Open Markets Institute Applauds Illinois HB 3213 to Ban Non-Compete Clauses
The Open Markets Institute expressed strong support for Illinois House Bill 3213, legislation that would ban non-compete clauses for all workers in the state, calling it a critical step toward protecting worker freedom, boosting wages, and promoting fair competition.
In testimony submitted to the Illinois House Labor & Commerce Committee, Sandeep Vaheesan, Legal Director at the Open Markets Institute, emphasized the far-reaching harms caused by non-compete agreements and the urgent need for a comprehensive ban.
“Non-compete clauses trap workers, suppress wages, and stifle entrepreneurship,” said Vaheesan. “HB 3213 would ensure that workers in Illinois are free to change jobs, pursue better opportunities, or start their own businesses—without fear of legal retaliation.”
Non-compete agreements, which restrict workers from joining competing firms or launching their own ventures, affect tens of millions of workers nationwide. Research shows non-competes reduce labor mobility, depress wages and wage growth, and limit the creation of new businesses. The Federal Trade Commission has estimated that non-competes cost American workers between $250-$295 billion annually.
HB 3213 strengthens the Illinois Freedom to Work Act by going beyond limiting enforcement and instead making non-compete clauses illegal altogether.
“Simply making non-competes unenforceable is not enough,” he said. “These contracts still deter workers from leaving jobs due to fear of costly legal disputes. A full ban—backed by meaningful enforcement—is necessary to stop their widespread abuse.”
Beyond harming workers, non-compete clauses can entrench monopoly power by preventing new and smaller firms from hiring workers with specialized skills who are needed to compete. This diminished competition among firms in product and service markets can also lead to higher prices and fewer choices for consumers, particularly in sectors like healthcare.
Conversely, evidence from states shows that banning non-competes can increase wages significantly and lead to greater business formation, innovation, and job mobility.
“Non-competes are a blunt and ineffective tool,” Vaheesan added. “Employers already have better, more targeted ways to protect legitimate business interests, such as trade secret law and, for highly paid workers, fixed-term contracts. When non-competes are banned, employers compete for workers the right way—by offering better pay, better conditions, and real opportunities for advancement.”
“This bill will help build a more open, fair, and dynamic economy in Illinois,” said Vaheesan. “Lawmakers should seize this opportunity to put workers and entrepreneurs first.”
The legislation comes amid uncertainty at the federal level. Although the Federal Trade Commission finalized a nationwide ban on non-competes in 2024, its future remains unclear due to the Trump FTC’s decision to abandon defenses of the rule in two pending court cases. Illinois lawmakers now have an opportunity to stand up for workers, consumers, and entrepreneurs in their state.
Also see:
March 2019: Open Markets led a labor and public interest coalition, which included the AFL-CIO, Public Citizen, SEIU, and UFCW, that petitioned for an FTC rule banning non-compete clauses for all workers.
January 2023: Open Markets hailed the FTC’s proposed non-compete ban and identified in its public comment and writing how the FTC could strengthen the final rule.
In 2024, Open Markets Institute filed an amicus brief in Villages v. FTC, arguing that non-compete agreements are an unfair method of competition and that banning them aligns with the FTC Act and the agency’s historical policymaking, in response to a lower court ruling that the FTC exceeded its authority—a decision now under appeal.
Following suit in 2025, Open Markets Institute filed an amicus brief in Ryan v. FTC, marking the second appellate case in which Open Markets has defended the Federal Trade Commission’s (FTC) landmark prohibition on non-compete clauses.
In March 2025, Chief Economist Brian Callaci testified in support of preserving Minnesota’s blanket ban on non-compete clauses. His testimony highlights the negative impact of non-competes and similar contractual provisions on workers and the labor market.
In October 2025, Vaheesan and former FTC Commissioner Alvaro Bedoya criticized the FTC’s decision to stop defending the non-compete ban in court.
###
The Open Markets Institute is a transatlantic team of journalists, researchers, lawyers, economists, and advocates working together to expose and reverse the stranglehold that corporate monopolies have on society. Learn more at www.openmarketsinstitute.org.