We believe that the recent amendments to the Illinois Freedom to Work Act apply only to covenants not to compete entered into after January 1, 2022.

Public Act 102-358, effective January 1, 2022, amends the Illinois Freedom to Work Act to significantly expand the Act’s limitations on post-employment restrictions for certain employees and set new standards that covenants not to compete must meet in order to be valid and enforceable. However, the definition of “covenant not to compete” includes only agreements “entered into after the effective date of this amendatory Act of the 102nd General Assembly.” Thus, we believe that covenants not to compete that were entered into before the effective date of Public Act 102-358 (January 1, 2022) are not required to conform to the new standards.

For resources related to our guidance, please see:

• Illinois Freedom to Work Act, 820 ILCS 90/5 (“‘Covenant not to compete’ means an agreement between an employer and an employee that is entered into after the effective date of this amendatory Act of the 102nd General Assembly that restricts the employee from performing: (1) any work for another employer for a specified period of time; (2) any work in a specified geographical area; or (3) work for another employer that is similar to employee’s work for the employer included as a party to the agreement.”)

• Illinois Freedom to Work Act, 820 ILCS 90/5 (“‘Covenant not to compete’ also means an agreement between an employer and an employee, entered into after the effective date of this amendatory Act of the 102nd General Assembly, that by its terms imposes adverse financial consequences on the former employee if the employee engages in competitive activities after the termination of the employee’s employment with the employer.”)