Illinois non-compete agreements are heavily regulated — and many that were signed years ago may no longer be enforceable under current law. The Illinois Freedom to Work Act, amended effective January 1, 2022, established salary thresholds, mandatory notice periods, and state enforcement mechanisms that fundamentally changed how employers can use restrictive covenants in this state. Understanding the current rules is essential whether you are an employer drafting a new agreement or an employee who has been handed one to sign.
This guide covers the key requirements under Illinois law as they apply in 2026, including salary thresholds, what constitutes “adequate consideration,” and when the Illinois Attorney General can take action against a non-compliant employer.
What You’ll Learn
What Changed in 2022 and Why It Matters in 2026
Prior to the 2022 amendments, Illinois non-compete law was largely developed through case law with limited statutory guidance. The Illinois Freedom to Work Act, originally enacted in 2016 to protect low-wage workers, was significantly expanded when amended by Public Act 102-0358, effective January 1, 2022.
The 2022 changes introduced a comprehensive statutory framework governing post-employment restrictive covenants. They established salary thresholds below which non-compete and non-solicitation agreements are void, required written notice and time for employees to review agreements, clarified what constitutes adequate consideration, and gave the Illinois Attorney General authority to investigate and bring civil actions against employers who use unlawful agreements.
In 2026, these rules remain in full effect. Agreements entered into before January 1, 2022 are generally governed by prior law, but any new or renewed restrictive covenant must comply with the current statute. Employers who have not reviewed their standard employment agreements since 2021 should do so promptly.
The Salary Thresholds for Enforcement
Under the current Illinois Freedom to Work Act, a post-employment covenant not to compete is only enforceable against an employee who earns more than $75,000 per year in actual earnings. A covenant not to solicit — whether restricting solicitation of customers or other employees — is only enforceable against employees earning more than $45,000 per year.
These thresholds are not static. The statute requires automatic adjustments every five years:
- Non-compete threshold: $75,000 (2022–2026), increasing to $80,000 effective January 1, 2027, then $85,000 in 2032, and $90,000 in 2037.
- Non-solicitation threshold: $45,000 (2022–2026), increasing to $47,500 effective January 1, 2027, then $50,000 in 2032, and $52,500 in 2037.
An agreement that purports to restrict competition from an employee earning below these thresholds is void and unenforceable as a matter of law — not merely voidable at a court’s discretion. Employers cannot draft around this limitation.
The salary calculation uses “actual earnings,” which include wages, salary, and other compensation paid directly by the employer. The statute does not specify whether equity compensation, deferred compensation, or third-party benefits count toward the threshold. Employers with compensation structures involving significant variable pay should consult counsel before relying on those figures to satisfy the threshold.
The 14-Day Notice Requirement
One of the more operationally significant requirements under the 2022 amendments is the mandatory advance notice period. Illinois law now requires that an employer:
- Advise the employee in writing to consult with an attorney before signing the agreement; and
- Provide the employee with the final terms of the agreement at least 14 calendar days before the agreement becomes effective.
The 14-day period runs from the date the employee receives the final written terms. An employee may choose to sign before the 14 days expire, but the employer must still provide the full 14-day window. Presenting a non-compete for immediate signature at the start of employment — without the requisite advance notice — renders the agreement unenforceable.
This requirement applies to agreements entered into after January 1, 2022. It applies both to agreements signed at the inception of employment and to new or materially modified restrictive covenants presented to existing employees during the employment relationship.
What Counts as Adequate Consideration
The 2022 amendments codified the consideration standard for restrictive covenants, which had previously been the subject of significant litigation. Under the current statute, adequate consideration for a post-employment covenant not to compete or not to solicit includes:
- Initial employment: An offer of employment to a new hire constitutes adequate consideration when the agreement is signed before or at the commencement of employment.
- Continued employment: For existing employees, continued employment constitutes adequate consideration only if the employment continues for at least two years after the covenant is signed, or if the employer provides other independent consideration such as a bonus, a raise, or a promotion.
- Other independent consideration: A signing bonus, an increase in pay, or an enhanced severance package can constitute adequate consideration for agreements presented to current employees.
The practical significance of the two-year continued-employment standard is substantial. An employer who presents a non-compete to a current employee and provides no additional consideration beyond continued employment must be prepared for the agreement to be challenged if employment ends within two years of signing.
How Illinois Enforces the Law
The 2022 amendments created an enforcement mechanism that distinguishes Illinois from many other states. The Illinois Attorney General is empowered to investigate employer practices and bring civil actions against employers who require employees to sign non-compete or non-solicitation agreements that violate the statute.
An employer found to have violated the Act may be required to:
- Void any unlawful agreement;
- Pay a civil penalty of up to $10,000 per violation for repeat or willful violations; and
- Reimburse employees for attorney’s fees and costs incurred in challenging an unlawful agreement.
Beyond state enforcement, employees retain the right to bring private actions to void unlawful agreements and recover fees. Illinois courts also have statutory authority to modify overly broad agreements — the “blue pencil” doctrine — rather than voiding them entirely, though this is discretionary and not guaranteed.
For a broader discussion of business litigation in Illinois, see our overview of commercial dispute resolution services.
What Employers Should Include in 2026
An Illinois non-compete agreement that is drafted for enforceability in 2026 should address the following elements:
- Salary confirmation: The agreement should confirm the employee’s compensation and verify it exceeds the applicable statutory threshold at the time of signing.
- Written attorney consultation notice: The agreement should include an acknowledgment that the employee was advised to consult with an attorney and provided the required 14-day review period.
- Consideration recital: If the agreement is presented to an existing employee, the consideration should be expressly identified and should be something more than continued employment alone.
- Defined scope: The restriction must be no greater than reasonably necessary to protect a legitimate business interest, which the statute identifies as including trade secrets, confidential information, and customer relationships.
- Geographic and temporal limitations: Overly broad restrictions — covering the entire United States for five years, for example — are more likely to be challenged and potentially voided or modified by a court.
If your business operates in a regulated industry with unique competitive concerns, standard form agreements may not adequately protect your interests. Contact our team to schedule a consultation on your specific circumstances.
Frequently Asked Questions
Is my Illinois non-compete agreement from before 2022 still valid?
Agreements entered before January 1, 2022 are generally evaluated under the prior common law framework. However, if those agreements are renewed or materially modified, the new statutory requirements apply. Courts will also scrutinize pre-2022 agreements for reasonableness in scope, geographic reach, and duration.
Can an Illinois employer enforce a non-compete against a part-time employee?
The salary thresholds apply to actual earnings, not to employment status. A part-time employee who earns more than $75,000 annually can still be subject to an enforceable non-compete. The key factor is compensation, not hours worked.
What is the difference between a non-compete and a non-solicitation agreement in Illinois?
A non-compete agreement restricts an employee from working for competitors or starting a competing business. A non-solicitation agreement restricts the employee from soliciting the employer’s customers or other employees. Illinois law treats these differently — non-solicitation agreements have a lower salary threshold ($45,000 vs. $75,000) and are generally viewed as less restrictive.
Next Steps
Illinois non-compete law has changed meaningfully in recent years, and the salary thresholds, notice requirements, and consideration standards create real risks for employers who rely on outdated agreements. Whether you are reviewing an existing agreement or drafting a new restrictive covenant, the details matter.
Howard East Law Firm advises Illinois businesses on employment agreements, business disputes, and regulatory compliance. Contact us to schedule a consultation.
Attorney Advertising. This content is for general informational purposes and does not constitute legal advice. No attorney-client relationship is formed by reading this article. Illinois non-compete law is fact-specific — consult a qualified attorney in your jurisdiction before relying on this information.
