On May 31, 2021, the Illinois legislature passed SB 672, a bill that amends the Illinois Freedom to Work Act, the state’s non-compete statute. Governor J.B. Pritzker is expected to sign the bill into law. SB 672 would apply to restrictive covenant agreements entered into after January 1, 2022, and introduces a number of new restrictions on not only non-compete covenants, but also employee and customer non-solicitation covenants.
One of the most significant aspects of the bill is that it codifies the rule set forth in Fifield v. Premier Dealer Services, Inc., 2013 IL App (1st) 120327, which held that continued employment is not sufficient consideration for a restrictive covenant unless the employee remains employed for at least two years. Under SB 672, a restrictive covenant is supported by “adequate consideration” if (1) the employee worked for the employer for at least two years after signing a restrictive covenant agreement, or (2) the employer otherwise provided consideration adequate to support the restrictive covenant agreement, “which consideration can consist of a period of employment plus additional professional or financial benefits or merely professional or financial benefits adequate by themselves.” The bill does not define what type or amount of “professional or financial benefits” would be adequate.
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