Are employee non-compete agreements enforceable in Illinois?
Yes, but only if the covenant clears the statutory gates of the Illinois Freedom to Work Act and then survives the common-law reasonableness test. A covenant not to compete or not to solicit is illegal and void unless the employee received adequate consideration, the restraint is ancillary to a valid employment relationship, it is no greater than necessary to protect a legitimate business interest, it imposes no undue hardship, and it is not injurious to the public.
Illinois is not a ban state, but it regulates employee non-competes and non-solicits through several statutory gates. Since amendments effective January 1, 2022 (Public Act 102-358), these covenants are governed first by the Illinois Freedom to Work Act, 820 ILCS 90, which layers statutory earnings thresholds, a codified consideration rule, a notice requirement, fee-shifting, and Attorney General enforcement on top of Illinois's long-standing common-law reasonableness analysis. The Act applies to covenants entered on or after its effective date.
Clearing the statute is necessary but not sufficient: the covenant must also be reasonable under the three-prong rule of reason the Illinois Supreme Court restated in Reliable Fire Equipment Co. v. Arredondo . So the practical question in Illinois is layered — does the worker earn enough to be bound, was the covenant supported and properly noticed, and is the restraint reasonable on the facts.
This note reflects current enacted law as of the review date. Two bills introduced in the 104th General Assembly would change it — HB 3213 would prohibit covenants not to compete and not to solicit outright, and HB 1642 would raise the non-compete earnings threshold to $300,000 — but as of the review date both remained in committee and neither had been enacted, so they do not yet affect enforceability.
Sources for this answer
Primary law
A.1 820 ILCS 90/15820 ILCS 90/15 supports that a covenant not to compete or not to solicit is illegal and void unless it satisfies adequate consideration, ancillarity, the legitimate-business-interest limit, no undue hardship, and no public injury.
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.
See 820 ILCS 90/15.
Case law · 2011-12-01
A.2 Reliable Fire Equipment Co. v. ArredondoReliable Fire Equipment Co. v. Arredondo supports the Illinois three-prong rule of reason: a restrictive covenant ancillary to a valid employment relationship is reasonable only if it protects a legitimate business interest, imposes no undue hardship, and is not injurious to the public.
A restrictive covenant, assuming it is ancillary to a valid employment relationship, is reasonable only if the covenant: (1) is no greater than is required for the protection of a legitimate business interest of the employer-promisee; (2) does not impose undue hardship on the employee-promisor, and (3) is not injurious to the public.
See Reliable Fire Equipment Co. v. Arredondo, 2011 IL 111871.
Who can be bound by a non-compete in Illinois?
Only workers above the statutory earnings floors. A non-compete is void unless the employee's actual or expected annualized earnings exceed $75,000, and a non-solicit is void unless they exceed $45,000; both floors step up over time.
The earnings thresholds are the first and most mechanical filter. They are hard floors: a covenant used below the threshold is void regardless of how reasonable its scope is.
The non-solicit threshold is lower but works the same way . Both thresholds escalate on a fixed schedule — the non-compete floor rises to $80,000 on January 1, 2027, then $85,000 in 2032 and $90,000 in 2037, with the non-solicit floor climbing to $47,500, $50,000, and $52,500 on the same dates. The Act also defines earnings broadly to include salary, bonuses, commissions, and elective W-2 deferrals such as 401(k) and HSA contributions, so the calculation is not limited to base salary.
Do not assume a covenant is enforceable just because the worker is salaried. Under 820 ILCS 90/10 a non-compete is void below $75,000 and a non-solicit below $45,000 in annualized earnings, and those floors rise in 2027, so confirm the worker clears the current threshold — counting bonuses, commissions, and elective deferrals — before relying on the covenant.
Sources for this answer
Primary law
B.1 820 ILCS 90/10820 ILCS 90/10(a) supports that a non-compete is void unless the employee's actual or expected annualized earnings exceed $75,000, an amount that increases over time.
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.
See 820 ILCS 90/10(a).
Primary law
B.2 820 ILCS 90/10820 ILCS 90/10(b) supports that a non-solicit is void unless the employee's actual or expected annualized earnings exceed $45,000, an amount that increases over time.
No employer shall enter into a covenant not to solicit with any employee unless the employee's actual or expected annualized rate of earnings exceeds $45,000 per year.
See 820 ILCS 90/10(b).
What counts as adequate consideration for an Illinois non-compete?
Either two years of continued employment after signing, or other professional or financial benefits adequate to support the restraint. Illinois codified the Fifield two-year rule, but a financial benefit relied on as consideration must be expressly tied to the covenant — a Midwest Lending trap.
The IFWA defines adequate consideration in 820 ILCS 90/5, codifying a rule Illinois courts developed under the common law . The two-year benchmark traces to Fifield v. Premier Dealer Services, Inc., where the employee resigned about three months after starting and the court held the covenant unsupported.
The statute offers an alternative to the two-year clock — a shorter period of employment plus additional professional or financial benefits, or such benefits standing alone — but the case law makes the drafting mechanics unforgiving. In Midwest Lending Corp. v. Horton, the employer pointed to a $25,000 signing bonus mentioned in an offer letter, but the restrictive-covenant document did not state that the bonus was given in exchange for the covenant, and the court refused to treat it as consideration.
If you rely on a bonus, equity grant, or other benefit as consideration for an Illinois covenant, draft the exchange clearly and tie the benefit to the covenant. In Midwest Lending Corp. v. Horton, a signing bonus mentioned only in an offer letter did not support a later, integrated nonsolicitation agreement that never identified the bonus as consideration for the covenant — so do not assume a benefit described elsewhere will carry an integrated covenant .
Sources for this answer
Primary law
C.1 820 ILCS 90/5820 ILCS 90/5 supports that adequate consideration means at least two years of employment after signing, or other professional or financial benefits adequate to support the covenant.
"Adequate consideration" means (1) the employee worked for the employer for at least 2 years after the employee signed an agreement containing a covenant not to compete or a covenant not to solicit or (2) the employer otherwise provided consideration adequate to support an agreement to not compete or to not solicit, which consideration can consist of a period of employment plus additional professional or financial benefits or merely professional or financial benefits adequate by themselves.
See 820 ILCS 90/5.
Case law · 2013-06-24
C.2 Fifield v. Premier Dealer Services, Inc.Fifield v. Premier Dealer Services supports that continued employment for two years or more is generally required to constitute adequate consideration for a restrictive covenant.
Generally, Illinois courts have held that continued employment for two years or more constitutes adequate consideration.
See Fifield v. Premier Dealer Services, Inc., 2013 IL App (1st) 120327.
Case law · 2023-05-22
C.3 Midwest Lending Corp. v. HortonMidwest Lending Corp. v. Horton supports that a signing bonus described in an offer letter did not provide adequate consideration for a later, integrated nonsolicitation agreement that did not identify the bonus as consideration for the covenant.
Accordingly, we reject Midwest's argument that the “signing bonus” in the offer letter provided adequate consideration for Horton's later agreement to the nonsolicitation provision.
See Midwest Lending Corp. v. Horton, 2023 IL App (3d) 220132.
Must an Illinois employer give advance notice before a non-compete is signed?
Yes. The covenant is void unless the employer advises the employee in writing to consult an attorney and either provides a copy of the covenant at least 14 calendar days before employment begins or otherwise gives the employee at least 14 calendar days to review it .
This is a procedural gate with teeth: failing either step makes the covenant void, no matter how reasonable its terms.
The statute gives two ways to satisfy the timing prong — a copy at least 14 days before the start date, or at least 14 days to review the covenant — but the written attorney-consultation advisement is mandatory either way. The employee may choose to sign early, but the employer must still extend the full 14-day window.
Build a 14-day review window and a written instruction to consult counsel into your Illinois onboarding workflow. Under 820 ILCS 90/20 a covenant is void if either step is missing, so give the employee the covenant with the written advisement and at least 14 calendar days to review it, and document both — an employee's early signature does not excuse offering the full period .
Sources for this answer
Primary law
D.1 820 ILCS 90/20820 ILCS 90/20 supports that a covenant is void unless the employer advises the employee in writing to consult an attorney and either provides a copy at least 14 calendar days before employment begins or gives the employee at least 14 calendar days to review the covenant.
A covenant not to compete or a covenant not to 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.
See 820 ILCS 90/20.
How do Illinois courts judge whether a non-compete is reasonable?
By the totality of the circumstances, not a rigid formula. A legitimate business interest exists based on all the facts of the case, and the same restraint can be reasonable in one situation and unreasonable in another.
Even a covenant that clears the earnings, consideration, and notice gates must still be reasonable. The IFWA codifies the legitimate-business-interest inquiry as a totality test in 820 ILCS 90/7.
That codification tracks Reliable Fire, where the Illinois Supreme Court rejected rigid appellate tests for a protectable interest in favor of a fact-driven inquiry.
The statutory factors include the employee's exposure to customer relationships, the near-permanence of those relationships, access to confidential information, and the time, place, and scope of the restriction — but no factor is decisive, and reasonableness is gauged by all of the circumstances together.
Sources for this answer
Primary law
E.1 820 ILCS 90/7820 ILCS 90/7 supports that a legitimate business interest is determined under the totality of the facts and circumstances of the individual case, with no single factor controlling.
In determining the legitimate business interest of the employer, the totality of the facts and circumstances of the individual case shall be considered.
See 820 ILCS 90/7.
Case law · 2011-12-01
E.2 Reliable Fire Equipment Co. v. ArredondoReliable Fire Equipment Co. v. Arredondo supports that whether a legitimate business interest exists is based on the totality of the facts and circumstances of the individual case rather than a rigid test.
Rather, we adopt the position of Justice Hudson's special concurrence, which is: whether a legitimate business interest exists is based on the totality of the facts and circumstances of the individual case.
See Reliable Fire Equipment Co. v. Arredondo, 2011 IL 111871.
Which Illinois workers are categorically off-limits for non-competes?
Several, though they differ in kind. Construction workers, broadcasters, and temporary agency nurses face flat bans; covenants against public-sector collective-bargaining-covered employees, COVID-19-related layoffs, and mental-health professionals treating veterans and first responders are voided or unenforceable on narrower, conditional terms.
Beyond the earnings thresholds, the IFWA and related statutes carve out categories of workers regardless of reasonableness. Construction is a flat ban, subject to a role-based carve-out.
That construction ban does not reach employees who primarily perform management, engineering, architectural, design, or sales functions, or who are owners . The IFWA adds three narrower, conditional limits. It voids non-competes (not non-solicits) against public-sector employees covered by a collective bargaining agreement under the Illinois Public Labor Relations Act or the Illinois Educational Labor Relations Act . It bars enforcement against employees laid off due to COVID-19 or similar circumstances unless the employer pays base salary, minus subsequent earnings, through the restricted period . And a 2025 amendment makes a covenant unenforceable as to a mental-health professional treating veterans and first responders where enforcement would likely increase the cost or difficulty of obtaining those services .
Two industry-specific statutes outside the IFWA add their own bans. The Broadcast Industry Free Market Act bars post-employment non-competes for broadcasters, though it still allows enforcement during the contract term or against an employee who breaches , and the Nurse Agency Licensing Act voids non-competes against agency nurses and certified nurse aides placed on a temporary basis .
Check the worker's industry and role before relying on an Illinois covenant. Construction workers (outside the management/sales/owner carve-out), broadcasters, and temporary agency nurses face flat statutory voids that no reasonable drafting will cure, and covenants against public-sector union employees, COVID-era layoffs, and mental-health professionals serving veterans and first responders face their own conditional bars.
Sources for this answer
Primary law
F.1 820 ILCS 90/10820 ILCS 90/10(e) supports that covenants not to compete and not to solicit are void and illegal for individuals employed in construction, except those who primarily perform management, engineering/architectural, design, or sales functions or who are shareholders, partners, or owners.
A covenant not to compete or a covenant not to solicit is void and illegal with respect to individuals employed in construction, regardless of whether an individual is covered by a collective bargaining agreement. This subsection (e) does not apply to construction employees who primarily perform management, engineering or architectural, design, or sales functions for the employer or who are shareholders, partners, or owners in any capacity of the employer.
See 820 ILCS 90/10(e).
Primary law
F.4 820 ILCS 90/10820 ILCS 90/10(d) supports that a covenant not to compete is void and illegal as to individuals covered by a collective bargaining agreement under the Illinois Public Labor Relations Act or the Illinois Educational Labor Relations Act.
A covenant not to compete is void and illegal with respect to individuals covered by a collective bargaining agreement under the Illinois Public Labor Relations Act or the Illinois Educational Labor Relations Act.
See 820 ILCS 90/10(d).
Primary law
F.5 820 ILCS 90/10820 ILCS 90/10(c) supports that a covenant is void as to an employee terminated, furloughed, or laid off due to COVID-19 or similar circumstances unless enforcement includes base-salary-equivalent compensation, minus subsequent earnings, for the enforcement period.
No employer shall enter into a covenant not to compete or a covenant not to solicit with any employee who an employer terminates or furloughs or lays off as the 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 of the covenant not to compete 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.
See 820 ILCS 90/10(c).
Primary law
F.6 820 ILCS 90/10820 ILCS 90/10(f) supports that covenants entered after January 1, 2025 are unenforceable against licensed mental health professionals providing services to veterans and first responders where enforcement would likely increase the cost or difficulty of obtaining those services.
Any covenant not to compete or covenant not to solicit entered into after January 1, 2025 (the effective date of Public Act 103-915) shall not be enforceable with respect to the provision of mental health services to veterans and first responders by any licensed mental health professional in this State if the enforcement of the covenant not to compete or covenant not to solicit is likely to result in an increase in cost or difficulty for any veteran or first responder seeking mental health services.
See 820 ILCS 90/10(f).
Primary law
F.2 820 ILCS 17/10820 ILCS 17/10 supports that a broadcasting industry employer may not require a post-employment geographic/time restraint, though it does not prevent enforcement during the contract term or against an employee who breaches the contract.
No broadcasting industry employer may require in an employment contract that an employee or prospective employee refrain from obtaining employment in a specific geographic area for a specific period of time after termination of employment with that broadcasting industry employer. (b) This Section does not prevent the enforcement of a covenant not to compete during the term of an employment contract or against an employee who breaches an employment contract.
See 820 ILCS 17/10.
Primary law
F.3 225 ILCS 510/14225 ILCS 510/14(g) supports that nurse agencies are prohibited from entering into covenants not to compete with nurses and certified nurse aides placed at a health care facility on a temporary basis.
Nurse agencies are prohibited from entering into covenants not to compete with nurses and certified nurse aides if the nurse is employed, assigned, or referred by a nurse agency to a health care facility on a temporary basis or the certified nurse aide is employed, assigned, or referred by a nurse agency to a health care facility on a temporary basis.
See 225 ILCS 510/14(g).
Will an Illinois court rewrite an overbroad non-compete instead of voiding it?
Sometimes, but it is discretionary and far from guaranteed. The IFWA permits reformation yet warns that extensive judicial rewriting may be against public policy, and Illinois courts have refused to rescue patently overbroad covenants.
Illinois gives courts a discretionary, policy-limited blue-pencil power rather than a guarantee of reformation.
Courts weigh factors such as the fairness of the restraints as originally written, whether the original draft was a good-faith effort to protect a legitimate interest, the extent of reformation required, and whether the agreement authorized modification. When a covenant is drafted far broader than necessary, Illinois courts have declined to fix it.
Do not treat Illinois reformation as a safety net for an aggressive covenant. Section 35 lets a court reform or sever in its discretion but warns that extensive rewriting may violate public policy, and AssuredPartners, Inc. v. Schmitt refused to rescue a patently overbroad restraint — so draft to the narrowest defensible scope rather than relying on a judge to cut it down.
Sources for this answer
Primary law
G.1 820 ILCS 90/35820 ILCS 90/35 supports that extensive judicial reformation may be against Illinois public policy and that reformation is discretionary, guided by factors including the fairness of the restraints as written, whether the draft was a good-faith effort, the extent of reformation, and whether the agreement authorized modification.
Extensive judicial reformation of a covenant not to compete or a covenant not to solicit may be against the public policy of this State and a court may refrain from wholly rewriting contracts. (b) In some circumstances, 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. Factors which may be considered when deciding whether such reformation is appropriate include the fairness of the restraints as originally written, whether the original restriction reflects a good-faith effort to protect a legitimate business interest of the employer, the extent of such reformation, and whether the parties included a clause authorizing such modifications in their agreement.
See 820 ILCS 90/35.
Case law · 2016-01-29
G.2 AssuredPartners, Inc. v. SchmittAssuredPartners, Inc. v. Schmitt supports that Illinois courts will decline to judicially modify a restrictive covenant that is patently overbroad.
We decline to rescue a draftor from the risks of crafting a restrictive covenant that is patently overbroad.
See AssuredPartners, Inc. v. Schmitt, 2015 IL App (1st) 141863.
Does a tolling or extension-during-breach clause extend an Illinois non-compete?
Illinois law does not squarely answer this. No IFWA provision addresses a clause that pauses or extends the restricted period during breach or litigation, and an extension that pushes the effective restraint past a reasonable duration is exposed under the statute's reasonableness requirement and its limits on reformation.
Many non-compete forms add a tolling or extension clause so the employer gets the full restricted period even if the former employee competes during it. The IFWA neither authorizes nor prohibits such clauses, and no Illinois decision under the Act has squarely ruled on one, so this is an open question that calls for caution rather than confidence.
The statutory framework still constrains it. Duration is part of the reasonableness analysis, and a covenant is void unless it is no greater than required to protect a legitimate business interest . A tolling clause that adds the period of breach plus the time spent in litigation can stretch the effective restraint well beyond what the parties wrote, raising a duration-reasonableness problem. And because Illinois warns against extensive judicial reformation, an employer cannot assume a court will trim an open-ended extension back to a reasonable term rather than decline to enforce it .
Treat an open-ended tolling-during-breach clause in an Illinois covenant as unsettled and risky. No IFWA provision or decision under the Act endorses one, duration bears on reasonableness under Section 15, and Section 35 cautions against extensive judicial rewriting — so a defined, reasonable fixed term is the safer choice than relying on a clause that extends the period during breach or litigation.
Sources for this answer
Primary law
H.1 820 ILCS 90/15820 ILCS 90/15 supports that a covenant is void unless it is no greater than required to protect a legitimate business interest, which bears on a tolling clause that extends the effective duration of the restraint.
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.
See 820 ILCS 90/15.
Primary law
H.2 820 ILCS 90/35820 ILCS 90/35 supports that extensive judicial reformation may be against public policy, so a court may decline to cut an open-ended tolling extension back to a reasonable term rather than rewrite it.
Extensive judicial reformation of a covenant not to compete or a covenant not to solicit may be against the public policy of this State and a court may refrain from wholly rewriting contracts.
See 820 ILCS 90/35(a).
What protections can Illinois employers use when a non-compete is risky?
Confidentiality and trade-secret protections, which sit outside the IFWA. The Act excludes confidentiality, trade-secret, and invention agreements from its definitions, and the Illinois Trade Secrets Act says a duty of secrecy is not void merely for lacking time or geographic limits.
The IFWA's definitions deliberately leave several common protections untouched. A covenant not to compete does not include confidentiality agreements, trade-secret or invention-protection covenants, or sale-of-business covenants, so those tools are not subject to the Act's thresholds and notice rules .
The Illinois Trade Secrets Act backs up confidentiality drafting by confirming that a secrecy duty does not need the durational and geographic limits a non-compete requires.
That makes well-drafted confidentiality and trade-secret protections a durable alternative where an Illinois non-compete is unavailable or risky — though they protect information, not the employer against ordinary competition.
Sources for this answer
Primary law
I.1 820 ILCS 90/5820 ILCS 90/5 supports that the definition of a covenant not to compete excludes confidentiality agreements, trade-secret and invention-protection covenants, and sale-of-business covenants.
"Covenant not to compete" does not include (1) a covenant not to solicit, (2) a confidentiality agreement or covenant, (3) a covenant or agreement prohibiting use or disclosure of trade secrets or inventions, (4) invention assignment agreements or covenants, (5) a covenant or agreement entered into by a person purchasing or selling the goodwill of a business or otherwise acquiring or disposing of an ownership interest
See 820 ILCS 90/5.
Primary law
I.2 765 ILCS 1065/8765 ILCS 1065/8(b)(1) supports that a contractual duty to maintain secrecy or limit use of a trade secret is not void or unenforceable solely for lacking durational or geographic limits.
This Act does not affect: (1) contractual remedies, whether or not based upon misappropriation of a trade secret, provided however, that a contractual or other duty to maintain secrecy or limit use of a trade secret shall not be deemed to be void or unenforceable solely for lack of durational or geographical limitation on the duty
See 765 ILCS 1065/8(b)(1).
What does an Illinois employer risk by overreaching on a non-compete?
Paying the employee's legal fees and facing Attorney General penalties. In an employer-filed action or arbitration to enforce a covenant, a prevailing employee recovers costs and reasonable attorney's fees, and the Attorney General can pursue pattern-and-practice violations with civil penalties — and has done so.
The IFWA shifts litigation economics toward employees. If an employer sues or arbitrates to enforce a covenant and the employee prevails, the employer pays the employee's side of that fight.
The Act also adds a public-enforcement overlay. The Attorney General may investigate and sue for a pattern and practice of violations, with civil penalties.
This is not a dormant power. In 2024, the Attorney General reached a multistate settlement with Valvoline over non-competes imposed on hourly oil-change workers.
Sources for this answer
Primary law
J.1 820 ILCS 90/25820 ILCS 90/25 supports that in a civil action or arbitration filed by an employer to enforce a covenant, an employee who prevails recovers all costs and reasonable attorney's fees from the employer.
in a civil action or arbitration filed by an employer (including, but not limited to, a complaint or counterclaim), if an employee prevails on a claim to enforce a covenant not to compete or a covenant not to solicit, the employee shall recover from the employer all costs and all reasonable attorney's fees regarding such claim to enforce a covenant not to compete or a covenant not to solicit, and the court or arbitrator may award appropriate relief.
See 820 ILCS 90/25.
Primary law
J.2 820 ILCS 90/30820 ILCS 90/30 supports that the Attorney General may pursue pattern-and-practice violations and that a court may impose civil penalties up to $5,000 per violation or $10,000 per repeat violation within five years.
the Attorney General may request and the court may impose a civil penalty not to exceed $5,000 for each violation or $10,000 for each repeat violation within a 5-year period.
See 820 ILCS 90/30(d).
Agency guidance · 2024-08-01
J.3 Attorney General Raoul Reaches Settlement With Valvoline Over Use of Non-Compete AgreementsThe Illinois Attorney General's 2024 Valvoline settlement supports that the State actively enforces against non-competes imposed on lower-wage workers.
Raoul and the attorneys general allege Valvoline required its hourly employees to sign non-competition agreements that prohibited them from working in the oil change business at any store within 100 miles of a Valvoline location for one year after leaving Valvoline.
See Ill. Att'y Gen., Settlement with Valvoline (Aug. 1, 2024).
Can an out-of-state choice-of-law or venue clause bypass Illinois non-compete law?
Only in a limited, but important, way. The Workplace Transparency Act, effective 2026, voids a unilateral employment clause that applies non-Illinois law or requires an out-of-state venue to the extent it diminishes an Illinois employee's rights related to an unlawful employment practice — but it is not a general rule that every non-compete choice-of-law clause is void .
Multi-state employers often designate Delaware or New York law and venue to escape Illinois's strict limits. Amendments to the Workplace Transparency Act effective January 1, 2026 (Public Act 104-320) constrain that move — but read the provision precisely. The void is tethered to claims, rights, or benefits related to an unlawful employment practice, not to non-compete enforcement at large.
The bar also applies only to unilateral conditions of employment; a mutual provision can survive if it is in writing, demonstrates actual, knowing, and bargained-for consideration, and preserves the listed employee rights. The practical takeaway is narrower than the headlines suggest: the WTA limits boilerplate forum-shifting where an Illinois employee's statutory employment claims are at stake, but a covenant-holder cannot assume it broadly defeats every out-of-state choice-of-law clause in a non-compete dispute. Where it does not apply, Illinois's ordinary conflict-of-laws and public-policy analysis governs.
Do not over-read the Workplace Transparency Act as a blanket bar on out-of-state choice-of-law and venue clauses. As of January 1, 2026, it voids a unilateral clause applying non-Illinois law or requiring an out-of-state venue to the extent it diminishes an Illinois employee's rights related to an unlawful employment practice, and a mutual, separately bargained clause can survive — so treat it as a meaningful but bounded check on forum-shifting, not a general non-compete choice-of-law rule .
Sources for this answer
Primary law
K.1 820 ILCS 96/1-25820 ILCS 96/1-25(b) supports that a unilateral employment clause is against public policy to the extent it diminishes an Illinois employee's rights related to an unlawful employment practice, including by applying non-Illinois law or requiring an out-of-state venue for the employee's claim.
(b) Any agreement, clause, covenant, or waiver that is a unilateral condition of employment or continued employment and requires the employee or prospective employee to waive, arbitrate, or otherwise diminish any existing or future claim, right, or benefit related to an unlawful employment practice to which the employee or prospective employee would otherwise be entitled under any provision of State or federal law, including that which purports to shorten the applicable statute of limitation, apply non-Illinois law to an Illinois employee's claim, or require a venue outside of Illinois to adjudicate an Illinois employee's claim, is against public policy, void to the extent it denies an employee or prospective employee a substantive or procedural right or remedy related to alleged unlawful employment practices, and severable from an otherwise valid and enforceable contract under this Act.
See 820 ILCS 96/1-25(b).
Are no-poach agreements between employers treated like employee non-competes?
No. An agreement between competing employers not to hire each other's workers is analyzed under the Illinois Antitrust Act, not the IFWA, and the Illinois Supreme Court has held such agreements are not exempt from antitrust scrutiny .
It is easy to conflate two different things: a covenant an employee signs, and an agreement between employers not to poach one another's workers. The IFWA governs the former; the latter is a labor-market restraint reached by state antitrust law. In State ex rel. Raoul v. Elite Staffing, Inc., the Illinois Supreme Court addressed staffing agencies that allegedly agreed to fix wages and not hire each other's employees.
So an inter-employer no-poach or wage-fixing arrangement can draw antitrust exposure independent of the IFWA's rules for employee covenants.
Sources for this answer
Case law · 2024-01-19
L.1 State ex rel. Raoul v. Elite Staffing, Inc.State ex rel. Raoul v. Elite Staffing supports that the Illinois Antitrust Act does not exempt from scrutiny agreements between competitors to hold down wages and limit employment opportunities, distinguishing inter-employer no-poach restraints from employee covenants.
We hold that the Illinois Antitrust Act does not exempt from antitrust scrutiny all agreements between competitors to hold down wages and to limit employment opportunities for their employees.
See State ex rel. Raoul v. Elite Staffing, Inc., 2024 IL 128763.