might be confronted with a new non-compete form by your current employer when receiving a raise or promotion.

Can a covenant that stifles competition be honored?

A covenant that severely stifles competition to the point of creating a monopoly might not be acceptable, for instance. Courts will not honor provisions that they deem “unreasonable”—a point you may make in negotiation.

What makes a non compete agreement unenforceable in Illinois?

Agreements that are illegal, give employers virtual monopolies on the workforce in that field or location, or unduly deprive an employee from choosing to go work elsewhere may be unenforceable. In practice, courts look at three factors to determine whether a non-compete agreement is enforceable:

How long can a non compete agreement be?

In order to not place undue hardship on the employer, the non-compete agreements must be limited in duration. We generally see five-year non-compete agreements being upheld.

Why do companies ask employees to sign non compete agreements?

However, research has shown that non-competes limit job mobility, accelerate talent flight and discourage venture-capital investments in areas that enforce them. A non-compete agreement, or a covenant not to compete, is a contract that companies ask employees to sign to protect their corporate interests.

What are the non-solicitation clauses in a non-compete agreement?

Non-solicitation clauses prevent an employee from contacting other employees or customers of the employer in order to lure them to a competitor. Non-disparagement clauses prevent an employee from making negative statements about the employer in public.