Independent Contractor Work Agreement With Non Compete Clause In Illinois
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For employees who are not low-wage employees, under Illinois common law, non-competes are enforceable if the employer terminated employment in good faith and with good cause (Rao v. Rao, 718 F. 2d 219, 222-23 (7th Cir. 1983)).
Non-compete agreements usually aren't valid when working with independent contractors. You're more likely to have a valid non-compete agreement with an employee than an independent contractor.
Non-compete provisions typically prohibit a former employee from working for a competitor for a period of time following the end of his employment. To be enforceable in Illinois, a non-compete agreement must be reasonably restricted in scope, geographic area, and duration.
Prohibits employers from entering into a covenant not to compete or covenant not to solicit after January 1, 2026. Any such covenants entered into on or after January 1, 2026 are deemed illegal and void, even if the contract was signed and the employment occurred outside of Illinois.
The ban covers all non-competes for U.S. workers (including employees and independent contractors) with limited carve-outs, and is subject to certain exceptions based on the FTC's statutory authority.
For independent contractors, no prohibitions on working for a client's competitor, during or after the contractor is providing services to the client, are legal.
Can Independent Contractors Be Subject To Non-Compete Agreements Under Illinois Law? The Illinois Freedom to Work Act does not explicitly address independent contractors.
On April 23, 2024, the Federal Trade Commission (FTC) published its final rule regarding non-compete clauses. The final rule bans most non-compete clauses between employers and their workers. The effective date of the final rule is September 4, 2024.
For employees who are not low-wage employees, under Illinois common law, non-competes are enforceable if the employer terminated employment in good faith and with good cause (Rao v. Rao, 718 F.
Illinois prohibits non-compete agreements between an employer and low-wage employees, including non-competes that restrict a low- wage employee from performing work in a specified geographical area, and work for another employer that is similar to the employee's work for the employer that is party to the agreement (see ...