ILLINOIS EMPLOYEE NON-COMPETITION AGREEMENT
[// GUIDANCE: Drafted to comply with 820 ILL. COMP. STAT. 90/1–90/99 (Illinois Freedom to Work Act) and prevailing Illinois common-law reasonableness standards.]
TABLE OF CONTENTS
- Document Header
- Definitions
- Consideration & Statutory Disclosures
- Restrictive Covenants
4.1 Non-Competition
4.2 Tolling
4.3 Carve-Outs - Representations & Warranties
- Covenants & Continuing Obligations
- Default & Remedies
- Risk Allocation
- Dispute Resolution
- General Provisions
- Execution Block
1. DOCUMENT HEADER
THIS ILLINOIS EMPLOYEE NON-COMPETITION AGREEMENT (this “Agreement”) is entered into effective as of [EFFECTIVE DATE] (the “Effective Date”), by and between:
• [EMPLOYER LEGAL NAME], a [STATE] [corporation/LLC] with its principal place of business at [ADDRESS] (“Employer”); and
• [EMPLOYEE FULL NAME], residing at [ADDRESS] (“Employee”).
Employer and Employee are sometimes referred to individually as a “Party” and collectively as the “Parties.”
Recitals
A. Employer is engaged in the business of [GENERAL DESCRIPTION] (the “Business”).
B. Employee will occupy a position in which Employee will receive specialized training and access to Confidential Information (defined below).
C. Employer desires to protect its legitimate business interests, and Employee wishes to accept employment and the consideration described herein, subject to the terms of this Agreement.
NOW, THEREFORE, for good and valuable consideration, the sufficiency of which is acknowledged, the Parties agree as follows:
2. DEFINITIONS
For purposes of this Agreement, the following terms have the meanings set forth below. All capitalized terms used but not defined have the meanings assigned elsewhere herein.
“Cause” means [DEFINE].
“Confidential Information” means all non-public information relating to Employer or its affiliates, including trade secrets as defined under the Illinois Trade Secrets Act.
“Customer” means any person or entity to whom Employer provided products or services and with whom Employee had Material Contact within the twelve (12) months preceding termination.
“Material Contact” means direct interaction between Employee and a Customer for the purpose of furthering the Business.
“Restricted Period” means the twelve (12) month period immediately following the Termination Date, subject to tolling under Section 4.2.
“Restricted Territory” means the geographic area within a twenty-five (25) mile radius of any office or facility that (i) Employer operates and (ii) at which Employee, at any time during the last twelve (12) months of employment, regularly performed services or had Material Contact with Customers.
“Termination Date” means the date Employee’s employment with Employer ends for any reason.
3. CONSIDERATION & STATUTORY DISCLOSURES
3.1 Adequate Consideration. Employee acknowledges that the following constitute adequate and independent consideration for the covenants herein:
(a) Initial employment with Employer;
(b) A signing bonus of $[AMOUNT]; and
(c) Access to Confidential Information and specialized training not otherwise available to Employee.
[// GUIDANCE: Illinois requires “adequate consideration,” which may be satisfied by (i) two years of continued employment after signing or (ii) other sufficient consideration such as a cash payment or professional development. Adjust subsection (c) or add other consideration if two-year employment is not guaranteed.]
3.2 Statutory Notice. Pursuant to 820 ILL. COMP. STAT. 90/20(a):
(a) Employee is hereby advised to consult with an attorney before signing this Agreement.
(b) Employee acknowledges receipt of this Agreement at least fourteen (14) calendar days before the earlier of the Effective Date or the commencement of employment and has had the opportunity to review it.
(c) Employee represents that Employee’s expected annualized earnings exceed the statutory threshold then in effect for enforceability of non-competition covenants ($75,000 for 2022–2026, adjusted thereafter).
3.3 Voluntary Execution. Employee enters into this Agreement voluntarily and knowingly.
4. RESTRICTIVE COVENANTS
4.1 Non-Competition. During employment and throughout the Restricted Period, Employee shall not, within the Restricted Territory, directly or indirectly:
(a) own, manage, operate, control, be employed by, consult for, or otherwise render services to a Competing Business; or
(b) solicit or divert any Customer for the purpose of providing products or services in competition with the Business.
[// GUIDANCE: Narrow geographic and activity-based restrictions bolster reasonableness under Illinois law.]
4.2 Tolling. The Restricted Period shall be tolled and automatically extended by any period during which Employee is in breach of Section 4.1.
4.3 Carve-Outs. Nothing in this Agreement prohibits Employee from:
(a) owning up to two percent (2%) of any class of securities of a publicly traded company;
(b) working in a capacity that is not competitive with the Business; or
(c) engaging in activities protected by 29 U.S.C. § 157 or other applicable law.
5. REPRESENTATIONS & WARRANTIES
5.1 Mutual Authority. Each Party represents that it has full power and authority to enter into and perform this Agreement.
5.2 Non-Conflict. Employee represents that the execution of this Agreement does not violate any other contractual or legal obligation.
5.3 Survival. Representations and warranties survive the Termination Date to the extent necessary to enforce this Agreement.
6. COVENANTS & CONTINUING OBLIGATIONS
6.1 Confidentiality. Employee shall maintain the confidentiality of Confidential Information both during employment and for five (5) years thereafter, or for trade secrets, until such information ceases to qualify as a trade secret.
6.2 Return of Property. Within three (3) business days after the Termination Date, Employee shall return all tangible and electronic property of Employer.
6.3 Notice of Subsequent Employment. During the Restricted Period, Employee shall provide Employer, upon request, the identity of any new employer and a description of Employee’s job duties sufficient to assess compliance.
7. DEFAULT & REMEDIES
7.1 Events of Default. Any breach of Sections 4 or 6 constitutes a default.
7.2 Notice & Cure. For breaches capable of cure, Employer shall provide written notice and a five (5) day cure period; breaches of confidentiality or non-competition are deemed incapable of cure.
7.3 Injunctive Relief. Employee acknowledges that money damages would be an inadequate remedy and agrees that Employer shall be entitled to immediate injunctive relief, in addition to any other remedies at law or equity, to enforce this Agreement.
7.4 Attorneys’ Fees. Employee shall indemnify Employer for all reasonable attorneys’ fees and costs incurred in enforcing this Agreement following a final, non-appealable determination of Employee’s breach.
7.5 Cumulative Remedies. All rights and remedies are cumulative and may be exercised singularly or concurrently.
8. RISK ALLOCATION
8.1 Indemnification by Employee. Employee shall indemnify, defend, and hold harmless Employer and its affiliates from any losses arising out of Employee’s breach of this Agreement.
8.2 No Liability Cap. The Parties agree that no contractual limitation of liability applies to either Party’s breach of Sections 4 or 6.
8.3 Insurance. [OPTIONAL—Employer may require Employee to obtain professional liability insurance covering negligent or wrongful acts.]
8.4 Force Majeure. Neither Party shall be liable for failure to perform caused by events beyond its reasonable control; provided that this Section does not excuse Employee’s post-employment restrictive covenants.
9. DISPUTE RESOLUTION
9.1 Governing Law. This Agreement and any dispute hereunder shall be governed by the internal laws of the State of Illinois, without regard to its conflict-of-laws rules.
9.2 Forum Selection. The Parties consent to the exclusive jurisdiction of the state courts located in [COUNTY], Illinois, and waive any objection to venue therein.
9.3 Arbitration. [OPTIONAL] Any dispute arising out of or relating to this Agreement may, at Employer’s sole election, be resolved by confidential, binding arbitration administered by [ARBITRATION ADMINISTRATOR] under its employment rules. The arbitrator may award injunctive relief consistent with Section 7.3.
[// GUIDANCE: Delete Section 9.3 if Employer does not wish to reserve arbitration rights.]
9.4 Jury Waiver. [OPTIONAL] EACH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ANY RIGHT TO A TRIAL BY JURY.
9.5 Equitable Relief Reservation. Nothing in this Article limits Employer’s right to seek temporary, preliminary, or permanent injunctive relief in any court of competent jurisdiction.
10. GENERAL PROVISIONS
10.1 Amendment & Waiver. No amendment or waiver is effective unless in a writing signed by both Parties.
10.2 Assignment. Employee may not assign any rights or delegate any duties without Employer’s prior written consent; Employer may assign to a successor by merger, reorganization, or asset sale.
10.3 Severability & Judicial Reformation. If any provision is found unenforceable, a court of competent jurisdiction may modify the provision to the minimum extent necessary to render it enforceable, and the remainder of the Agreement shall remain in full force.
10.4 Entire Agreement. This Agreement constitutes the entire understanding between the Parties and supersedes all prior oral or written agreements on the subject matter.
10.5 Successors & Assigns. This Agreement is binding upon and inures to the benefit of the Parties and their respective successors and permitted assigns.
10.6 Counterparts; Electronic Signature. This Agreement may be executed in counterparts, each of which is deemed an original, and signatures delivered electronically shall be deemed originals for all purposes.
10.7 Notices. All notices shall be in writing and deemed given when delivered personally, sent by certified mail (return receipt requested), or sent by nationally recognized overnight courier to the addresses set forth in the preamble (or such other address as either Party may designate).
11. EXECUTION BLOCK
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date.
| EMPLOYER | EMPLOYEE |
|---|---|
| [EMPLOYER LEGAL NAME] | [EMPLOYEE FULL NAME] |
| By: ________ | ______ |
| Name: [NAME] | |
| Title: [TITLE] | |
| Date: _____ | Date: _______ |
[OPTIONAL NOTARY ACKNOWLEDGMENT]
STATE OF _ )
: SS
COUNTY OF _____)
Subscribed and sworn before me on ____, 20__, by [NAME].
Notary Public
My Commission Expires: ____
[// GUIDANCE:
1. Verify that Employee’s projected earnings exceed the statutory threshold at the time of execution.
2. Confirm that the Restricted Period and Restricted Territory are narrowly tailored to the Employee’s actual duties and geographic reach.
3. Provide Employee with a copy of this Agreement at least 14 days before the Effective Date or the start of employment, whichever is earlier, and retain evidence of delivery.
4. Re-evaluate enforceability whenever the Employee’s role or Illinois law materially changes.]