Illinois Non-Compete Laws (2026): Are Non-Competes Enforceable?

Illinois does not ban non-competes, but it restricts them more than most states. Under the Illinois Freedom to Work Act (820 ILCS 90), a non-compete is void unless the employee earns more than $75,000 a year, the employer gave written advice to see a lawyer and 14 days to review it, and the covenant passes a five-part reasonableness test. The Illinois Supreme Court's decision in Reliable Fire Equipment Co. v. Arredondo, 2011 IL 111871, set the "totality of the circumstances" approach that the Act now writes into statute.

For how other states treat these agreements, see our non-compete laws by state guide.

Information last verified on 2026-10-06. This article has not been reviewed by a licensed lawyer.

Jurisdiction scope: This article covers Illinois law on employee non-compete and non-solicitation covenants under the Illinois Freedom to Work Act (820 ILCS 90) and Illinois Supreme Court case law, with a short note on the federal FTC rule. It does not cover trade-secret claims (see Illinois trade secret laws), severance pay (see Illinois severance pay laws), or covenants made when a business or ownership interest is sold.

Are non-competes enforceable in Illinois?

Some are. Illinois sits between states that ban non-competes and states that enforce any reasonable one. A covenant has to clear the Act's gates (an earnings floor, notice and review time, and the industry exclusions below) and then pass the enforceability test in Section 15.

Section 15 reads: "A covenant not to compete or a covenant not to solicit is illegal and void unless (1) the employee receives adequate consideration, (2) the covenant is ancillary to a valid employment relationship, (3) the covenant is no greater than is required for the protection of a legitimate business interest of the employer, (4) the covenant does not impose undue hardship on the employee, and (5) the covenant is not injurious to the public" (820 ILCS 90/15).

Earning more than the threshold does not make a non-compete valid by itself. It only means the employer was allowed to enter into one; the covenant still has to satisfy Section 15 and the notice rule in Section 20.

How courts judge a legitimate business interest

In Reliable Fire Equipment Co. v. Arredondo, 2011 IL 111871, the Illinois Supreme Court held that an employee non-compete is judged by a three-prong reasonableness test, of which the employer's legitimate business interest remains a part, looking at the totality of the circumstances rather than a list of specific named factors. The court reversed the lower-court judgments and sent the case back.

Section 7 of the Act now puts that totality-of-the-circumstances approach into the statute. Among the circumstances it names are "the time restrictions, the place restrictions, and the scope of the activity restrictions" (820 ILCS 90/7). The Act sets no maximum length and no geographic limit, so a court weighs duration and territory as part of this review rather than against a fixed cap.

The Illinois non-compete salary threshold

An employer cannot enter into a non-compete with an employee whose earnings are at or below the statutory floor. The statute says: "No employer shall enter into a covenant not to compete with any employee unless the employee's actual or expected annualized rate of earnings exceeds $75,000 per year" (820 ILCS 90/10). Because the word is "exceeds," an employee earning exactly $75,000 does not clear the floor.

The floors rise in fixed steps written into the statute. They are not tied to inflation.

"Earnings" means compensation reflected, or expected to be reflected, as wages, tips and other compensation on your IRS Form W-2, including earned salary, earned bonuses, earned commissions and other taxable compensation, plus elective deferrals such as 401(k), 403(b), flexible spending, health savings and commuter deductions (820 ILCS 90/5).

You may see older sources describe an Illinois rule tied to an hourly wage. The current statute uses the annual earnings floors above.

Notice, review time and consideration

14 days and written advice to see a lawyer

A non-compete or non-solicit is illegal and void unless "(1) the employer advises the employee in writing to consult with an attorney before entering into the covenant and (2) the employer provides the employee with a copy of the covenant at least 14 calendar days before the commencement of the employee's employment or the employer provides the employee with at least 14 calendar days to review the covenant" (820 ILCS 90/20). You may choose to sign before the 14 days run out.

Adequate consideration

The first element of Section 15 is adequate consideration. The Act defines it as either (1) at least 2 years of employment after you signed the agreement, or (2) other consideration adequate to support the covenant, which can be employment plus additional professional or financial benefits, or professional or financial benefits that are adequate by themselves (820 ILCS 90/5).

Who is exempt from non-competes in Illinois

The construction rule took effect January 1, 2025, through Public Act 103-921. The union rule covers non-competes only; the statute's text for public-sector union members does not mention non-solicits.

The mental health rule, added by Public Act 103-915, covers licensees under the Clinical Psychologist Licensing Act, the Clinical Social Work and Social Work Practice Act, the Marriage and Family Therapy Licensing Act, the Nurse Practice Act, and the Professional Counselor and Clinical Professional Counselor Licensing and Practice Act. "First responders" means current or former emergency medical services personnel, firefighters and law enforcement officers, as broadened by Public Act 103-1062.

Outside the Freedom to Work Act, Illinois has separate rules for broadcast employees (820 ILCS 17) and for agency nurses and certified nurse aides on temporary assignments (225 ILCS 510/14), shown in the table above. Lawyers are covered by Illinois Rule of Professional Conduct 5.6, which bars a lawyer from offering or making a partnership, shareholders, operating, employment or similar agreement that restricts a lawyer's right to practice after the relationship ends, except an agreement concerning benefits upon retirement. We did not search for separate rules for physicians or veterinarians.

If you are laid off or fired

The Act has one termination rule, and it is narrow. A non-compete or non-solicit is void for an employee who is terminated, furloughed or laid off as a result of business circumstances or governmental orders related to the COVID-19 pandemic, "or under circumstances that are similar to the COVID-19 pandemic," unless enforcement includes "compensation equivalent to the employee's base salary at the time of termination for the period of enforcement minus compensation earned through subsequent employment during the period of enforcement" (820 ILCS 90/10).

The statute does not define what counts as similar circumstances, and we did not find a court decision deciding whether an ordinary layoff qualifies. Outside that rule, the Act does not treat a firing differently from a resignation; the general Section 15 test applies either way. For how Illinois employment ends in general, see Illinois at-will employment laws.

What a court can do with an overbroad non-compete

Illinois gives judges discretion rather than a fixed blue-pencil rule. Section 35 says extensive judicial reformation may be against public policy and a court may refrain from wholly rewriting a contract, but "a court may, in its discretion, choose to reform or sever provisions of a covenant not to compete or a covenant not to solicit rather than hold such covenant unenforceable" (820 ILCS 90/35).

In deciding whether to reform, the court considers the fairness of the restraints as written, whether the original restriction reflects a good-faith effort to protect a legitimate business interest, the extent of the reformation needed, and whether the parties included a clause authorizing modification (820 ILCS 90/35).

Attorney's fees and Attorney General enforcement

If an employer sues or brings an arbitration claim to enforce a non-compete or non-solicit and the employee prevails, "the employee shall recover from the employer all costs and all reasonable attorney's fees regarding such claim" (820 ILCS 90/25). The court or arbitrator may also award other appropriate relief.

The Illinois Attorney General may investigate and sue when it has reasonable cause to believe a person or entity "is engaged in a pattern and practice prohibited by this Act" (820 ILCS 90/30). Available relief includes damages to the State, restitution, an injunction, and a civil penalty of up to $5,000 for each violation or $10,000 for each repeat violation within 5 years. Each violation for each person subject to an unlawful agreement counts separately.

The Illinois Department of Labor does not enforce the Act, according to its fiscal note on HB3213. Employees raise the Act in court or arbitration.

Non-solicits, confidentiality agreements and trade secrets

A "covenant not to solicit" under the Act restricts soliciting the employer's employees, or soliciting or interfering with its clients, prospective clients, vendors, suppliers or other business relationships. It needs earnings above the non-solicit floor and must meet the same Section 15 test and Section 20 notice rule (820 ILCS 90/5, 90/10).

The Act's definition of a non-compete also covers an agreement that by its terms imposes adverse financial consequences on a former employee who competes after the job ends, such as a clause forfeiting pay or benefits (820 ILCS 90/5).

The Act's definition of a non-compete expressly excludes non-solicits, confidentiality agreements, trade-secret and invention non-use or non-disclosure agreements, invention assignment agreements, covenants made when buying or selling a business's goodwill or an ownership interest, paid notice-period clauses during which you stay employed, and agreements not to reapply to the same employer (820 ILCS 90/5). Confidentiality and trade-secret obligations survive whether or not a non-compete is valid; trade-secret protection is a separate body of law covered on our Illinois trade secret laws page.

Choice of law and out-of-state agreements

The Freedom to Work Act has no choice-of-law or forum-selection provision. A pending bill, HB3213, would make covenants void regardless of where they were signed; it has not passed.

The Act's current rules apply to covenants entered into after the effective date of Public Act 102-358, which took effect January 1, 2022 (820 ILCS 90/5). This page describes those rules; if your agreement is older, a lawyer can tell you which version of Illinois law applies to it.

Pending Illinois non-compete bills

These bills were pending in the 104th General Assembly, and none was law, as of the last bill actions we read. We did not check actions after April 2026.

• HB3213 (full ban): would make all employee non-competes and non-solicits void and repeal Sections 7, 20 and 35. Last action read: April 17, 2026, re-referred to the Rules Committee.
• HB4565 (health care facilities): would make non-competes and non-solicits unenforceable for health care professionals employed by health care facilities. It passed the House Labor and Commerce Committee as amended, 18-9, on March 19, 2026, and was re-referred to the Rules Committee on April 17, 2026.
• HB4221 (health care professionals): would make non-competes and non-solicits unenforceable for health care professionals; last action read March 27, 2026, re-referred to the Rules Committee.
• HB1642 (earnings floor): would change the non-compete and non-solicit earnings floors; last action read March 27, 2026, re-referred to the Rules Committee.

The FTC rule and Illinois non-competes

The FTC's nationwide non-compete rule never took effect. A federal court in Texas set it aside on August 20, 2024 (Ryan, LLC v. FTC, No. 3:24-CV-00986-E, N.D. Tex.), the FTC voted on September 5, 2025 to dismiss its appeals, and the FTC removed the rule from the Code of Federal Regulations on February 12, 2026. The FTC still acts case by case, for example approving a final order on June 22, 2026 that required a pest-control company to stop enforcing non-competes. Illinois law, not the FTC rule, governs Illinois agreements. More detail: FTC non-compete ban struck down and our non-compete laws by state guide.

If you have been asked to sign

Illinois gives you 14 days and written advice to see a lawyer for a reason: whether a specific covenant holds up depends on your earnings, the consideration, its time, place and activity limits, and the employer's interest. A lawyer licensed in Illinois can review your agreement against Sections 10, 15 and 20.

Related

• Non-compete laws by state
• Illinois trade secret laws
• Illinois severance pay laws
• Illinois at-will employment laws
• FTC non-compete ban struck down

Disclaimer: This article provides general legal information about Illinois non-compete law under the Illinois Freedom to Work Act (820 ILCS 90), not legal advice. The information was last verified on 2026-10-06. For advice about a specific agreement, contact a legal aid office or a lawyer licensed in Illinois; the Illinois Attorney General enforces the Act against patterns and practices of violations.

Last updated: 2026-10-06.

Frequently Asked Questions

Are non-competes enforceable in Illinois?

Some are. Under the Illinois Freedom to Work Act, a non-compete is void unless the employee earns more than $75,000 a year, received written advice to see a lawyer and 14 days to review it, and the covenant passes the five-part test in 820 ILCS 90/15.

What is the salary threshold for a non-compete in Illinois?

Earnings must exceed $75,000 a year, rising to $80,000 on January 1, 2027, $85,000 in 2032 and $90,000 in 2037 (820 ILCS 90/10). Earnings of exactly $75,000 do not clear the floor.

What is the salary threshold for a non-solicitation agreement in Illinois?

Earnings must exceed $45,000 a year, rising to $47,500 on January 1, 2027 (820 ILCS 90/10).

How long do I have to review a non-compete in Illinois?

The employer must give you at least 14 calendar days to review the covenant, or a copy at least 14 days before you start, and must advise you in writing to consult a lawyer; otherwise the covenant is void (820 ILCS 90/20). You can choose to sign sooner.

Is a non-compete enforceable if I am fired in Illinois?

The Act voids a covenant for a worker terminated, furloughed or laid off because of COVID-19 circumstances or similar circumstances unless the employer pays base salary for the enforcement period, minus later earnings (820 ILCS 90/10). Otherwise the Act has no separate rule for firings, and the five-part test applies.

Can an Illinois court rewrite an overbroad non-compete?

It may, in its discretion, reform or sever provisions instead of voiding the covenant, after weighing the fairness of the original terms, good faith, how much rewriting is needed, and any modification clause (820 ILCS 90/35).

Who pays attorney's fees in an Illinois non-compete lawsuit?

If the employer sues or arbitrates to enforce the covenant and the employee prevails, the employee recovers all costs and reasonable attorney's fees (820 ILCS 90/25).

Can construction workers be bound by non-competes in Illinois?

Generally no. Non-competes and non-solicits are void for individuals employed in construction, except those who primarily perform management, engineering or architectural, design or sales functions, or who are owners, partners or shareholders (820 ILCS 90/10).

Did Illinois ban non-competes in 2026?

No. HB3213, which would ban all employee non-competes and non-solicits, was re-referred to the House Rules Committee on April 17, 2026 and was not law as of the last action we read.

Does the FTC non-compete ban apply in Illinois?

No. A federal court set the FTC rule aside in August 2024 and the FTC removed it from the Code of Federal Regulations on February 12, 2026, so Illinois non-competes are governed by 820 ILCS 90.