February 5, 2023

Volume XIII, Number 36

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February 03, 2023

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February 02, 2023

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Governor Pritzker Signs Illinois Noncompete Legislation Into Law

On August 13, 2021, Illinois Governor JB Pritzker signed into law Senate Bill (SB) 672, an amendment to the Illinois Freedom to Work Act. While the law codifies substantive Illinois common law on restrictive covenants, it also sets forth new and important limitations and requirements regarding the use of noncompete and nonsolicitation agreements. For example, the law imposes salary thresholds limiting which employees can sign noncompete and nonsolicitation agreements, establishes a 14-day notice period for employees to review such agreements, allows recovery of attorneys’ fees and costs if an employee prevails in an enforcement lawsuit brought by an employer, and protects employees who are separated from employment due to COVID-19 (or similar circumstances). The law will take effect on January 1, 2022, and it will not apply retroactively.

Although the new law does not affect existing, signed noncompete and nonsolicitation agreements, employers may want to review their restrictive covenant implementation toolkit to ensure that after January 1, 2022, they enter into restrictive covenants with permitted employees. Employers may also want to determine whether to make substantive changes to their template agreements (evaluating, for example, whether to incorporate the statutory notice period into the agreements or to address the issue separately in side letters at the time of tendering such agreements).

© 2023, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved.National Law Review, Volume XI, Number 236

About this Author

Tobias Schlueter, Discrimination, Retaliation, Litigation, Chicago, Ogletree Deakins Law FIrm

Mr. Schlueter is a strategic advocate and litigator for businesses in employment (including discrimination, retaliation, wage & hour, ADA, FMLA etc.) and unfair competition matters (including restrictive covenants (non-compete, non-solicit and confidentiality), trade secrets, duties of loyalty, tortious interference, and conspiracy, etc.).  Mr. Schlueter has a proven track record in litigating high stakes matters involving temporary restraining orders and other injunctive relief.  He also has significant experience trying FINRA arbitration matters.  He is a member of the steering...

Christine Townsend, of counsel, Milwaukee
of Counsel

Christine counsels her clients on a full range of labor and employment issues. She has frequently represented employers in litigation, successfully obtaining preliminary injunctions in matters related to restrictive covenants and trade secrets. She also regularly advises clients on the legal aspects of personnel decisions, employment policies, and employment agreements.

She began her legal career as a litigator in the Intellectual Property department of a national firm’s Chicago office. Christine continued her career in the labor and employment...

Madeline Brown St. Louis Lawyer for Ogletree Deakins Nash Smoak & Stewart PC

Madeline is an associate in the firm’s St. Louis office. Madeline joined the firm in 2021 after receiving her J.D. from Indiana University Maurer School of Law.

While in school, Madeline served as articles editor for the Indiana Law Journal, a research assistant, and a member of the Student Steering Committee for the College of Labor and Employment Lawyers. Additionally, she gained experience as a summer associate at a national labor and employment firm and interned at a statewide hospital system in their corporate legal office.