Few areas of Illinois employment law have changed as quickly, or as completely, as the law governing non-compete agreements. For decades, enforceability in Illinois turned on common-law tests that lawyers argued about case by case. That changed when the Illinois Freedom to Work Act took effect on January 1, 2022, and any business still working from a pre-2022 template is likely working from a document the state no longer permits. Gaurav Mohindra, who advises Illinois businesses and executives on restrictive covenants, sees the same pattern repeatedly: agreements drafted under the old rules, handed to employees the new statute was written to protect, and never revisited.
The practical consequence is that a non-compete in Illinois is no longer just a contract question. It is a compliance question first, and a litigation question second. Employers and employees who understand the statutory framework before a dispute starts are in a far better position than those who read the Act for the first time in a demand letter.
The Earnings Thresholds: Where the Analysis Now Begins
The Freedom to Work Act, codified at 820 ILCS 90, draws bright lines based on earnings. A non-compete agreement is void and unenforceable against an employee whose actual or expected annualized earnings are $75,000 or less. The parallel threshold for non-solicitation covenants — agreements not to recruit coworkers or solicit customers — is $45,000 or less. These figures are scheduled to rise: on January 1, 2027, the non-compete threshold increases to $80,000 and the non-solicit threshold to $47,500, with further adjustments every five years.
Earnings, for this purpose, include salary, bonuses, commissions, and other compensation reported on an IRS Form W-2. That definition matters at the margins. An employee with a $68,000 base salary and $12,000 in expected commissions is not a sub-threshold employee, and an employer who looks only at base pay can misjudge enforceability from the start.
Above the thresholds, the Act preserves the common-law framework but codifies it. To be enforceable, a covenant must be supported by adequate consideration, ancillary to a valid employment relationship, no greater than required to protect a legitimate business interest, not harmful to the public, and not unduly burdensome on the employee. Illinois courts evaluate legitimate business interest on the totality of the circumstances — the near-permanence of customer relationships, access to confidential information, and the time and place restrictions involved — rather than any single factor.
The Notice Rules Employers Keep Missing
The Act also imposed procedural requirements that many employers still overlook. Before an employee signs, the employer must advise the employee in writing to consult with an attorney before entering the agreement, and must provide a copy of the covenant at least 14 calendar days before employment begins or give the employee at least 14 days to review it. An employer who skips these steps has handed the employee’s future lawyer a ready-made argument, regardless of how reasonable the restrictions are.
“The statute hands employees a review period and a right to be told to get a lawyer. Employers who treat that as red tape instead of a signal are the ones who end up testing void agreements in court,” says Gaurav Mohindra.
Remedies changed too. An employee who prevails in an action to enforce a non-compete can recover attorney’s fees from the employer, which has materially changed the economics of borderline enforcement cases. And while Illinois courts retain the power to reform an overbroad covenant — the so-called blue-pencil doctrine — the Act instructs courts to consider whether reformation is appropriate and warns that extensive reformation is disfavored. An employer who drafts aggressively and assumes a court will trim the agreement down to size is relying on discretion the statute tells judges to use sparingly.
“The Freedom to Work Act did not kill the Illinois non-compete, but it ended the era of the one-size-fits-all form. If your agreement predates 2022, it is not a shield. It is an exhibit,” says Gaurav Mohindra.
A Use Case: The Sales Manager and the Legacy Template
Consider a mid-sized Illinois distributor that promotes a warehouse supervisor into a sales management role paying $72,000 a year. Human resources pulls the company’s standard non-compete from a shared drive — the same form the company has used since 2016 — and the employee signs it on his first day in the new role, without written advice to consult counsel and without a 14-day review period. Eighteen months later he resigns and joins a competitor, and the company threatens suit.
On those facts, the company has problems at every level. The employee’s earnings fall below the $75,000 threshold, so the covenant is void under the Act no matter how it reads. The notice and review requirements were not satisfied. And if the company sues anyway and loses, it faces the employee’s attorney’s fees. A business that had audited its forms in 2022 — and used confidentiality and non-solicitation provisions calibrated to the statute for this pay band — would have had something real to enforce. The lesson is not that protection is unavailable; it is that protection now has to be designed, not assumed.
What Smart Employers and Employees Do Differently
For employers, the work is front-loaded: audit every restrictive covenant in the file against the current thresholds, calendar the January 2027 threshold increases, build the written-advice and 14-day review steps into onboarding, and match the tool to the risk — confidentiality and trade-secret protections for most employees, true non-competes reserved for the senior and highly compensated few whose roles justify them. For employees above the thresholds, the statute’s framework is a negotiation framework: duration, geography, the definition of competing activity, and what happens to the covenant if the employer ends the relationship are all live terms, and the 14-day review window exists precisely so that negotiation can happen.
“Most non-compete fights I see were won or lost at the drafting table, years before anyone resigned. The dispute just reveals what the document always was,” says Gaurav Mohindra.
The through line in Gaurav Mohindra‘s practice is that restrictive covenants reward precision and punish habit. Illinois law now tells both sides, in advance and in writing, exactly what the rules are. The businesses and executives who treat the Freedom to Work Act as a drafting checklist rather than a litigation surprise are the ones whose agreements hold up when they are finally tested.