HB1642 amends the Illinois Freedom to Work Act to further restrict when employers may use noncompete and nonsolicitation agreements. The bill would set a much higher earnings threshold for these covenants beginning January 1, 2026: employers could not require a covenant not to compete or a covenant not to solicit unless the employee’s actual or expected annualized earnings exceed $300,000 per year. Under the bill text, any agreement made in violation of these limits would be void and unenforceable.
The bill also preserves and reinforces several existing protections for workers and certain professions. It continues to bar noncompete agreements for employees covered by collective bargaining agreements and for workers in construction, with limited exceptions for certain management, engineering, design, sales, ownership, or partnership roles. It also maintains the special rule limiting enforcement of restrictive covenants against licensed mental health professionals providing services to veterans and first responders when enforcement would likely increase cost or difficulty of access to care. The bill is effective January 1, 2026.
Impact
If enacted, HB1642 would substantially narrow the use of restrictive covenants in Illinois employment contracts by raising the salary threshold for both noncompete and nonsolicitation agreements to $300,000, thereby making these agreements unavailable for most employees. It would amend Section 10 of the Illinois Freedom to Work Act and would make any prohibited covenant void and unenforceable, affecting employers, employees, and contract drafting practices across the state. The bill would also continue to limit enforcement in construction, unionized workplaces, and certain mental health service settings.
Sentiment
No committee transcripts or recorded votes were provided, so there is no direct evidence of debate or formal support/opposition in the available record. Based on the bill’s structure, the measure appears worker-protective and aimed at limiting employer restraints on labor mobility, especially for lower- and middle-income workers. The absence of voting history means overall legislative sentiment cannot be measured from the supplied materials.
Contention
The main point of contention is likely the very large increase in the earnings threshold for enforceable restrictive covenants, which would sharply reduce employers’ ability to use noncompetes and nonsolicitation clauses. Employers and business groups would likely argue that the bill is too restrictive and could hinder protection of trade secrets, client relationships, and investment in employee training, while worker advocates would likely support the bill as a way to improve job mobility and wage growth. Existing carve-outs for construction, collective bargaining, and mental health services suggest the bill also reflects policy judgments about sectors where restrictive covenants are especially problematic.