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Illinois Cracks Down on Noncompetes for Low-Wage Workers

Should the teenage workers who make your deli sandwich (or bus tables or perform other routine entry-level work) be able to move from one job to another without running afoul of a noncompete? The court of public opinion thought so, as evidenced by the controversy that erupted over the Jimmy Johns sandwich chain’s much-publicized business plan that even low-level workers should be subjected to post-employment restrictions, as we reported here.

Now the Illinois General Assembly has stepped in with the new Illinois Freedom to Work Act to outlaw covenants-not-to-compete for low-wage workers.

Effective January 1, 2017, an employer and a low-wage employee are prohibited from entering into any agreement that restricts the employee from performing work for another employer for a specified period of time or that restricts the employee from working in a particular geographic area or working for another employer that is similar to the low-wage employee’s work for the employer.

A “low-wage” employee is defined as someone who earns $13 per hour or the local, state or federal minimum wage if it is greater than $13. For such workers, an agreement with restrictive covenants as described in the act will be “illegal and void.”

So, entry-level workers will soon be free to job hop around Illinois without fear of a looming lawsuit over post-employment restrictive covenants.

© 2019 BARNES & THORNBURG LLP

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