EMPLOYMENT-PROHIBIT COVENANTS
The legislation is expected to significantly alter the landscape of employment contracts in Illinois. By eliminating the income threshold for non-compete agreements, employees across various wage levels will benefit from increased job mobility and protection against employer overreach. This change aims to empower workers, especially those in lower-wage positions, who historically may have been subject to unfair restrictions that limit their employment opportunities after leaving a job.
House Bill 5385 seeks to amend the Illinois Freedom to Work Act by prohibiting employers from entering covenants not to compete or covenants not to solicit with any employee, regardless of their compensation. Previously, such restrictions were only applicable to employees earning above a threshold of $75,000 annually. Under the new provisions, the legislation aims to void and make unenforceable any existing contracts that violate this standard by April 1, 2025. Furthermore, employers are required to notify their employees or former employees that any such covenants they have signed are void.
Discussions around HB5385 may lead to notable contention among business groups and labor advocates. Proponents argue that restricting non-compete clauses enhances freedom for employees, enabling them to seek better opportunities without the threat of legal repercussions. Conversely, some business sectors may raise concerns about the potential impacts on competitiveness and protection of proprietary information, arguing that such covenants are sometimes necessary to safeguard business interests. They may view the bill as an overreach into contractual agreements that could affect their operational flexibility.