Wyoming has joined a growing number of states banning employers’ noncompete agreements, with a law that will go into effect July 1.
With a few notable exceptions, the new state law will void “any covenant not to compete that restricts the right of any person to receive compensation for performance of skilled or unskilled labor.”
“This development is a major shift for Wyoming, where courts have historically permitted non-compete agreements to the extent reasonable in duration and geographic scope,” according to labor attorneys at Fisher Phillips. The lawyers cautioned business owners in the state to “treat this shift as a compliance priority.”
Exceptions to the law include cases in which noncompete clauses are for officers or executive and management personnel; where they are designed to protect trade secrets as defined by state law; where they involve the recovery of all or part of the cost of relocating, educating and training employees; and where they are part of contracts involving the sale or purchase of a business or its assets.
The law also eliminates restrictions that would prevent physicians from freely practicing medicine if their employment ends.
Law firm Jackson Lewis noted that the new law applies only to noncompete agreements executed on or after July 1. Agreements signed before July 1 “will remain unaffected and enforceable according to their original terms,” the attorneys said.
A final federal rule issued a year ago by the Federal Trade Commission prohibited employers across the country from using noncompete agreements in most instances. The rule was struck down by a federal judge in August, however, in a move that was celebrated by the senior living and care industries, among other business and employer groups.
The FTC under President Biden initially appealed the decision. The Trump administration withdrew that appeal last month, however.
Source: McKnights Seniorliving
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