IL
Illinois House Bill HB3213

Illinois 2025-2026 Regular Session

Illinois House Bill HB3213 Compare Versions

Only one version of the bill is available at this time.
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11 104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 HB3213 Introduced , by Rep. Anna Moeller SYNOPSIS AS INTRODUCED: 820 ILCS 90/5820 ILCS 90/10820 ILCS 90/15820 ILCS 90/7 rep.820 ILCS 90/20 rep.820 ILCS 90/35 rep. Amends the Illinois Freedom to Work Act. Provides that, on and after January 1, 2026, no employer shall enter into a covenant not to compete or a covenant not to solicit with any employee. Provides that a covenant not to compete or a covenant not to solicit entered into on or after January 1, 2026 is illegal and void regardless of where and when the covenant not to compete or a covenant not to solicit was entered into. Provides that an employer or former employer shall not attempt to enforce a contract that is void and unenforceable under the Act regardless of whether the contract was signed and the employment was maintained outside of the State. Repeals provisions concerning the legitimate business interest of the employer; ensuring employees are informed about their obligations; and reformation of covenants not to compete and covenants not to solicit. Makes changes to definitions. Makes conforming changes. Effective January 1, 2026. LRB104 08712 SPS 18766 b A BILL FOR 104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 HB3213 Introduced , by Rep. Anna Moeller SYNOPSIS AS INTRODUCED: 820 ILCS 90/5820 ILCS 90/10820 ILCS 90/15820 ILCS 90/7 rep.820 ILCS 90/20 rep.820 ILCS 90/35 rep. 820 ILCS 90/5 820 ILCS 90/10 820 ILCS 90/15 820 ILCS 90/7 rep. 820 ILCS 90/20 rep. 820 ILCS 90/35 rep. Amends the Illinois Freedom to Work Act. Provides that, on and after January 1, 2026, no employer shall enter into a covenant not to compete or a covenant not to solicit with any employee. Provides that a covenant not to compete or a covenant not to solicit entered into on or after January 1, 2026 is illegal and void regardless of where and when the covenant not to compete or a covenant not to solicit was entered into. Provides that an employer or former employer shall not attempt to enforce a contract that is void and unenforceable under the Act regardless of whether the contract was signed and the employment was maintained outside of the State. Repeals provisions concerning the legitimate business interest of the employer; ensuring employees are informed about their obligations; and reformation of covenants not to compete and covenants not to solicit. Makes changes to definitions. Makes conforming changes. Effective January 1, 2026. LRB104 08712 SPS 18766 b LRB104 08712 SPS 18766 b A BILL FOR
22 104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 HB3213 Introduced , by Rep. Anna Moeller SYNOPSIS AS INTRODUCED:
33 820 ILCS 90/5820 ILCS 90/10820 ILCS 90/15820 ILCS 90/7 rep.820 ILCS 90/20 rep.820 ILCS 90/35 rep. 820 ILCS 90/5 820 ILCS 90/10 820 ILCS 90/15 820 ILCS 90/7 rep. 820 ILCS 90/20 rep. 820 ILCS 90/35 rep.
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1010 Amends the Illinois Freedom to Work Act. Provides that, on and after January 1, 2026, no employer shall enter into a covenant not to compete or a covenant not to solicit with any employee. Provides that a covenant not to compete or a covenant not to solicit entered into on or after January 1, 2026 is illegal and void regardless of where and when the covenant not to compete or a covenant not to solicit was entered into. Provides that an employer or former employer shall not attempt to enforce a contract that is void and unenforceable under the Act regardless of whether the contract was signed and the employment was maintained outside of the State. Repeals provisions concerning the legitimate business interest of the employer; ensuring employees are informed about their obligations; and reformation of covenants not to compete and covenants not to solicit. Makes changes to definitions. Makes conforming changes. Effective January 1, 2026.
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1616 1 AN ACT concerning employment.
1717 2 Be it enacted by the People of the State of Illinois,
1818 3 represented in the General Assembly:
1919 4 Section 5. The Illinois Freedom to Work Act is amended by
2020 5 changing Sections 5, 10, and 15 as follows:
2121 6 (820 ILCS 90/5)
2222 7 Sec. 5. Definitions. In this Act:
2323 8 "Adequate consideration" means (1) the employee worked for
2424 9 the employer for at least 2 years after the employee signed an
2525 10 agreement containing a covenant not to compete or a covenant
2626 11 not to solicit or (2) the employer otherwise provided
2727 12 consideration adequate to support an agreement to not compete
2828 13 or to not solicit, which consideration can consist of a period
2929 14 of employment plus additional professional or financial
3030 15 benefits or merely professional or financial benefits adequate
3131 16 by themselves.
3232 17 "Covenant not to compete" means an agreement between an
3333 18 employer and an employee that is entered into after the
3434 19 effective date of this amendatory Act of the 102nd General
3535 20 Assembly that restricts the employee from performing:
3636 21 (1) any work for another employer for a specified
3737 22 period of time;
3838 23 (2) any work in a specified geographical area; or
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4242 104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 HB3213 Introduced , by Rep. Anna Moeller SYNOPSIS AS INTRODUCED:
4343 820 ILCS 90/5820 ILCS 90/10820 ILCS 90/15820 ILCS 90/7 rep.820 ILCS 90/20 rep.820 ILCS 90/35 rep. 820 ILCS 90/5 820 ILCS 90/10 820 ILCS 90/15 820 ILCS 90/7 rep. 820 ILCS 90/20 rep. 820 ILCS 90/35 rep.
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4545 820 ILCS 90/10
4646 820 ILCS 90/15
4747 820 ILCS 90/7 rep.
4848 820 ILCS 90/20 rep.
4949 820 ILCS 90/35 rep.
5050 Amends the Illinois Freedom to Work Act. Provides that, on and after January 1, 2026, no employer shall enter into a covenant not to compete or a covenant not to solicit with any employee. Provides that a covenant not to compete or a covenant not to solicit entered into on or after January 1, 2026 is illegal and void regardless of where and when the covenant not to compete or a covenant not to solicit was entered into. Provides that an employer or former employer shall not attempt to enforce a contract that is void and unenforceable under the Act regardless of whether the contract was signed and the employment was maintained outside of the State. Repeals provisions concerning the legitimate business interest of the employer; ensuring employees are informed about their obligations; and reformation of covenants not to compete and covenants not to solicit. Makes changes to definitions. Makes conforming changes. Effective January 1, 2026.
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6363 820 ILCS 90/20 rep.
6464 820 ILCS 90/35 rep.
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8383 1 (3) work for another employer that is similar to
8484 2 employee's work for the employer included as a party
8585 3 to the agreement.
8686 4 "Covenant not to compete" also means an agreement between
8787 5 an employer and an employee, entered into after the effective
8888 6 date of this amendatory Act of the 102nd General Assembly,
8989 7 that by its terms imposes adverse financial consequences on
9090 8 the former employee if the employee engages in competitive
9191 9 activities after the termination of the employee's employment
9292 10 with the employer.
9393 11 "Covenant not to compete" does not include (1) a covenant
9494 12 not to solicit, (2) a confidentiality agreement or covenant,
9595 13 (3) a covenant or agreement prohibiting use or disclosure of
9696 14 trade secrets or inventions, (4) invention assignment
9797 15 agreements or covenants, (5) a covenant or agreement entered
9898 16 into by a person purchasing or selling the goodwill of a
9999 17 business or otherwise acquiring or disposing of an ownership
100100 18 interest, (6) clauses or an agreement between an employer and
101101 19 an employee requiring advance notice of termination of
102102 20 employment, during which notice period the employee remains
103103 21 employed by the employer and receives compensation, or (7)
104104 22 agreements by which the employee agrees not to reapply for
105105 23 employment to the same employer after termination of the
106106 24 employee.
107107 25 "Covenant not to solicit" means an agreement that is
108108 26 entered into after the effective date of this amendatory Act
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119119 1 of the 102nd General Assembly between an employer and an
120120 2 employee that (1) restricts the employee from soliciting for
121121 3 employment the employer's employees or (2) restricts the
122122 4 employee from soliciting, for the purpose of selling products
123123 5 or services of any kind to, or from interfering with the
124124 6 employer's relationships with, the employer's clients,
125125 7 prospective clients, vendors, prospective vendors, suppliers,
126126 8 prospective suppliers, or other business relationships.
127127 9 "Earnings" means the compensation, including earned
128128 10 salary, earned bonuses, earned commissions, or any other form
129129 11 of taxable compensation, reflected or that is expected to be
130130 12 reflected as wages, tips, and other compensation on the
131131 13 employee's IRS Form W-2 plus any elective deferrals not
132132 14 reflected as wages, tips, and other compensation on the
133133 15 employee's IRS Form W-2, such as, without limitation, employee
134134 16 contributions to a 401(k) plan, a 403(b) plan, a flexible
135135 17 spending account, or a health savings account, or commuter
136136 18 benefit-related deductions.
137137 19 "Employee" means any individual permitted to work by an
138138 20 employer in an occupation.
139139 21 "Employer" has the meaning given to such term in
140140 22 subsection (c) of Section 3 of the Minimum Wage Law.
141141 23 "Employer" does not include governmental or quasi-governmental
142142 24 bodies.
143143 25 "Construction" means any constructing, altering,
144144 26 reconstructing, repairing, rehabilitating, refinishing,
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155155 1 refurbishing, remodeling, remediating, renovating, custom
156156 2 fabricating, maintenance, landscaping, improving, wrecking,
157157 3 painting, decorating, demolishing, and adding to or
158158 4 subtracting from any building, structure, highway, roadway,
159159 5 street, bridge, alley, sewer, ditch, sewage disposal plant,
160160 6 water works, parking facility, railroad, excavation or other
161161 7 structure, project, development, real property or improvement,
162162 8 or to do any part thereof, whether or not the performance of
163163 9 the work herein described involves the addition to, or
164164 10 fabrication into, any structure, project, development, real
165165 11 property or improvement herein described of any material or
166166 12 article of merchandise.
167167 13 (Source: P.A. 102-358, eff. 1-1-22.)
168168 14 (820 ILCS 90/10)
169169 15 Sec. 10. Prohibiting covenants not to compete and
170170 16 covenants not to solicit.
171171 17 (a) Before January 1, 2026, no No employer shall enter
172172 18 into a covenant not to compete with any employee unless the
173173 19 employee's actual or expected annualized rate of earnings
174174 20 exceeds $75,000 per year. On and after January 1, 2026, no
175175 21 employer shall enter into a covenant not to compete with any
176176 22 employee. This amount shall increase to $80,000 per year
177177 23 beginning on January 1, 2027, $85,000 per year beginning on
178178 24 January 1, 2032, and $90,000 per year beginning on January 1,
179179 25 2037. A covenant not to compete entered into in violation of
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190190 1 this subsection is void and unenforceable.
191191 2 (b) Before January 1, 2026, no No employer shall enter
192192 3 into a covenant not to solicit with any employee unless the
193193 4 employee's actual or expected annualized rate of earnings
194194 5 exceeds $45,000 per year. On and after January 1, 2026, no
195195 6 employer shall enter into a covenant not to solicit with any
196196 7 employee. This amount shall increase to $47,500 per year
197197 8 beginning on January 1, 2027, $50,000 per year beginning on
198198 9 January 1, 2032, and $52,500 per year beginning on January 1,
199199 10 2037. A covenant not to solicit entered into in violation of
200200 11 this subsection is void and unenforceable.
201201 12 (c) (Blank). No employer shall enter into a covenant not
202202 13 to compete or a covenant not to solicit with any employee who
203203 14 an employer terminates or furloughs or lays off as the result
204204 15 of business circumstances or governmental orders related to
205205 16 the COVID-19 pandemic or under circumstances that are similar
206206 17 to the COVID-19 pandemic, unless enforcement of the covenant
207207 18 not to compete includes compensation equivalent to the
208208 19 employee's base salary at the time of termination for the
209209 20 period of enforcement minus compensation earned through
210210 21 subsequent employment during the period of enforcement. A
211211 22 covenant not to compete or a covenant not to solicit entered
212212 23 into in violation of this subsection is void and
213213 24 unenforceable.
214214 25 (d) A covenant not to compete is void and illegal with
215215 26 respect to individuals covered by a collective bargaining
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226226 1 agreement under the Illinois Public Labor Relations Act or the
227227 2 Illinois Educational Labor Relations Act.
228228 3 (e) A covenant not to compete or a covenant not to solicit
229229 4 is void and illegal with respect to individuals employed in
230230 5 construction, regardless of whether an individual is covered
231231 6 by a collective bargaining agreement. This subsection (e) does
232232 7 not apply to construction employees who primarily perform
233233 8 management, engineering or architectural, design, or sales
234234 9 functions for the employer or who are shareholders, partners,
235235 10 or owners in any capacity of the employer.
236236 11 (f) (e) Any covenant not to compete or covenant not to
237237 12 solicit entered into after January 1, 2025 (the effective date
238238 13 of Public Act 103-915) this amendatory Act of the 103rd
239239 14 General Assembly shall not be enforceable with respect to the
240240 15 provision of mental health services to veterans and first
241241 16 responders by any licensed mental health professional in this
242242 17 State if the enforcement of the covenant not to compete or
243243 18 covenant not to solicit is likely to result in an increase in
244244 19 cost or difficulty for any veteran or first responder seeking
245245 20 mental health services.
246246 21 For the purpose of this subsection:
247247 22 "First responders" means emergency medical services
248248 23 personnel, as defined in the Emergency Medical Services (EMS)
249249 24 Systems Act, firefighters, and law enforcement officers.
250250 25 "Licensed mental health professional" means a person
251251 26 licensed under the Clinical Psychologist Licensing Act, the
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262262 1 Clinical Social Work and Social Work Practice Act, the
263263 2 Marriage and Family Therapy Licensing Act, the Nurse Practice
264264 3 Act, or the Professional Counselor and Clinical Professional
265265 4 Counselor Licensing and Practice Act.
266266 5 (Source: P.A. 102-358, eff. 1-1-22; 103-915, eff. 1-1-25;
267267 6 103-921, eff. 1-1-25; revised 11-26-24.)
268268 7 (820 ILCS 90/15)
269269 8 Sec. 15. Enforceability of a covenant not to compete or a
270270 9 covenant not to solicit.
271271 10 (a) A covenant not to compete or a covenant not to solicit
272272 11 entered into on or after January 1, 2026 is illegal and void
273273 12 regardless of where and when the covenant not to compete or a
274274 13 covenant not to solicit was entered into unless (1) the
275275 14 employee receives adequate consideration, (2) the covenant is
276276 15 ancillary to a valid employment relationship, (3) the covenant
277277 16 is no greater than is required for the protection of a
278278 17 legitimate business interest of the employer, (4) the covenant
279279 18 does not impose undue hardship on the employee, and (5) the
280280 19 covenant is not injurious to the public.
281281 20 (b) An employer or former employer shall not attempt to
282282 21 enforce a contract that is void and unenforceable under this
283283 22 Act regardless of whether the contract was signed and the
284284 23 employment was maintained outside of this State.
285285 24 (Source: P.A. 102-358, eff. 1-1-22.)
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296296 1 (820 ILCS 90/7 rep.)
297297 2 (820 ILCS 90/20 rep.)
298298 3 (820 ILCS 90/35 rep.)
299299 4 Section 10. The Illinois Freedom to Work Act is amended by
300300 5 repealing Sections 7, 20, and 35.
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