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Key Takeaways
- Not every Illinois non-compete is enforceable.
Even if your agreement contains a non-compete clause, Illinois law requires that it meet specific statutory and common law requirements.
- Healthcare professionals earning more than the statutory income thresholds may still be subject to valid restrictions.
Income alone does not determine enforceability. Courts also examine consideration, reasonableness, and whether the restriction protects a legitimate business interest.
- Do not assume the agreement is automatically enforceable or unenforceable.
Before signing a new contract or changing employers, have an attorney review the agreement to understand your legal options.
Many Illinois Healthcare Non-Competes Are Still Enforceable—But Not All
If you’re a physician, therapist, nurse practitioner, or other healthcare professional, your employment agreement may contain a non-compete clause that restricts where and when you can practice after leaving your employer.
In recent years, Illinois lawmakers and federal regulators have taken steps to limit the use of non-compete agreements, leading many healthcare professionals to wonder whether these restrictions are still enforceable. The answer is often more complicated than a simple yes or no.
Illinois has not banned non-compete agreements. However, state law now imposes significant limitations on when employers can require them and how they must be drafted. Even when a non-compete is permitted, it must satisfy several legal requirements before a court will enforce it.
Whether you are considering a new position, preparing to leave your current employer, or facing threats of enforcement, understanding your rights is critical before making any career decisions.
Illinois Law Limits Non-Compete Agreements
The Illinois Freedom to Work Act significantly changed how non-compete agreements are treated in the state.
Since January 1, 2022, employers generally cannot enter into non-compete agreements with employees earning $75,000 or less per year. The law also prohibits non-solicitation agreements for employees earning $45,000 or less annually. These compensation thresholds are scheduled to increase every five years through 2037.
However, many healthcare professionals earn above these thresholds. As a result, physicians, advanced practice providers, therapists, and healthcare executives may still be asked to sign enforceable restrictive covenant agreements.
It is also important to understand that these statutory changes generally apply to agreements entered into on or after January 1, 2022. Older agreements may be evaluated under prior Illinois case law, which often focuses heavily on whether the employee received adequate consideration in exchange for agreeing to the restriction.
Does Illinois Ban Non-Compete Agreements?
No. Illinois restricts the use of non-compete agreements, but it does not prohibit them altogether. Healthcare employers may still require non-compete provisions when permitted by law, provided the restrictions satisfy the legal standards discussed below.
Your Employer Must Give You Time to Review the Agreement
Illinois law requires employers to provide certain protections before an employee signs a non-compete agreement. Specifically, the employer must:
- Advise the employee in writing to consult with an attorney before signing; and
- Provide at least 14 calendar days to review the agreement.
These requirements are intended to ensure that employees have an opportunity to understand the legal and professional consequences of agreeing to post-employment restrictions.
For healthcare professionals, this review period can be particularly important because non-compete provisions often affect future employment opportunities, practice ownership plans, referral relationships, and telehealth services. If your employer failed to follow these requirements, that fact may become relevant if you challenge the agreement in the future.
What Makes a Non-Compete Enforceable in Illinois?
Including a non-compete clause in an employment agreement does not guarantee its enforcement. Illinois courts examine several factors when determining whether a restrictive covenant is valid. These often include:
The Restriction Must Protect a Legitimate Business Interest
Employers cannot use non-compete agreements solely to prevent competition. Instead, the restriction must protect a legitimate business interest. In healthcare settings, employers often argue that a non-compete is necessary to protect patient relationships, referral sources, confidential information, or specialized business investments.
The stronger the connection between the restriction and the employer’s legitimate interests, the more likely the agreement is to withstand scrutiny.
The Restrictions Must Be Reasonable
Courts closely evaluate whether a non-compete is reasonable in scope. This typically includes reviewing:
- Geographic restrictions
- Duration of the restriction
- Activities prohibited by the agreement
For example, a restriction preventing a physician from practicing anywhere in Illinois for three years may be viewed very differently than a restriction limited to a specific service area for a shorter period. The broader the restriction, the greater the risk that a court may refuse to enforce it.
The Restriction Cannot Create Undue Hardship
Illinois courts also consider whether enforcement would create an unreasonable hardship on the employee. A healthcare professional may have a stronger argument against enforcement if the restriction effectively prevents them from earning a living in their chosen specialty or requires relocation from an established community.
Courts often balance the employer’s interests against the practical impact on the employee.
The Agreement Must Be Supported by Adequate Consideration
One of the most frequently litigated issues in Illinois non-compete disputes is whether the employee received adequate consideration, which is a legal doctrine that relates to an employee receiving something of value in exchange for agreeing to a restrictive covenant.
Illinois courts have frequently held that continued employment alone may be insufficient consideration if the employee does not remain employed for a substantial period. While every situation is different, courts have often looked to whether the employee remained employed for at least two years after signing the agreement. Additional consideration may include:
- Signing bonuses
- Increased compensation
- Promotions
- Equity opportunities
- Additional benefits
For example, a physician who signs a non-compete and leaves the practice within a year without receiving any additional benefit may have stronger arguments that the agreement lacks adequate consideration.
See our related video, “Non-competition Agreements in Healthcare.”
Can Your Employer Really Stop You From Practicing?
Many healthcare professionals assume that a signed non-compete automatically prevents them from accepting another position. Others assume the opposite and believe courts never enforce these agreements. Neither assumption is correct.
Whether a healthcare employer can successfully prevent you from practicing depends on the specific situation, including:
- The language of the agreement
- Your specialty
- The geographic restrictions
- The communities you served
- The duration of the restriction
- The consideration you received
- The employer’s legitimate business interests
In many cases, employers and employees negotiate resolutions rather than fully litigating enforcement disputes. Understanding the strengths and weaknesses of your agreement before making a career move can significantly improve your negotiating position.
If Your Employer Tries to Enforce an Invalid Non-Compete
Illinois law provides protections for employees facing unenforceable restrictive covenants. If an employer attempts to enforce a non-compete and does not prevail, the employer may be required to pay the employee’s attorney’s fees and costs.
The Illinois Attorney General also has authority to investigate patterns of unlawful non-compete practices and pursue enforcement actions when appropriate. These provisions create significant risks for employers that attempt to enforce restrictions that do not comply with Illinois law.
What About the Federal Non-Compete Ban?
You may have heard that the federal government banned non-compete agreements nationwide. In 2024, the Federal Trade Commission issued a rule that would have prohibited most non-compete agreements. However, federal courts blocked the rule before it took effect, and it never became enforceable.
As a result, there is currently no nationwide federal ban on non-compete agreements. Illinois employers and healthcare professionals must continue to look primarily to Illinois law when evaluating whether a restrictive covenant is enforceable.
If you have heard conflicting information regarding federal developments, our guide, The Federal Ban on Non-Competition Clauses: Fact vs. Fiction and Next Steps, provides additional context on what happened and what it means for healthcare professionals.
What Should Healthcare Professionals Do Before Signing a Non-Compete?
The best time to address a non-compete is before you sign the agreement. Many healthcare professionals assume employment contracts are non-negotiable. However, employers are often willing to discuss restrictive covenant provisions, particularly when recruiting physicians and other highly skilled providers.
Before signing, pay close attention to:
- Geographic limitations
- Duration of the restriction
- Specialty-specific restrictions
- Non-solicitation provisions
- Buyout options
- Additional compensation provided in exchange for the restriction
A thorough physician contract review can identify problematic provisions and help you negotiate more favorable terms before they become legally binding.
What Should You Do Before Leaving Your Employer?
If you are preparing to change jobs, start a practice, or join a competing organization, do not make assumptions about your non-compete clause. Instead, carefully evaluate:
- The duration of the restriction
- The geographic area covered
- Whether you practiced within the restricted area
- The patients and facilities involved
- Whether adequate consideration was provided
- Notice requirements contained in the agreement
- Any related non-solicitation provisions
Healthcare professionals considering virtual care models should also evaluate how non-competition clauses and telehealth may affect their future plans. Traditional geographic restrictions do not always fit neatly within modern telehealth practice arrangements, making legal review especially important.
See our related video, “Employment Contract Reviews in Healthcare: The Nuts and Bolts.”
How Jackson LLP Helps Healthcare Professionals
Non-compete disputes often arise at critical points in a healthcare professional’s career. Whether you are evaluating a new opportunity, planning a departure, or responding to an enforcement threat, obtaining legal guidance before taking action can help you avoid costly mistakes.
Our Illinois healthcare lawyers regularly advise physicians, therapists, nurse practitioners, and other healthcare professionals on employment agreements, restrictive covenants, and practice transitions.
When reviewing a non-compete agreement, we provide a written analysis of key provisions, identify potential risks, evaluate enforceability concerns, and discuss practical options moving forward.
We also advise healthcare employers on employment law for healthcare practices, including drafting and enforcing employment agreements compliant with Illinois law.
Schedule a Consultation
Whether you are signing a new employment agreement or preparing to leave your current position, understanding your non-compete before you act can make a significant difference.
Jackson LLP helps healthcare professionals evaluate restrictive covenants, negotiate employment agreements, and develop practical transition strategies. Schedule a consultation to have your agreement reviewed and better understand your options before making your next career move.
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Frequently Asked Questions About Non-Compete Agreements
Are non-compete agreements still enforceable in Illinois?
Yes. Illinois has not banned non-compete agreements. However, they must comply with statutory requirements and satisfy legal standards regarding reasonableness, consideration, and legitimate business interests.
Can an Illinois physician be prevented from working for another practice?
Yes. Whether a physician can be restricted from joining another practice depends on the specific language of the agreement and whether the restriction is enforceable under Illinois law.
What makes a healthcare non-compete unreasonable?
Courts often examine whether the restriction is overly broad in duration, geographic scope, or prohibited activities. Restrictions that go further than necessary to protect legitimate business interests may be unenforceable.
What happens if my employer did not give me 14 days to review my contract?
It may be unenforceable. Illinois law generally requires employers to provide at least 14 days to review a non-compete agreement and advise employees to consult an attorney. Failure to comply with these requirements may affect enforceability.
Does the federal government ban non-compete agreements?
No. Federal courts blocked a proposed FTC rule that would have prohibited many non-compete agreements, and the rule never took effect.
Should I have a healthcare employment contract reviewed before signing?
Yes. Employment agreements often contain restrictive covenants, compensation provisions, termination clauses, and other terms that can significantly affect your career. A legal review can help identify risks and negotiation opportunities before you sign.
