Employment noncompete agreements have become relatively controversial. Their widespread use may potentially have a chilling effect on job mobility for employees as a whole and can have a detrimental impact on earning potential for individual workers.
Those who are currently subject to a noncompete agreement in Illinois may wonder whether reform efforts at the federal level could potentially absolve them of the contractual obligations that limit their ability to start a business or accept a job in the same industry.
Can employers in Illinois still require that workers sign noncompete agreements and enforce them if they allege that violations have occurred?
The federal ban is not enforceable
Despite the FTC enacting a sweeping ban that could have theoretically affected millions of professionals, federal court rulings have determined that the organization overstepped its authority. As such, the federal ban on noncompete agreements is not enforceable and does not have any significant impact on the rights of workers in Illinois.
State rules restrict noncompete agreements
The good news for Illinois professionals is that there are certain rules limiting the use and enforcement of non-compete agreements. There are some workers who may not need to worry about non-compete agreements or their enforcement.
Those working in construction, the public sector and mental health professions may be exempt from non-compete agreements. Similarly, those protected by collective bargaining agreements through a union may be able to avoid noncompete enforcement.
Additionally, there are numerous restrictions on non-compete agreements even when employees could be subject to them lawfully. They are generally only enforceable when they are actually necessary for the protection of an employer and the company’s intellectual property.
The agreement itself must meet certain standards to be valid. Overly-broad noncompete agreements may not withstand scrutiny during enforcement litigation. Noncompete agreements generally should only apply to a specific geographic area and should only remain in effect for a limited amount of time.
Finally, workers generally need to have received something of value in return for giving up their right to compete against an employer. Oftentimes, that valuable consideration is a job offer or promotion. Companies might also offer one-time bonuses or even something as simple as a single extra vacation day to compensate workers for signing a noncompete agreement.
Those concerned about potential noncompete enforcement may need to consult with an employment law attorney about their rights and options. An attorney can help evaluate the strength of an initial agreement and determine what, if any, enforcement actions employers could take.