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Illinois Passes Law Banning Noncompete Agreements for Low Wage Workers

Illinois recently became one of the first states to ban non-compete agreements for low wage workers when it passed the Illinois Freedom to Work Act. The law, which takes effect on January 1, 2017 and applies to agreements signed after that date, bars non-compete agreements for workers who earn the greater of 1) the Federal, State, or local minimum wage or 2) $13.00 an hour.  At present, because the State minimum wage is below $13.00 per hour, $13.00 an hour is the operative figure in Illinois.

Capitol, Illinois,While Illinois is one of the first states to enact this type of blanket ban on non-competes based on the employee’s salary status, in other states, including New Jersey and Maryland, legislation based on eligibility for unemployment compensation has been proposed. Moreover, as we have previously blogged, the New York Attorney General has sought to prohibit companies from agreeing to non-competes with low wage workers.  The White House has also weighed in on the issue of non-compete agreements for low wage workers, questioning whether they protect  legitimate business interests or instead merely hamper labor mobility.

In sum, the political winds are clearly blowing against non-compete agreements for low-wage workers. Employers should be wary of attempting to secure stability in their low wage workforce through non-compete agreements and employers in Illinois should review and, if necessary, revise their employment agreements in light of this new law.

©2020 Epstein Becker & Green, P.C. All rights reserved.National Law Review, Volume VI, Number 245

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About this Author

Peter Steinmeyer, Labor Attorney, Epstein Becker Law Firm
Member

PETER A. STEINMEYER is a Member of the Firm in the Labor and Employment practice of Epstein Becker Green and serves as the Chicago office Managing Shareholder. Practicing in all aspects of labor and employment law, he is also Co-Chair of the firm's Non-Competes, Unfair Competition and Trade Secrets Practice Group.

Mr. Steinmeyer advises clients on the enforcement and drafting of non-compete, non-solicitation, and employment agreements, litigates trade secret, non-compete, non-solicitation, raiding, and other restrictive covenant matters in...

312-499-1417
Matthew Savage Aibel, Epstein Becker Green, Trade Secrets Attorney, Breach of Non-Compete Agreements Lawyer
Associate

MATTHEW SAVAGE AIBEL is an Associate in the Litigation and Employment, Labor & Workforce Management practices, in the New York office of Epstein Becker Green.

Mr. Aibel:

  • Assists in the representation of clients in complex commercial litigation, business disputes, and breach-of-contract matters

  • Provides assistance with litigation matters involving the breach of non-competition and non-solicitation agreements, the misappropriation of trade secrets, and unfair competition

  • Assists in the representation of employers in federal and state court and in mediation and arbitration proceedings on labor and employment matters involving discrimination, harassment, retaliation, whistleblowing, and wage and hour disputes

  • Aids health care companies in litigation arising under ERISA and other related disputes

  • Advises employers about issues and policies related to social media and the online conduct of employees

Prior to joining Epstein Becker Green, Mr. Aibel served as a Legal Intern at the largest labor union representing officers of the New York City Police Department. In this role, he helped with state and federal litigation, collective bargaining issues, employee handbooks, and city administrative board hearings.

212-351-4814