Non-Compete Agreements in Illinois: Are They Legally Enforceable in 2026?

Non-compete agreements in Illinois are not what they used to be. If you signed one five years ago, or if your employer is asking you to sign one today, the rules have shifted significantly — and they keep shifting.Illinois has been steadily tightening its grip on restrictive covenants since 2017, with the most dramatic changes coming through the Illinois Freedom to Work Act (IFWA). The 2022 amendments to that law set clear income thresholds, introduced new procedural requirements, and handed employees considerably more leverage when fighting back against agreements they believe are unfair.

Now, in 2026, a proposed bill — Illinois HB3213 — is sitting in committee and, if passed, would effectively ban most non-compete agreements across the state entirely. That has created a lot of confusion for both workers and business owners trying to figure out where they stand right now.

Here’s what you actually need to know: as of early 2026, non-compete agreements in Illinois are still legally enforceable — but only under specific conditions, only for workers above a certain income level, and only when drafted to meet strict legal standards. Miss any of those requirements, and the agreement is likely void.

This guide walks through every major rule in plain language, covers the proposed changes on the horizon, and explains what you should do if you’re currently bound by a non-compete clause — or thinking about asking someone to sign one.

What Are Non-Compete Agreements and Why Do They Matter in Illinois?

A non-compete agreement (also called a covenant not to compete) is a contract clause that restricts an employee from working for a competitor, starting a competing business, or taking certain jobs within a specific geographic area for a set period of time after leaving their employer.

In theory, they protect legitimate business interests. Employers use them to guard trade secrets, client relationships, and proprietary information. In practice, they’ve been widely criticized for trapping workers in jobs, suppressing wages, and limiting career mobility — even in industries where they have no real business purpose.

Illinois has historically been more skeptical of these agreements than many other states. Courts here have never looked favorably on non-competes as a blanket rule. The state’s legislature took formal action starting in 2017 and has been strengthening protections for employees ever since.

Non-solicitation agreements — which prevent employees from reaching out to former clients or recruiting colleagues — are regulated under the same framework, though with slightly different income thresholds.

The Illinois Freedom to Work Act: The Foundation of Current Law

The Illinois Freedom to Work Act (820 ILCS 90/) first took effect in 2017 and was substantially amended in 2022 to regulate the use of non-compete and non-solicitation agreements. These agreements restrict an employee’s ability to work for competitors, solicit former clients, or recruit co-workers after leaving a company.

The 2022 amendments, which went into effect on January 1, 2022, fundamentally changed how non-compete agreements in Illinois are evaluated. They introduced:

• A clear income threshold below which non-compete agreements are automatically void
• Mandatory consideration requirements
• Procedural safeguards like a formal review period
• Specific industry exemptions
• Limitations tied to how employment ended

This law applies to any non-compete agreement entered into on or after January 1, 2022. Agreements signed before that date are still governed by Illinois common law principles, though courts still evaluate them for reasonableness.

Who Can and Cannot Be Subject to a Non-Compete Agreement in Illinois Right Now?

The Income Threshold Rule

This is probably the most important thing to understand about non-compete agreements in Illinois in 2026.

Non-compete agreements cannot be used if an employee earns less than $75,000 per year. This salary baseline increases in 2027 and every 5 years after that. Non-solicitation agreements cannot be used if the employee earns less than $45,000 per year, and this threshold also increases in 2027 and every 5 years after that.

What that means practically:

• If you earn under $75,000/year, any non-compete your employer asks you to sign is void and unenforceable under Illinois law
• If you earn under $45,000/year, both non-compete and non-solicitation agreements are off the table
• If you earn over $75,000/year, a non-compete can be enforceable — but only if it meets all other requirements

These thresholds are set to increase automatically in 2027, so employers who draft agreements today should build flexibility into their policies.

Industries Where Non-Competes Are Automatically Banned

Beyond income, certain categories of workers cannot be required to sign non-compete or non-solicitation agreements regardless of what they earn:

Illinois prohibits non-compete agreements for employees working in construction, working under a collective bargaining agreement, or who were laid off or furloughed due to COVID-19 or similar circumstances without appropriate compensation.

Additionally, some employees working in construction can’t be required to sign a non-compete or non-solicitation agreement, regardless of whether they are part of a union. Non-compete and non-solicitation agreements with a licensed mental health professional are not enforceable if the agreement would cause an increase in cost or difficulty for a veteran or first responder seeking mental health services.

There are also specific rules for nurse staffing agencies, which cannot enforce non-competes against nurses and certified nurse aides assigned to a healthcare facility for less than two years.

What Makes a Non-Compete Agreement Enforceable in Illinois?

Even if an employee earns more than $75,000 and doesn’t fall into an exempt category, that doesn’t automatically mean their non-compete agreement will hold up in court. Illinois law requires that every enforceable restrictive covenant meet a multi-factor test.

1. Adequate Consideration

To be enforceable, a restrictive covenant must be supported by “adequate consideration.” Illinois courts interpret this to mean at least two years of continued employment or other sufficient professional or financial benefits (820 ILCS 90/5).

This is a sticking point that trips up many employers. Simply offering someone a job — or a small cash payment — is typically not enough. If an employee is asked to sign a non-compete mid-employment, without receiving meaningful new benefits, the agreement may lack adequate consideration.

2. The 14-Day Review Period

Employers must provide the employee with a copy of the agreement at least 14 days before the commencement of employment, or provide the employee with at least 14 days to review the agreement. An employer is in compliance if the employee voluntarily elects to sign the agreement before the expiration of the 14-day period.

This is a procedural rule, but courts take it seriously. An agreement slipped into an offer letter with a “sign by tomorrow” deadline is unlikely to survive a challenge.

3. Written Notice to Consult an Attorney

Employers must advise an employee in writing to consult with a lawyer before agreeing to a non-compete or non-solicitation agreement.

This notice requirement is often overlooked by employers who draft their own agreements without legal help. Missing this step can void the agreement outright.

4. Reasonableness in Scope

Illinois courts enforce non-compete agreements only if they are: reasonable; supported by adequate consideration; ancillary to a valid employment relationship; no greater than required for the protection of a legitimate business interest of the employer; not imposing an undue hardship on the employee; and not harmful to the public.

A contract that prevents the employee from ever working in the same industry anywhere in the world is too restrictive. If that kind of non-compete agreement was challenged in court, a judge would likely call it unreasonable and not enforce it. However, a non-compete agreement for two years that restricts the employee from doing the same job in the same region as their current job is much more reasonable.

Illinois courts look at the totality of the circumstances. A non-compete clause that is geographically unlimited, lasts five years, or covers job functions entirely unrelated to what the employee actually did will almost certainly be struck down.

5. Legitimate Business Interest

This is a qualitative standard that courts analyze on a case-by-case basis. Whether an employer has a legitimate business interest worthy of protection depends on the totality of the circumstances. Illinois courts consider facts including whether the employer’s customer relationships are near permanent, whether the employee acquired confidential information while working for the employer, and whether the type of activity restriction, its duration, and its geographic scope are appropriately tailored to the employer’s interest.

A non-compete agreement for a warehouse worker who has no access to trade secrets or client relationships is unlikely to serve a legitimate business interest. A non-compete for a senior software engineer with access to proprietary algorithms and key client relationships is a different story.

What Happens If an Employer Terminates You — Can They Still Enforce a Non-Compete?

This is one of the most contested areas of non-compete law in Illinois, and the answer is genuinely complicated.

The Freedom to Work Act leaves several important questions about the enforceability and limitations of non-compete agreements unanswered. One of those questions is: may an employer successfully enforce a non-compete agreement against a former employee if the employee was not terminated “for cause”? The answer is “it depends.”

Under Illinois common law, courts have generally allowed employers to enforce non-competes even after a termination without cause, as long as the agreement itself was valid and the termination was done in good faith. However, some courts have found that terminating an employee without cause — and then trying to hold them to a non-compete — constitutes bad faith.

Employers usually cannot enforce these agreements if they lay off employees for business reasons related to the Covid-19 pandemic or under similar circumstances. To do this, the employer has to pay the employee their base salary for the non-compete or non-solicitation period minus the income they get from their new job.

If you were let go through a layoff and your employer is now threatening to enforce your non-compete clause, this is exactly the kind of situation where speaking with an employment attorney is critical.

The FTC Non-Compete Ban: What Happened and What It Means for Illinois

You may have heard about the Federal Trade Commission’s attempt to ban non-compete agreements nationwide. Here’s where that stands.

In April 2024, the FTC issued its Non-Compete Clause Rule (16 C.F.R. Part 910), which would have banned most non-competes nationwide. In August 2024, a federal judge struck it down, and the FTC recently gave up its appeals.

But that doesn’t mean employers are free to use non-competes however they like. The FTC has made clear that it will still go after what it sees as “anticompetitive” non-competes on a case-by-case basis. And in Illinois, state law continues to strictly regulate how and when non-competes can be used.

For Illinois workers and employers, the practical impact of the FTC rule’s death is limited. The state’s own Illinois Freedom to Work Act provides substantial protection regardless of what happens at the federal level.

Illinois HB3213: The Proposed Non-Compete Ban Coming in 2026

This is where things get genuinely interesting — and where a lot of the current confusion originates.

Illinois HB3213 amends the Illinois Freedom to Work Act to comprehensively prohibit non-compete and non-solicitation agreements in employment contracts. The legislation declares that any covenant not to compete or not to solicit entered into on or after January 1, 2026, will be illegal and void, even if the contract was signed outside of Illinois.

The bill maintains existing exemptions for certain types of agreements like confidentiality clauses, trade secret protections, and invention assignment agreements. Additionally, the bill explicitly prohibits employers from attempting to enforce these now-void contracts, even if they were originally signed in another state.

As of April 2026, however, HB3213 has not been signed into law. The bill had a House Labor & Commerce Committee hearing on February 25, 2026. It is still moving through the legislative process.

What this means practically: do not assume HB3213 is current law. If you or your employer is relying on this bill as the reason to void an existing agreement, you need to verify the current legislative status. The current governing statute remains the Illinois Freedom to Work Act with its 2022 amendments.

That said, the fact that this bill has advanced to committee hearings signals a clear legislative direction. Illinois is moving steadily toward broader restrictions on non-compete agreements, and employers who are still drafting broad, aggressive covenants are doing so at their own risk.

Non-Solicitation Agreements in Illinois: A Separate but Related Issue

Many people conflate non-compete agreements with non-solicitation agreements, but they’re distinct legal instruments with different rules under Illinois law.

A non-solicitation agreement (or “covenant not to solicit”) prevents a former employee from:

• Reaching out to the employer’s clients or customers for competitive purposes
• Recruiting former colleagues to join a new employer or competing business
• Poaching key vendor or partner relationships

A covenant not to solicit prohibits an employee from approaching clients, customers, or other employees of their former employer for competitive purposes.

The key distinction in Illinois law is the income threshold: non-solicitation agreements are prohibited for anyone earning $45,000 or less per year, compared to the $75,000 threshold for full non-compete agreements. All other requirements — adequate consideration, 14-day review period, written attorney consultation notice, and reasonableness — apply equally to both types of agreements.

What Illinois Courts Look At When Evaluating Non-Compete Cases

If a non-compete agreement in Illinois ends up in court, here’s what judges are actually looking at:

Geographic scope — Is the restricted territory reasonable given the employer’s actual market? A Chicago-based employer restricting a former employee from working anywhere in the country is going to have a hard time justifying that.

Duration — Most Illinois courts view anything over two years with skepticism. Shorter restrictions tied to genuinely sensitive roles are more defensible.

Scope of activities — Does the restriction cover only the specific work the employee was doing, or does it effectively prevent them from working in their field entirely?

The employee’s role — Senior executives with access to strategic plans, high-value client relationships, and trade secrets get more scrutiny from courts than rank-and-file workers.

Who ended the relationship — Courts are more sympathetic to employees who were terminated without cause and then faced with an aggressive non-compete enforcement action.

Under Illinois law, the employer bears the burden of proof when enforcing a non-compete. That’s significant. It means employers can’t simply wave a signed agreement in front of a judge and demand enforcement. They have to prove every element of enforceability.

Practical Advice for Employees in Illinois

If you’re an employee dealing with a non-compete agreement in Illinois, here’s a realistic assessment of your options:

Before you sign:

• Take the full 14 days to review the agreement — you’re legally entitled to it
• Talk to an employment attorney, even for a one-hour consultation
• Ask specifically what the employer considers a “legitimate business interest” in your role
• Pay close attention to geographic scope and duration; narrow those terms if you can
• If you earn under $75,000, you don’t have to sign — the agreement is void

After you’ve signed:

• Understand exactly what activities are restricted and for how long
• If your employment ends — especially through a layoff — ask an attorney whether the agreement is still enforceable
• Document everything: your salary, how your employment ended, and how the agreement was presented to you

If your employer threatens enforcement:

• Don’t assume the threat is legally valid
• An attorney can often identify fatal procedural or substantive defects in the agreement before any lawsuit is filed
• Illinois courts have repeatedly found non-compete agreements unenforceable on technical grounds alone

For authoritative guidance on your rights under state law, the Illinois Legal Aid Online resource provides clear explanations of current protections.

Practical Advice for Employers in Illinois

If you’re an employer relying on non-compete agreements in Illinois to protect your business, the current environment requires a serious rethink of how those agreements are drafted and deployed.

Audit your existing agreements:

• Any agreement signed after January 1, 2022 that doesn’t meet IFWA requirements is likely already void
• Agreements with employees earning under $75,000 are unenforceable, period
• Look at whether you provided the 14-day review period and attorney consultation notice

Draft narrowly:

• Broad, sweeping non-compete clauses are more likely to be thrown out entirely than narrowed by a court
• Illinois courts historically have not “blue penciled” (rewritten) overly broad agreements — they’ve simply voided them
• Restrict only what you actually need to protect: specific clients, specific technology, specific markets

Understand what you can still protect:

• Confidentiality agreements and trade secret protections remain fully available and are not restricted by the IFWA
• Non-disclosure agreements (NDAs) covering proprietary processes, pricing, and customer data remain a powerful tool even if non-competes are eventually banned
• Invention assignment agreements are also explicitly preserved

Monitor HB3213:

• If this bill passes, any non-compete or non-solicitation agreement signed after the effective date will be void by default
• Employers who plan around this possibility now — by leaning harder on NDAs and non-disclosure protections — will be better positioned

For Illinois businesses, non-competes are still available, but only if they’re carefully drafted and used with the right employees. The FTC’s nationwide ban is gone, but the agency is still watching, and Illinois law continues to enforce strict standards. If your business relies on non-competes, this is the time to audit and update your agreements to make sure they’ll hold up in court.

The Economic Innovation Group’s State Noncompete Law Tracker is a useful resource for following how Illinois and other states are evolving their non-compete laws in real time.

Confidentiality Agreements vs. Non-Compete Agreements in Illinois

It’s worth being clear about what employers can still do even as non-compete agreements face growing restrictions.

Confidentiality or non-disclosure agreements (NDAs) are entirely separate from non-compete agreements. They prohibit an employee from sharing specific confidential information — client data, financial records, proprietary processes — without restricting where the employee can work. These are not covered by the IFWA and remain fully enforceable in Illinois.

For most employers, a well-drafted NDA combined with an invention assignment agreement provides adequate protection without the legal risk that comes with aggressive non-compete clauses. The business information you actually care about protecting — pricing structures, client lists, software architecture — can be protected through these instruments without restricting a person’s livelihood.

The key distinction is this: a non-compete agreement restricts what work you can do and where. A confidentiality agreement restricts what information you can share. Courts in Illinois, and increasingly across the country, are far more willing to uphold the latter.

Frequently Asked Questions About Non-Compete Agreements in Illinois

Can my employer force me to sign a non-compete in Illinois? If you earn over $75,000 per year and are not in a protected industry, an employer can ask you to sign a non-compete agreement. However, you’re entitled to 14 days to review it and written notice to consult a lawyer. The agreement must also meet all IFWA requirements to be enforceable.

Is my non-compete void if I was laid off? Potentially. If you were laid off for business reasons — especially those related to pandemic-like conditions — your employer faces significant restrictions in trying to enforce a non-compete. Consult an attorney.

What if I signed a non-compete before 2022? Agreements signed before January 1, 2022 are governed by Illinois common law, not the IFWA. Courts will evaluate them for reasonableness, adequate consideration, and legitimate business interest.

Can my Illinois non-compete be enforced if I move to another state? This is genuinely complex and depends on the choice-of-law provisions in your agreement and the laws of your new state. Illinois HB3213, if passed, would explicitly void non-compete agreements regardless of where they were signed or where employment is maintained.

What can I do if my employer is threatening to enforce an unenforceable non-compete? Consult an employment attorney immediately. Many employers send cease-and-desist letters knowing the agreement may not hold up in court. An attorney can assess whether the threat is credible and help you respond appropriately.

Conclusion

Non-compete agreements in Illinois are at a critical legal inflection point in 2026. The Illinois Freedom to Work Act currently prohibits these agreements for workers earning under $75,000 per year, requires strict procedural compliance, and demands that every enforceable agreement serve a genuine and proportionate business purpose. Meanwhile, the proposed Illinois HB3213 — still moving through the legislature — signals that the state may soon go even further, potentially voiding most new non-compete and non-solicitation agreements entirely.

For employees, the core message is to know your rights before you sign, document how any agreement was presented to you, and don’t assume a signed non-compete clause is automatically enforceable just because it exists on paper. For employers, the trend is unmistakable: relying on broad, one-size-fits-all non-compete agreements in Illinois is increasingly risky, and investing in narrowly tailored confidentiality agreements, trade secret protections, and NDAs is now the more legally sound approach to protecting genuine business interests.