SB0858ham001 100TH GENERAL ASSEMBLY

Rep. Melissa Conyears-Ervin

Filed: 5/19/2017

10000SB0858ham001 LRB100 06081 JLS 26665 a

AMENDMENT TO SENATE BILL 858

AMENDMENT NO. ______. Amend Senate Bill 858 on page 1, by replacing line 4 with the following:

"Section 1. Short title. This Act may be cited as the Prohibition of Contracts in Restraint of Trade Act.

Section 5. Policy and intent. Current estimates suggest 20% of employees in the United States have restrictions on job movement created by non-compete clauses in their employment contracts.

The free movement of labor has the positive effects of: increasing competition in the labor market; increasing wages; improving career satisfaction; developing regional economic clusters; and increasing economic growth through more rapid diffusion of expertise.

The public policy and intent of this Act is to allow workers in Illinois maximum freedom to change employers.

Section 10. Definitions. In this Act:

"Business entity" means a partnership (including a limited partnership or a limited liability partnership), limited liability company (including a series of a limited liability company formed under the laws of a jurisdiction that recognizes such a series), or corporation.

"Owner of a business entity" means a partner, in the case of a business entity that is a partnership (including a limited partnership or a limited liability partnership), or a member, in the case of a business entity that is a limited liability company (including a series of a limited liability company formed under the laws of a jurisdiction that recognizes such a series), or an owner of capital stock, in the case of a business entity that is a corporation.

"Ownership interest" means a partnership interest, in the case of a business entity that is a partnership (including a limited partnership a limited liability partnership), a membership interest, in the case of a business entity that is a limited liability company (including a series of a limited liability company formed under the laws of a jurisdiction that recognizes such a series), or a capital stockholder, in the case of a business entity that is a corporation.

"Subsidiary" means a business entity over which the selling business entity has voting control or from which the selling business entity has a right to receive a majority share of distributions upon dissolution or other liquidation of the business entity (or has both voting control and a right to receive these distributions).

Section 15. Certain contracts void. Except as provided in this Act, any contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.

Section 20. Sale of business; agreement not to compete. A person who sells the goodwill of a business, an owner of a business entity selling or otherwise disposing of all of his or her ownership interest in the business entity, or an owner of a business entity that sells (1) all or substantially all of its operating assets together with the goodwill of the business entity, (2) all or substantially all of the operating assets of a division or a subsidiary of the business entity together with the goodwill of that division or subsidiary, or (3) all of the ownership interest of any subsidiary may agree with the buyer to refrain from carrying on a similar business within a specified geographic area in which the business so sold, or that of the business entity, division, or subsidiary has been carried on, so long as the buyer, or any person deriving title to the goodwill or ownership interest from the buyer, carries on a like business therein.

Section 25. Activities of partners.

(a) A partner may, upon or in anticipation of any of the circumstances described in subsection (b), agree that the partner will not carry on a similar business within a specified geographic area where the partnership business has been transacted, so long as any other member of the partnership, or any person deriving title to the business or its goodwill from any such other member of the partnership, carries on a like business therein.

(b) Subsection (a) applies to:

(1) a dissolution of the partnership; or

(2) dissociation of the partner from the partnership.

Section 30. Activities of members; limited liability companies. A member may, upon or in anticipation of a dissolution of, or the termination of the member's interest in, a limited liability company (including a series of a limited liability company formed under the laws of a jurisdiction recognizing such a series), agree that the member will not carry on a similar business within a specified geographic area where the limited liability company business has been transacted, so long as any other member of the limited liability company, or any person deriving title to the business or its goodwill from any such other member of the limited liability company, carries on a like business therein.

Section 35. Protections for trade secrets. Nothing in this Act is intended to supersede the Illinois Trade Secrets Act, nor is this Act intended to interfere with remedies for misappropriation of trade secrets under the Illinois Trade Secrets Act.

Section 40. Broadcast Industry Free Market Act; rules governing attorney conduct. Nothing in this Act is intended to supersede the Broadcast Industry Free Market Act or any rules adopted by the Supreme Court of the State of Illinois governing attorney conduct.

Section 45. Telephone answering service; customer list.

The customer list, including the names, addresses, and identity of customers, of a telephone answering service constitutes a trade secret and confidential information of, and belong to, the owner of the telephone answering service.

Section 50. Employment agency; customer list.

(a) Except as provided in subsection (b), the customer list, including the names, addresses and identity of all employer customers who have listed job orders with an employment agency within a period of 180 days prior to the separation of an employee from the agency and including the names, addresses, and identity of all applicant customers of the employment agency, constitutes a trade secret and confidential information of, and belong to, the employment agency.

(b) Notwithstanding the provisions of subsection (a), no liability shall attach to, and no cause of action shall arise from, the use of a customer list of an employment agency by a former employee who enters into business as an employment agency more than one year immediately following termination of his or her employment.

Section 55. Limitation on applicability of Act. The prohibitions applicable to non-compete agreements contained in this Act apply only to employment contracts covering employees earning less than $1,000,000 annually per calendar year from any combination of salary, benefits, equity, commissions, bonuses, or other forms of compensation.

Section 90. The Illinois Freedom to Work Act is amended by".