Will Illinois enforce our clause requiring suit in another state?
In three settings Illinois voids it by statute regardless of reasonableness. A provision in or executed in connection with a building and construction contract to be performed in Illinois that requires any litigation, arbitration or dispute resolution to take place in another state is against public policy and void and unenforceable (815 ILCS 665/10). Any provision in a franchise agreement designating jurisdiction or venue in a forum outside Illinois is void, although a franchise agreement may provide for ARBITRATION in a forum outside Illinois (815 ILCS 705/4): 'franchise' being the Act's defined term: a marketing plan or system prescribed in substantial part by the franchisor, substantial association with the franchisor's mark, and a franchise fee of $500 or more, with listed exemptions (815 ILCS 705/3(1)). And as amended by P.A. 104-320 the Workplace Transparency Act makes a unilateral condition of employment that requires a venue outside Illinois to adjudicate an Illinois employee's unlawful-employment-practice claim void to the extent it denies a substantive or procedural right or remedy (820 ILCS 96/1-25(b)). The construction section's reach is fixed by its own definition: a "building and construction contract" is "a contract for the design, construction, alteration, improvement, repair, or maintenance of real property, highways, roads, or bridges": design contracts included (815 ILCS 665/5). The Franchise Disclosure Act's definition carries its own exemptions: a franchised business operated on the franchisor's premises as an incident of the franchisor's business, a "fractional franchise" (a franchisee two years in the trade whose franchise sales were expected to stay at or under 20 percent of its volume), a certification-mark licence, and a Petroleum Marketing Practices Act relationship (815 ILCS 705/3(1)(i)-(iv)); and under § 705/26 any person who "offers, sells, terminates, or fails to renew a franchise in violation of this Act shall be liable to the franchisee who may sue for damages caused thereby", with rescission available only "[i]n the case of a violation of Section 5, 6, 10, 11, or 15 of the Act", and a franchisee in whose favour judgment is entered recovers the costs of the action including reasonable attorney's fees (815 ILCS 705/26). The Workplace Transparency Act's § 1-25 is held in two versions; the text quoted above is the one in force from January 1, 2026 (P.A. 104-320), which added the limitations-shortening, non-Illinois-law and out-of-state-venue words to subsection (b) and the sixth acknowledgment to subsection (c).
The trap
The franchise section draws a line most drafters miss: out-of-state VENUE is void but out-of-state ARBITRATION is expressly preserved, so the same deal can be pulled out of Illinois courts by an arbitration clause while its forum clause fails. The construction section is broader than a forum clause: it voids out-of-state arbitration and any other dispute resolution too, and it reaches a provision merely 'executed in connection with' the construction contract; whether that phrase catches a venue term in a related bond, guaranty or purchase order is a reading of the words, not a holding verified here. Outside these three statutes no Illinois rule is stated here. One thing about the Workplace Transparency Act is missing from every rule that cites it, and it is the drafting answer rather than a footnote: § 1-25 voids the clause as a UNILATERAL condition of employment, not outright. § 1-25(c) provides that “Any agreement, clause, covenant, or waiver that is a mutual condition of employment or continued employment may include provisions that would otherwise be against public policy as a unilateral condition of employment or continued employment, but only if the agreement, clause, covenant, or waiver is in writing, demonstrates actual, knowing, and bargained-for consideration from both parties, and acknowledges the right of the employee or prospective employee to:” and then lists six rights the writing must acknowledge, reporting a good-faith allegation of unlawful employment practices to a government agency, reporting criminal conduct, participating in a proceeding about unlawful employment practices, making truthful statements or disclosures required by law, requesting or receiving confidential legal advice, and engaging in concerted activity about work-related issues. § 1-25(d) then supplies the sanction: “Failure to comply with the provisions of subsection (c) shall establish a rebuttable presumption that the agreement, clause, covenant, or waiver is a unilateral condition of employment or continued employment that is governed by subsection (a) or (b).” And § 1-25(e) adds that nothing in the section prevents an employee or prospective employee and an employer from negotiating and bargaining over the terms, privileges and conditions of employment. So in Illinois the move is not to delete the clause but to make it mutual, written, supported by actual bargained-for consideration on both sides and carrying the six acknowledgments; miss any of that and subsection (d) puts it back under (a) or (b).
13 authorities
- statute815 ILCS 665/10enactment date not established
The words that state the rule
A provision contained in or executed in connection with a building and construction contract to be performed in Illinois that makes the contract subject to the laws of another state or that requires any litigation, arbitration, or dispute resolution to take place in another state is against public policy. Such a provision is void and unenforceable.
- statute815 ILCS 705/4enactment date not established
The words that state the rule
Any provision in a franchise agreement that designates jurisdiction or venue in a forum outside of this State is void, provided that a franchise agreement may provide for arbitration in a forum outside of this State.
- statute820 ILCS 96/1-25enactment date not established
The words that state the rule
Any agreement, clause, covenant, or waiver that is a unilateral condition of employment or continued employment and requires the employee or prospective employee to waive, arbitrate, or otherwise diminish any existing or future claim, right, or benefit related to an unlawful employment practice to which the employee or prospective employee would otherwise be entitled under any provision of State or federal law, including that which purports to shorten the applicable statute of limitation, apply non-Illinois law to an Illinois employee's claim, or require a venue outside of Illinois to adjudicate an Illinois employee's claim, is against public policy, void to the extent it denies an employee or prospective employee a substantive or procedural right or remedy related to alleged unlawful employment practices
- statute815 ILCS 705/3enactment date not established
The words that state the rule
(1) "Franchise" means a contract or agreement, either expressed or implied, whether oral or written, between two or more persons by which: (a) a franchisee is granted the right to engage in the business of offering, selling, or distributing goods or services, under a marketing plan or system prescribed or suggested in substantial part by a franchisor; and (b) the operation of the franchisee's business pursuant to such plan or system is substantially associated with the franchisor's trademark, service mark, trade name, logotype, advertising, or other commercial symbol designating the franchisor or its affiliate; and (c) the person granted the right to engage in such business is required to pay to the franchisor or an affiliate of the franchisor, directly or indirectly, a franchise fee of $500 or more;
- statute820 ILCS 96/1-25enactment date not established
The words that state the rule
Any agreement, clause, covenant, or waiver that is a mutual condition of employment or continued employment may include provisions that would otherwise be against public policy as a unilateral condition of employment or continued employment, but only if the agreement, clause, covenant, or waiver is in writing, demonstrates actual, knowing, and bargained-for consideration from both parties, and acknowledges the right of the employee or prospective employee to:
- statute820 ILCS 96/1-25enactment date not established
The words that state the rule
Failure to comply with the provisions of subsection (c) shall establish a rebuttable presumption that the agreement, clause, covenant, or waiver is a unilateral condition of employment or continued employment that is governed by subsection (a) or (b).
- statute815 ILCS 665/5enactment date not established
The words that state the rule
"Building and construction contract" means a contract for the design, construction, alteration, improvement, repair, or maintenance of real property, highways, roads, or bridges.
- statute815 ILCS 705/3enactment date not established
The words that state the rule
Provided that this Act shall not apply to any of the following persons, entities or relationships which may involve or acquire a franchise or any interest in a franchise: (i) any franchised business which is operated by the franchisee on the premises of the franchisor or subfranchisor as long as such franchised business is incidental to the business conducted by the franchisor or subfranchisor at such premises, including, without limitation, leased departments and concessions; or (ii) a fractional franchise. A "fractional franchise" means any relationship in which the person described therein as a franchisee, or any of the current directors or executive officers thereof, has been in the type of business represented by the franchise relationship for more than 2 years and the parties anticipated, or should have anticipated, at the time the agreement establishing the franchise relationship was reached, that the sales arising from the relationship would represent no more than 20% of the sales in dollar volume of the franchisee for a period of at least one year after the franchisee begins selling the goods or services involved in the franchise; or (iii) a franchise agreement for the use of a trademark, service mark, trade name, logotype, advertising, or other commercial symbol designating a person who offers on a general basis, for a fee or otherwise, a bona fide service for the evaluation, testing, or certification of goods, commodities, or services; or (iv) a franchise relationship covered by the Petroleum Marketing Practices Act, 15 U.S.C. 2801.
- statute815 ILCS 705/26enactment date not established
The words that state the rule
Every franchisee in whose favor judgment is entered in an action brought under this Section shall be entitled to the costs of the action including, without limitation, reasonable attorney's fees.
- statute820 ILCS 96/1-25enactment date not established
The words that state the rule
(Text of Section after amendment by P.A. 104-320) Sec. 1-25. Conditions of employment or continued employment. (a) Any agreement, clause, covenant, or waiver that is a unilateral condition of employment or continued employment and has the purpose or effect of preventing an employee or prospective employee from making truthful statements or disclosures about alleged unlawful employment practices or engaging in protected concerted activity to address work-related issues is against public policy, void to the extent it prevents such statements or disclosures, and severable from an otherwise valid and enforceable contract under this Act.
- statute820 ILCS 96/1-25enactment date not established
The words that state the rule
(1) report any good faith allegation of unlawful employment practices to any appropriate federal, State, or local government agency enforcing discrimination laws; (2) report any good faith allegation of criminal conduct to any appropriate federal, State, or local official; (3) participate in a proceeding related to unlawful employment practices, including any litigation brought by any federal, State, or local government agency or any other person who alleges that the employer has violated any State, federal, or local law, regulation, or rule; (4) make any truthful statements or disclosures required by law, regulation, or legal process; (5) request or receive confidential legal advice; and (6) engage in concerted activity to address work-related issues.
- statute820 ILCS 96/1-25enactment date not established
The words that state the rule
(1) report any good faith allegation of unlawful employment practices to any appropriate federal, State, or local government agency enforcing discrimination laws; (2) report any good faith allegation of criminal conduct to any appropriate federal, State, or local official; (3) participate in a proceeding with any appropriate federal, State, or local government agency enforcing discrimination laws; (4) make any truthful statements or disclosures required by law, regulation, or legal process; and (5) request or receive confidential legal advice.
- statute815 ILCS 705/26enactment date not established
The words that state the rule
Any person who offers, sells, terminates, or fails to renew a franchise in violation of this Act shall be liable to the franchisee who may sue for damages caused thereby. This amendatory Act of 1992 is intended to clarify the existence of a private right of action under existing law with respect to the termination or nonrenewal of a franchise in violation of this Act. In the case of a violation of Section 5, 6, 10, 11, or 15 of the Act, the franchisee may also sue for rescission.
“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.