Both Illinois non-compete bills died. Here is what actually governs.

What was proposed

Two bills in the 104th General Assembly would have rewritten the Illinois Freedom to Work Act, from opposite directions.

HB 3213, sponsored by Rep. Anna Moeller, would have prohibited non-competes and non-solicits entirely. No employer could enter one with any employee, regardless of pay, and any such covenant entered on or after January 1, 2026 would have been illegal and void, including agreements signed outside Illinois.

HB 1642, sponsored by Rep. Anne Stava, took the narrower route. It would have kept the covenants lawful but lifted the earnings floor to $300,000 a year, roughly four times the current threshold.

What happened to them

Neither advanced. Both were re-referred to the House Rules Committee under Rule 19(a), HB 1642 on March 27, 2026 and HB 3213 on April 17, 2026. In Illinois practice that is where bills go when they are not moving, and it is generally the end of the road for that session.

The legislature looked at a total ban and at a much higher salary threshold, three weeks apart, and moved neither.

So what governs right now

The Freedom to Work Act, unchanged. The thresholds remain:

• $75,000 in annualized earnings before a non-competition covenant is permitted
• $45,000 before a non-solicitation covenant is permitted

The Act's other requirements are also unchanged, including the obligation to advise the employee in writing to consult an attorney and to give them fourteen calendar days to review the agreement, and the fee-shifting provision that lets an employee who prevails against an improper covenant recover costs and fees from the employer.

And the statute is only part of it. Illinois common law still requires that a covenant be ancillary to a valid relationship, supported by adequate consideration, and no broader than necessary to protect a legitimate business interest, judged on the totality of the circumstances. A covenant can clear every statutory threshold and still be unenforceable because it reaches too far.

The federal picture

The FTC's nationwide ban on non-competes is finished. A district court blocked it in August 2024, the Commission appealed, and on September 5, 2025 it voted three to one to abandon that appeal. The rule is not in effect and will not be revived in that form.

That is not the same as the federal government losing interest. The Commission has said it will continue pursuing non-competes case by case under Section 5 of the FTC Act, and it has done so, bringing an enforcement action against a pet cremation business over its use of them and proposing a consent order restricting them.

The shift matters more than it sounds. A rule is something you can read and comply with. Case-by-case enforcement means the question is whether your particular covenants, in your particular labor market, draw attention.

Why this matters

Two opposite misconceptions are circulating right now, and both are expensive.

Employees are being told that non-competes are unenforceable now, either because Illinois banned them or because the FTC did. Neither happened. An Illinois employee earning above the threshold, under a properly executed covenant that protects a legitimate business interest, is subject to it.

Employers are drawing the opposite and equally wrong conclusion, that the federal threat has passed and the pressure is off. The blanket rule is gone. Enforcement is not, and the state-law requirements that most often sink a covenant, adequate consideration and reasonable scope, were never affected by any of this.

If you have not looked at your agreements since 2021, the review worth doing has nothing to do with either bill. It is whether your covenants comply with the thresholds and the notice and review requirements already in force, and whether their scope is defensible. Those are the grounds these cases are actually decided on.

One caution

A bill sitting in Rules can be revived, and a new General Assembly can take the question up again. This reflects the record as of the date on this note.