Cathy Kelaghan –
January 8, 2022

With every new year comes new or amended employment laws. This article will highlight just three of the new laws effective in 2022 starting with non-compete laws in a few states.

Illinois Non-Compete Agreements

Effective January 1, 2022, the Illinois Freedom to Work Act is amended and will make non-compete agreements with employees who earn less than $75,000 annually unenforceable. Employers in Illinois are also now prohibited from entering into non-solicitation agreements with employees who earn less than $45,000 annually. Finally, the amended law contains pre-employment notice requirements.

The amended law applies prospectively to agreements entered into on or after January 1, 2022. In determining earnings, not only is salary included but also earned bonuses and commissions, among other amounts. The income threshold for non-competes will increase by $5000 every five years through 2037 when it will be $90,000. The threshold for non-solicitation agreements will also increase every five years by $2500 until 2037.

In order for the restrictive covenant to be enforceable, the employee must have been employed at least two years after signing the agreement. The law does allow for “additional professional or financial benefits” in place of the two years but does not define what qualifies as such benefits.

Finally, the employer must provide a copy of the non-compete and/or non-solicitation agreement to an employee at least 14 days prior to the start of employment and must advise the employee in writing to consult with an attorney prior to signing the agreement.

Oregon Non-Compete Agreements

Also, effective January 1, 2022, Oregon’s noncompete statute was amended and will apply to all Oregon noncompete agreements entered into on or after that date. Prior to the amendment, the term of a noncompete agreement could not exceed 18 months. Now, the maximum term for a noncompete is 12 months.

Previously, a noncompete agreement was enforceable in Oregon unless the total amount of the employee’s annual gross salary and commissions exceeds “the median family income for a four-person family, as determined by the United States Census Bureau for the most recent year available at the time of the employee’s termination.”  Now, the law specifies that the annual gross salary and commissions must exceed $100,533, “adjusted annually for inflation pursuant to the Consumer Price Index for All Urban Consumers, West Region (All Items), as published by the Bureau of Labor Statistics of the United States Department of Labor immediately preceding the calendar year of the employee’s termination.”

The amended law makes clear that any noncompliant agreements are void and unenforceable. Many provisions of the Oregon statute remain in place, including a requirement that an employer inform the employee in a written employment offer at least two weeks prior to the commencement of employment that a noncompete agreement is required as a condition of employment. Confidentiality and non-solicitation agreements are not affected by the amended statute.

Pre-Employment Marijuana Testing in Philadelphia

With the increase in recreational use of marijuana laws passing in states and localities throughout the country, we continue to see pre-employment drug testing addressed by these same legislatures.

Effective January 1, 2022, most Philadelphia employers will be prohibited from requiring applicants to undergo testing for the presence of marijuana as a condition of employment.

The exceptions to the new ordinance are:

  • Police officers or other law enforcement positions;
  • Any position requiring a commercial driver’s license;
  • Any position requiring the supervision or care of children, medical patients, disabled or other vulnerable individuals; and
  • Any position in which the employee could significantly impact the health or safety of other employees or members of the public, as determined by the enforcement agency and set forth in regulations.

Additionally, the ban does not apply to any drug testing as required for:

  • Any federal or state statute, regulation, or order that requires drug testing of prospective employees for purposes of safety or security;
  • Any contract between the federal government and an employer or any grant of financial assistance from the federal government to an employer that requires drug testing of prospective employees as a condition of receiving the contract or grant; or
  • Any applicant whose prospective employer is a party to a valid collective bargaining agreement that specifically addresses the pre-employment drug testing of such applicant.

Given the rapid growth of marijuana legalization across the country, employers should review workplace drug testing policies to ensure compliance with new laws and determine what drug screens make the most sense for their workforce. Please do not hesitate to contact Stall Legal with questions about these new statutes or other new laws effective in 2022.