Non-Compete Agreements in Illinois: Are They Actually Enforceable in 2026?

Non-compete agreements in Illinois are not automatically enforceable. If your employer handed you a non-compete to sign and you assumed it would hold up in court no matter what, think again. Illinois has some of the most employee-friendly non-compete laws in the country, and those protections have only gotten stronger in recent years.

Whether you are a worker wondering if your agreement can actually keep you from taking a new job, or an employer trying to protect your business interests, the rules here matter. Illinois passed sweeping reforms through the Illinois Freedom to Work Act (IFTWA), which took effect in January 2022 and changed almost everything about how these agreements work. Then, in 2026, new legislative proposals threatened to push things even further — potentially banning non-competes entirely.

This article breaks down exactly what makes a non-compete agreement enforceable in Illinois, who is protected, what the courts look for, and what the near future might look like for restrictive covenants in the state. If you have signed one of these agreements — or you are being asked to — this is what you need to know.

What Is a Non-Compete Agreement?

A non-compete agreement, sometimes called a covenant not to compete, is a clause in an employment contract that restricts where you can work after leaving a company. Typically, it prevents you from:

• Joining a direct competitor within a certain geographic area
• Starting a competing business for a set period of time
• Soliciting former clients or colleagues

In Illinois, these agreements must be narrowly tailored. You cannot simply prevent someone from working in their entire profession. Courts require that the restrictions be tied to a legitimate business reason, cover a reasonable geographic area, and last for a reasonable amount of time.

The Illinois Freedom to Work Act defines a non-compete as any agreement that restricts an employee from performing work in a specific industry, meeting certain types of clients, or working in a certain geographic area after leaving their employer. Importantly, the Act also covers agreements that impose financial penalties on employees for engaging in competitive activities — not just outright prohibitions.

The Illinois Freedom to Work Act: What Changed in 2022

The most important legal development in this space was the amendment to the Illinois Freedom to Work Act, which became effective on January 1, 2022. This law reshaped the entire landscape of employee non-compete law in Illinois.

Here is what the 2022 amendments require:

Salary Thresholds

This is the most significant protection for workers. Under the amended Act:

• Non-compete agreements are prohibited for employees earning less than $75,000 per year
• Non-solicitation agreements (restrictions on contacting former clients or coworkers) are prohibited for employees earning less than $45,000 per year

These thresholds are set to increase by $5,000 every five years, so they will continue to rise over time. If you earn below these levels, your employer simply cannot enforce a non-compete against you — full stop.

Adequate Consideration

One of the most contested areas of Illinois non-compete law has always been what counts as valid “consideration” — essentially, what the employer gives you in exchange for signing the agreement. The 2022 Act codified what Illinois courts had been wrestling with for years.

Under the Act, adequate consideration means one of two things:

1. At least two years of continued employment after signing the agreement, or
2. Some other tangible professional or financial benefit — such as a promotion, a bonus, additional compensation, or specialized training

If an employer hands you a non-compete on your first day and you leave within two years without receiving any additional financial benefit, the agreement is likely unenforceable. This directly overturned the confusion that arose from competing court decisions in earlier years.

The 14-Day Review Period

Employers must give employees at least 14 days to review a non-compete before signing. They are also required to advise employees in writing to consult an attorney before signing. This is not optional. Rushing an employee to sign without this window is a procedural failure that can undermine enforceability.

Attorney’s Fees

If an employer tries to enforce a non-compete that fails to meet the Act’s requirements, and the employee wins, the employer may be required to pay the employee’s attorney’s fees. This provision puts real financial risk on employers who overreach.

Attorney General Enforcement

The Illinois Attorney General has the authority to investigate potential violations of the Act and can seek civil penalties. This is not just a private enforcement mechanism — the state itself can step in.

What Courts Look for When Evaluating Non-Competes

Even when the procedural requirements are met, an Illinois court will still evaluate whether a non-compete is substantively reasonable. Courts apply a five-part test to determine enforceability:

1. Adequate consideration — Was the employee actually given something of value?
2. Ancillary to valid employment — Is the agreement part of a legitimate employment relationship?
3. Reasonable scope — Are the geographic area, duration, and activity restrictions proportionate?
4. Undue hardship — Would enforcing this cause serious harm to the employee?
5. Public interest — Does the restriction harm the public in any meaningful way?

Courts will not simply throw out an agreement that is slightly too broad. Under Illinois law, judges have the option to “blue pencil” or reform the agreement — narrowing it to what would be enforceable rather than voiding it entirely. However, courts consider whether enforcement would be fair and whether the agreement was drafted in good faith before deciding whether to reform or reject it.

What Counts as a Legitimate Business Interest?

Illinois courts look at whether the employer has something genuinely worth protecting. Commonly accepted legitimate interests include:

• Trade secrets and proprietary business information
• Confidential customer relationships built through direct access
• Specialized training provided specifically by the employer

If your employer cannot point to one of these, a non-compete is unlikely to hold up. A general desire to stop employees from working for competitors is not, on its own, a legitimate business interest under Illinois law.

Who Is Exempt from Non-Compete Agreements in Illinois?

The Illinois Freedom to Work Act carves out several categories where non-competes simply do not apply:

• Employees earning less than $75,000/year (non-competes) or $45,000/year (non-solicitation)
• Construction industry workers, who received a targeted exemption
• Licensed mental health professionals providing services to veterans and first responders (effective January 1, 2026)
• Workers terminated, furloughed, or laid off due to COVID-19 or similar circumstances, unless the employer pays the employee’s base salary for the full restriction period

The Act also explicitly excludes certain types of agreements from its scope entirely:

• Confidentiality and non-disclosure agreements
• Invention assignment agreements
• Agreements made in connection with the sale of a business
• Garden leave clauses — agreements where an employee stays on payroll during a notice period before leaving

Non-Solicitation Agreements: A Related but Different Animal

It is worth distinguishing between non-compete agreements and non-solicitation agreements, because Illinois law treats them differently.

A non-solicitation agreement typically restricts you from:

• Contacting or doing business with your former employer’s clients
• Recruiting your former coworkers to join your new employer

These are generally viewed as less burdensome than full non-competes, which is why the salary threshold is lower ($45,000 vs. $75,000). Non-solicitation agreements are still subject to the same requirements around consideration, review time, and reasonable scope — they just apply to a slightly broader range of employees.

What About the FTC’s Attempted National Non-Compete Ban?

In April 2024, the Federal Trade Commission (FTC) issued a sweeping rule that would have banned nearly all non-compete agreements nationwide. The rule was set to take effect in September 2024. However, a federal court in Texas blocked the rule in August 2024, holding that the FTC had exceeded its statutory authority.

As of 2026, the FTC’s nationwide ban is not in effect. The FTC formally withdrew its appeals, and the rule is effectively dead. This means that Illinois state law continues to govern non-compete enforceability for workers in the state.

That said, the FTC has made clear it will continue to challenge non-compete agreements under its general authority to regulate unfair methods of competition. So while there is no blanket federal ban, overly broad or abusive agreements could still attract federal scrutiny.

What Could Change: House Bill 3213 and a Potential Full Ban

The most significant pending development is House Bill 3213, introduced in the Illinois legislature in March 2026. If passed, this bill would:

• Completely ban all non-compete and non-solicitation agreements entered into on or after January 1, 2026
• Render existing agreements void and unenforceable going forward
• Apply regardless of where the agreement was signed or enforced

This would be one of the most aggressive non-compete reforms in the country. As of mid-2026, the bill has not been signed into law, but its introduction signals where Illinois policymakers are leaning. Employers relying on non-competes should be watching this closely.

For current and up-to-date information on Illinois employment law, you can refer to the Illinois General Assembly’s official legislation portal and the Illinois Freedom to Work Act text (820 ILCS 90).

Practical Advice for Employees

If you have signed a non-compete or are being asked to sign one, here is what you should actually do:

• Check your salary. If you earn less than $75,000/year, any non-compete your employer asks you to sign is likely unenforceable under Illinois law.
• Review the timeline. If you signed the agreement less than two years ago and received no additional compensation or benefits at signing, challenge its enforceability.
• Look at the scope. If the geographic restriction covers an unreasonably large area, or the duration is longer than two years, courts may narrow or void the restriction.
• Get legal advice. The Act requires employers to advise you to consult an attorney — take that advice seriously, especially before starting a new job in the same industry.
• Do not assume it is unenforceable. Even if you think the agreement has problems, taking a new job with a competitor before getting legal clarity can lead to an expensive lawsuit.

Practical Advice for Employers

If you rely on non-compete agreements to protect your business, the current legal environment requires careful attention:

• Review your agreements for salary compliance. Any non-compete applied to an employee earning under $75,000 is invalid.
• Ensure proper consideration. Either offer at least two years of continued employment or pair the agreement with a tangible benefit at signing — a bonus, promotion, or increased compensation.
• Give the 14-day review period. Document it in writing and remind the employee to consult an attorney.
• Keep restrictions narrow. Broad geographic or time restrictions are more likely to be challenged or reformed by courts.
• Consider alternatives. A well-drafted confidentiality agreement or non-solicitation clause often protects your core interests — customer relationships and trade secrets — without the higher enforcement risk of a full non-compete.
• Watch HB 3213. If Illinois bans non-competes entirely starting in 2026, you will need a different strategy.

Conclusion

Non-compete agreements in Illinois are enforceable — but only under a fairly demanding set of conditions. The Illinois Freedom to Work Act requires adequate consideration, a minimum salary threshold, a 14-day review period, and a substantively reasonable scope. Courts will not automatically uphold an agreement just because an employee signed it. With House Bill 3213 potentially banning non-competes entirely starting in 2026, and the FTC’s national ban already struck down, the landscape is shifting fast. Whether you are an employee wondering if your agreement can hold you back or an employer trying to protect legitimate business interests, understanding these rules is not optional — it is essential. When in doubt, consult an employment attorney before making any moves.