HB4923 Summary: Illinois Covenants Not to Compete Act

• Creates the Illinois Covenants Not to Compete Act establishing enforceable standards for non-compete agreements, effective January 1, 2011.

• Restricts enforcement of covenants not to compete to "key employees" or "key independent contractors" only, defined by criteria including executive involvement, customer contact, access to trade secrets, industry reputation, or being in the top 5% of earners.

• Requires non-compete agreements to either be disclosed in writing at least 2 weeks before employment begins or be supported by material advancement, promotion, or bonus compensation.

• Establishes rebuttable presumptions that covenants exceeding 1 year duration, extending beyond the geographic area where services were provided, or covering work beyond the employee's actual role are presumed unreasonable.

• Grants courts discretion to modify overly broad covenants, prevents damages for pre-modification breaches, entitles prevailing promisors to attorney's fees, and allows promisors to seek declaratory judgments on their rights.