Illinois General Assembly - Full Text of SB3430
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Full Text of SB3430  101st General Assembly




State of Illinois
2019 and 2020


Introduced 2/14/2020, by Sen. Heather A. Steans


820 ILCS 90/5
820 ILCS 90/15 new
820 ILCS 90/20 new
820 ILCS 90/25 new

    Amends the Illinois Freedom to Work Act. Extends the applicability of the Act to all employees. Provides that a covenant not to compete is illegal and void if the employee does not receive adequate consideration and the covenant is ancillary to a valid employment relationship. Requires covenants not to compete to be no more expansive than required for the protection of legitimate business interests, to not impose undue hardship on the employee, and to not be injurious to the public. Specifies notice and an opportunity for review to be given to the employee. Authorizes employees to recover costs and attorney's fees.

LRB101 17408 JLS 66813 b





SB3430LRB101 17408 JLS 66813 b

1    AN ACT concerning employment.
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4    Section 5. The Illinois Freedom to Work Act is amended by
5changing Section 5 and by adding Sections 15, 20, and 25 as
7    (820 ILCS 90/5)
8    Sec. 5. Definitions. In this Act:
9    "Covenant not to compete" means an agreement:
10        (1) between an employer and an a low-wage employee that
11    restricts the such low-wage employee from performing:
12            (A) any work for another employer for a specified
13        period of time;
14            (B) any work in a specified geographical area; or
15            (C) work for another employer that is similar to
16        the such low-wage employee's work for the employer
17        included as a party to the agreement; and
18        (2) that is entered into after the effective date of
19    this amendatory Act of the 101st General Assembly.
20    "Covenant not to compete" also means an agreement that by
21its terms imposes adverse financial consequences on a former
22employee if the employee engages in competitive activities
23after the termination of the employee's employment with the



SB3430- 2 -LRB101 17408 JLS 66813 b

2    "Employee" has the meaning ascribed to that term in Section
32 of the Wage Payment and Collection Act.
4    "Employer" has the meaning given to such term in subsection
5(c) of Section 3 of the Minimum Wage Law. "Employer" does not
6include governmental or quasi-governmental bodies.
7    "Low-wage employee" means an employee whose earnings do not
8exceed the greater of (1) the hourly rate equal to the minimum
9wage required by the applicable federal, State, or local
10minimum wage law or (2) $13.00 per hour.
11(Source: P.A. 99-860, eff. 1-1-17; 100-225, eff. 8-18-17.)
12    (820 ILCS 90/15 new)
13    Sec. 15. Enforceability of a covenant not to compete.
14    (a) A covenant not to compete entered into between an
15employer and employee is illegal and void unless (i) the
16employee receives adequate consideration and (ii) it is
17ancillary to a valid employment relationship.
18    (b) An employee has not received adequate consideration
19from an employer for a covenant not to compete unless (i) the
20employee worked for the employer for at least 2 years from the
21date the employee signed the covenant not to compete or (ii)
22the employer provided the employee with some other fair and
23reasonable consideration specifically bargained for in
24exchange for the covenant not to compete.
25    (c) A covenant not to compete entered into between an



SB3430- 3 -LRB101 17408 JLS 66813 b

1employer and employee is illegal and void unless it (i) is no
2greater than is required for the protection of a legitimate
3business interest of the employer, (ii) does not impose undue
4hardship on the employee, and (iii) is not injurious to the
5public. Whether a legitimate business interest exists is based
6on the totality of the facts and circumstances of the
7individual case. Factors to be considered in this analysis
8include, but are not limited to, the near-permanence of
9customer relationships, the employee's acquisition of
10confidential information through the employee's employment,
11and time and place restrictions.
12    (820 ILCS 90/20 new)
13    Sec. 20. Ensuring employees are informed about their
15    (a) A covenant not to compete entered into between an
16employer and employee is illegal and void unless the employer
17advises the employee in writing to consult with an attorney
18before entering into the covenant not to compete.
19    (b) A covenant not to compete entered into between an
20employer and employee is illegal and void unless (i) the
21employer provides the employee with a copy of the covenant not
22to compete at least 10 business days before the commencement of
23the employee's employment or (ii) the employer provides the
24employee with at least 21 days to review the covenant not to



SB3430- 4 -LRB101 17408 JLS 66813 b

1    (820 ILCS 90/25 new)
2    Sec. 25. Remedies. In a civil action initiated by an
3employer involving a covenant not to compete, in addition to
4any remedies available under any agreement between an employer
5and an employee, a prevailing employee shall recover costs and
6all reasonable attorney's fees.