HB4565 104TH GENERAL ASSEMBLY

LRB104 17710 SPS 31141 b

104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
HB4565

Introduced 1/30/2026, by Rep. Laura Faver Dias and Martha Deuter

SYNOPSIS AS INTRODUCED:

820 ILCS 90/10

Amends the Illinois Freedom to Work Act. Provides that any covenant not to compete or covenant not to solicit entered into after the effective date of the amendatory Act shall not be enforceable with respect to individuals employed by health care facilities as health care professionals in the State regardless of whether an individual is covered by a collective bargaining agreement. Effective immediately.

A BILL FOR

AN ACT concerning employment.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Illinois Freedom to Work Act is amended by changing Section 10 as follows:

(820 ILCS 90/10)

Sec. 10. Prohibiting covenants not to compete and covenants not to solicit.

(a) No employer shall enter into a covenant not to compete with any employee unless the employee's actual or expected annualized rate of earnings exceeds $75,000 per year. This amount shall increase to $80,000 per year beginning on January 1, 2027, $85,000 per year beginning on January 1, 2032, and $90,000 per year beginning on January 1, 2037. A covenant not to compete entered into in violation of this subsection is void and unenforceable.

(b) No employer shall enter into a covenant not to solicit with any employee unless the employee's actual or expected annualized rate of earnings exceeds $45,000 per year. This amount shall increase to $47,500 per year beginning on January 1, 2027, $50,000 per year beginning on January 1, 2032, and $52,500 per year beginning on January 1, 2037. A covenant not to solicit entered into in violation of this subsection is void and unenforceable.

(c) No employer shall enter into a covenant not to compete or a covenant not to solicit with any employee who an employer terminates or furloughs or lays off as the result of business circumstances or governmental orders related to the COVID-19 pandemic or under circumstances that are similar to the COVID-19 pandemic, unless enforcement of the covenant not to compete includes compensation equivalent to the employee's base salary at the time of termination for the period of enforcement minus compensation earned through subsequent employment during the period of enforcement. A covenant not to compete or a covenant not to solicit entered into in violation of this subsection is void and unenforceable.

(d) A covenant not to compete is void and illegal with respect to individuals covered by a collective bargaining agreement under the Illinois Public Labor Relations Act or the Illinois Educational Labor Relations Act.

(e) A covenant not to compete or a covenant not to solicit is void and illegal with respect to individuals employed in construction, regardless of whether an individual is covered by a collective bargaining agreement. This subsection (e) does not apply to construction employees who primarily perform management, engineering or architectural, design, or sales functions for the employer or who are shareholders, partners, or owners in any capacity of the employer.

(f) Any covenant not to compete or covenant not to solicit entered into after January 1, 2025 (the effective date of Public Act 103-915) shall not be enforceable with respect to the provision of mental health services to veterans and first responders by any licensed mental health professional in this State if the enforcement of the covenant not to compete or covenant not to solicit is likely to result in an increase in cost or difficulty for any veteran or first responder seeking mental health services.

For the purpose of this subsection:

"First responders" means any persons who are currently or formerly employed as: (i) emergency medical services personnel, as defined in the Emergency Medical Services (EMS) Systems Act, (ii) firefighters, and (iii) law enforcement officers.

"Licensed mental health professional" means a person licensed under the Clinical Psychologist Licensing Act, the Clinical Social Work and Social Work Practice Act, the Marriage and Family Therapy Licensing Act, the Nurse Practice Act, or the Professional Counselor and Clinical Professional Counselor Licensing and Practice Act.

(g) Any covenant not to compete or covenant not to solicit entered into after the effective date of this amendatory Act of the 104th General Assembly shall not be enforceable with respect to individuals employed by health care facilities as health care professionals in this State regardless of whether an individual is covered by a collective bargaining agreement.

For the purpose of this subsection:

"Health care facility" means a hospital or hospital affiliate as those terms are defined in the Hospital Licensing Act or an ambulatory surgical treatment center as that term is defined in the Ambulatory Surgical Treatment Center Act.

"Health care professional" means a physician licensed to practice medicine under all of its branches under the Medical Practice Act of 1987, an advanced practice registered nurse licensed under the Nurse Practice Act, or a physician assistant licensed under the Physician Assistant Practice Act of 1987.

(Source: P.A. 103-915, eff. 1-1-25; 103-921, eff. 1-1-25; 103-1062, eff. 2-7-25; 104-417, eff. 8-15-25.)

Section 99. Effective date. This Act takes effect upon becoming law.