Illinois Freedom to Work Act Bans Non-Competes for Low-Wage Earners

Illinois lawmakers are on a roll with expanding employee rights. On the heels of enacting several important laws for employees in the past few months, including the Domestic Workers’ Bill of Rights Act and the Child Bereavement Leave Act, our State has continued this positive trend, this time with the Illinois Freedom to Work Act.  This new law bans employers from entering into non-competes with low-wage employees.

The new law goes into effect on January 1, 2017. The law applies to all Illinois employers, regardless of size.  The law covers employees earning $13.00 per hour or less.  Employers can no longer restrict low wage employees from working for another employer or restrict them from working in specific geographic areas following the employee’s job departure.  Any non-competes between an employer and a low-wage earner will be illegal and void.

Non-competes are intended to prevent an employee who has access to a company’s confidential information from taking that information and using it for a competitive advantage at another employer. Because of this, non-competes are typically seen with higher-wage earners who have knowledge of proprietary information or trade secrets.  Their enforceability with lower wage earners, who typically are not privy to this sort of information, is highly questionable as a result and often unsupported by the courts.  Despite that, employers have tested the boundaries of that enforceability, frequently using non-competes with lower-wage earners.

One of the most highly publicized instances of this practice occurred with the sandwich chain Jimmy John’s.  Indeed, the new law follows litigation by the Illinois Attorney General against the sandwich franchise.  The Attorney General challenged Jimmy John’s use of non-competes for its sandwich makers and delivery drivers.  Like the jobs of other low wage earners, sandwich making and delivery driving do not involve the types of trade secrets that non-competes are intended to protect.

Unfortunately, employers like Jimmy John’s use non-competes with low-wage earners because they have a chilling effect on employees. Namely, they discourage employees from seeking better jobs elsewhere and allow employers to keep wages and benefits down.  This is exactly why the Attorney General took a strong interest in the Jimmy John’s situation.  Once that litigation began, and under intense public pressure, Jimmy John’s stopped its practice of using non-competes with its lower-wage earners.  But, the Attorney General cannot police every employer, and many lower-wage earners do not have the resources to seek help from a private attorney to challenge these agreements.  Fortunately, the Illinois Freedom to Work Act fills those gaps by making a clear and universal law that bars all Illinois employers from requiring low wage workers to sign non-competes.

If any group of employees needs added protections from these sorts of employer abuses, it’s low-wage earners whose options are already limited. We are so pleased that Illinois recognized that the law needed to be strengthened in this area in favor of these employees.  Low wage earners can breathe a sigh of relief with this new law, knowing with certainty that their job mobility and freedom to work where they choose is protected.