Bill Text: IL SB1838 | 2021-2022 | 102nd General Assembly | Introduced

---

Bill Title: Amends the Illinois Freedom to Work Act. Provides that a covenant not to compete shall not be valid or enforceable unless the employee's actual or expected annualized rate of earnings exceeds $75,000 per year on the effective date of the amendatory Act, $80,000 per year beginning on January 1, 2027, $85,000 per year beginning on January 1, 2032, or $90,000 per year beginning on January 1, 2037 (rather than no employer shall enter into a covenant not to compete with any low-wage employee of the employer). Provides that a covenant not to solicit shall not be valid or enforceable unless the employee's actual or expected annualized rate of earnings exceeds $45,000 per year. Provides that a covenant not to compete is void and illegal for 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. Provides that a covenant not to compete is void and illegal for individuals covered by a collective bargaining agreement under the Illinois Public Labor Relations Act or the Illinois Educational Labor Relations Act. Contains provisions concerning the enforceability of a covenant not to compete or a covenant not to solicit; notice requirements for employers under a covenant not to compete or a covenant not to solicit; remedies for employees who prevail against an employer's civil action to enforce a covenant not to compete or a covenant not to solicit; and certain factors a court may consider when determining whether to reform a covenant not to compete or a covenant not to solicit. Defines "adequate consideration"; "covenant not to compete"; "covenant not to solicit"; "earnings"; and "employee". Removes the definition for the term "low-wage employee". Effective January 1, 2022.

Spectrum: Bipartisan Bill

Status: (Introduced - Dead) 2021-07-16 - Senate Floor Amendment No. 2 Pursuant to Senate Rule 3-9(b) / Referred to Assignments [SB1838 Detail]

Download: Illinois-2021-SB1838-Introduced.html

---

102ND GENERAL ASSEMBLY State of Illinois 2021 and 2022 SB1838 Introduced 2/26/2021, by Sen. Mattie Hunter SYNOPSIS AS INTRODUCED:
820 ILCS 90/5
820 ILCS 90/10
Amends the Illinois Freedom to Work Act. Expands the scope of the Act to apply to all employees (rather than only low-wage employees). Prohibits all covenants not to compete. Effective immediately.
LRB102 11384 JLS 16717 b
A BILL FOR
SB1838 LRB102 11384 JLS 16717 b
AN ACT concerning employment.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Illinois Freedom to Work Act is amended by
changing Sections 5 and 10 as follows:
(820 ILCS 90/5)
Sec. 5. Definitions. In this Act:
"Covenant not to compete" means an agreement:
(1) between an employer and an a low-wage employee
that restricts the such low-wage employee from performing:
(A) any work for another employer for a specified
period of time;
(B) any work in a specified geographical area; or
(C) work for another employer that is similar to
the such low-wage employee's work for the employer
included as a party to the agreement; and
(2) that is entered into after the effective date of
this amendatory Act of the 102nd General Assembly.
"Employer" has the meaning given to such term in
subsection (c) of Section 3 of the Minimum Wage Law.
"Employer" does not include governmental or quasi-governmental
bodies.
"Employee" "Low-wage employee" means any individual

SB1838 - 2 - LRB102 11384 JLS 16717 b
permitted to work by an employer an employee whose earnings do
not exceed the greater of (1) the hourly rate equal to the
minimum wage required by the applicable federal, State, or
local minimum wage law or (2) $13.00 per hour.
(Source: P.A. 99-860, eff. 1-1-17; 100-225, eff. 8-18-17.)
(820 ILCS 90/10)
Sec. 10. Prohibiting covenants not to compete for low-wage
employees.
(a) After the effective date of this amendatory Act of the
102nd General Assembly, no No employer shall enter into a
covenant not to compete with any low-wage employee of the
employer.
(b) A covenant not to compete entered into between an
employer and an a low-wage employee is illegal and void.
(Source: P.A. 99-860, eff. 1-1-17.)
Section 99. Effective date. This Act takes effect upon
becoming law.