|
||||||||||||||||||||
|
||||||||||||||||||||
| ||||||||||||||||||||
| ||||||||||||||||||||
| ||||||||||||||||||||
1 | AN ACT concerning employment.
| |||||||||||||||||||
2 | Be it enacted by the People of the State of Illinois,
| |||||||||||||||||||
3 | represented in the General Assembly:
| |||||||||||||||||||
4 | Section 1. Short title. This Act may be cited as the | |||||||||||||||||||
5 | Employment Noncompete Agreement Act. | |||||||||||||||||||
6 | Section 5. Finding. The General Assembly finds as a matter | |||||||||||||||||||
7 | of public policy that all employers have vested, protectable | |||||||||||||||||||
8 | interests in their customers, clients, and identified | |||||||||||||||||||
9 | prospects which are legitimately protectable through the use of | |||||||||||||||||||
10 | noncompete agreements. | |||||||||||||||||||
11 | Section 10. Definition. As used in this Act: | |||||||||||||||||||
12 | "Annualized compensation" means all salary, commissions, | |||||||||||||||||||
13 | and cash bonuses received by an employee during the 120-day | |||||||||||||||||||
14 | period ending on the last day of the month immediately | |||||||||||||||||||
15 | preceding the month in which the employer-employee | |||||||||||||||||||
16 | relationship is terminated, multiplied by 3. | |||||||||||||||||||
17 | "Noncompete agreement" means an agreement between an | |||||||||||||||||||
18 | employer and an employee that is specifically designed to | |||||||||||||||||||
19 | impede the ability of an employee from competing with an | |||||||||||||||||||
20 | employer upon the termination of the employment relationship. | |||||||||||||||||||
21 | Section 15. Requirements. |
| |||||||
| |||||||
1 | (a) A noncompete agreement is valid if it meets all of the | ||||||
2 | following criteria: | ||||||
3 | (1) The noncompete agreement must be in writing and be | ||||||
4 | signed by both the employee and employer. | ||||||
5 | (2) The noncompete agreement may prohibit any | ||||||
6 | solicitation of an employer's existing customers, clients, | ||||||
7 | identified prospective customers, and other employees | ||||||
8 | during the period of any post-employment restriction | ||||||
9 | period. | ||||||
10 | (3) The duration of a post-employment restriction | ||||||
11 | period must have a reasonable relationship to an employer's | ||||||
12 | position and salary at the time of termination and may not | ||||||
13 | exceed the applicable maximum period as follows: | ||||||
14 | (A) If the employee's annualized compensation | ||||||
15 | at the time of termination is less than $50,000, | ||||||
16 | the maximum period is 6 months. | ||||||
17 | (B) If the employee's annualized compensation | ||||||
18 | at the time of termination is at least $50,000 but | ||||||
19 | less than $100,000, the maximum period is 9 months. | ||||||
20 | (C) If the employee's annualized compensation | ||||||
21 | at the time of termination is at least $100,000 but | ||||||
22 | less than $150,000, the maximum period is 12 | ||||||
23 | months. | ||||||
24 | (D) If the employee's annualized compensation | ||||||
25 | at the time of termination is at least $150,000, | ||||||
26 | the maximum period is 18 months. |
| |||||||
| |||||||
1 | (b) No specific or additional consideration is required to | ||||||
2 | be paid by an employer to an employee to enforce a noncompete | ||||||
3 | agreement. | ||||||
4 | Section 20. Remedies. | ||||||
5 | (a) The prevailing party in a proceeding to enforce a valid | ||||||
6 | noncompete agreement is entitled to recover damages, costs and | ||||||
7 | expenses, and reasonable attorney's fees.
| ||||||
8 | (b) A subsequent employer of an employee who is a party to | ||||||
9 | a valid noncompete agreement must honor the noncompete | ||||||
10 | agreement. A subsequent employer who aids and abets an | ||||||
11 | employee's breach of a valid noncompete agreement is liable for | ||||||
12 | damages, costs and expenses, and reasonable attorney's fees | ||||||
13 | incurred by the employer who is a party to the valid noncompete | ||||||
14 | agreement. | ||||||
15 | Section 25. Applicability. | ||||||
16 | (a) This Act applies to noncompete agreements entered into | ||||||
17 | on or after its effective date. | ||||||
18 | (b) This Act does not apply to a contract to which the | ||||||
19 | Broadcast Industry Free Market Act applies. | ||||||
20 | (c) This Act shall not be construed to affect or amend the | ||||||
21 | Illinois Trade Secrets Act.
|