On March 19, 2025, the Illinois House of Representatives introduced House Bill 3213, a significant legislative measure aimed at reforming the enforceability of non-compete and non-solicitation agreements in the state. This bill seeks to address growing concerns regarding the impact of such covenants on employee mobility and economic competition.

The primary provision of House Bill 3213 stipulates that any non-compete or non-solicitation agreement entered into on or after January 1, 2026, will be deemed illegal and void unless specific conditions are met. These conditions include the requirement for adequate consideration for the employee, the necessity of the covenant to protect a legitimate business interest, and the assurance that the covenant does not impose undue hardship on the employee or harm the public interest.

Notably, the bill also repeals several sections of the Illinois Freedom to Work Act, specifically Sections 7, 20, and 35, which previously governed the enforceability of such agreements. This repeal indicates a shift in legislative intent towards enhancing worker rights and promoting fair competition in the job market.

Debate surrounding House Bill 3213 has been robust, with proponents arguing that the bill will empower employees and foster a more dynamic labor market. Critics, however, express concerns that the bill may undermine businesses' ability to protect their proprietary interests and trade secrets, potentially leading to increased competition and instability in certain industries.

The implications of this bill are significant, as it could reshape the landscape of employment contracts in Illinois. Experts suggest that if passed, the legislation may encourage a more mobile workforce, allowing employees to pursue new opportunities without the fear of legal repercussions from former employers. Conversely, businesses may need to reassess their hiring and retention strategies in light of these changes.

House Bill 3213 is set to take effect on January 1, 2026, pending further legislative approval. As discussions continue, stakeholders from various sectors are closely monitoring the bill's progress, anticipating its potential impact on both employees and employers across Illinois.