Four states—Minnesota, Oklahoma, North Dakota, and California—have banned most non-compete agreements. Wyoming joined that group when its governor signed Enrolled Act No. 87 on March 19, 2025. While the act purports to ban most non-competes, the actual impact of the law is uncertain due to several exceptions.
What Is the State of Non-Compete Law in the U.S.?
A traditional non-compete clause seeks to prohibit an employee from working for a competitor for a defined time period either in a similar role, or in a role in which the former employee is likely to use the former employer’s confidential information. In the last decade, state lawmakers have passed a variety of non-compete laws across the country.
Some states have sought to prohibit the use of non-competes solely for low-wage workers, other states only allow the use of non-competes for higher wage workers with reasonable restrictions, and same states have outright banned non-competes (for example, Minnesota) or have attempted to do so (for example, several states on the East Coast).
On the national level, the Federal Trade Commission enacted a rule to ban non-competes last year. But after litigation, a federal district court held that the FTC did not have the authority to enact this rule and prohibited the rule from going into effect. That decision was appealed, but the new presidential administration has sought a 120-day stay on the appeals.
Currently, there is no national law regarding non-competes, and each state has its own statutory law or common law developed by the courts.
What Was the State of Non-Compete Law in Wyoming?
Prior to this act, Wyoming did not have an existing non-compete statute. Rather, Wyoming had developed common law. The Supreme Court of Wyoming explained that a non-compete is enforceable in Wyoming only if various conditions are met: if the clause is in writing, if the clause is part of an employment agreement, if the employer provided reasonable consideration, if the restriction is reasonable in scope (both in terms of geography and time), and if the restriction does not harm public policy. See Brown v. Best Home Health & Hospice, LLC, 2021 WY 83, ¶ 10.
Recently, the Supreme Court of Wyoming prohibited courts from re-writing or “blue penciling” an overly broad non-compete clause to make it enforceable. See Hassler v. Circle C Resources, 2022 WY 28, ¶¶ 16–30.And in another decision by the same court, it was held that a district court should have allowed nurses to introduce evidence regarding the impact on the public of a healthcare industry non-compete. See Brown, 2021 WY 83, 32–35.
What Is the New Law in Wyoming?
Wyoming’s new act is effective as of July 1, 2025 and does not apply retroactively. It only applies to contracts that are entered into on or after that date. The law voids “any covenant not to compete that restricts the right of any person to receive compensation for performance of skilled or unskilled labor.”
The new law also includes provisions applying to the medical profession. It explicitly voids non-competes that restrict the practice of medicine in contracts “between physicians.” The new law clearly permits physicians to provide their contact information to patients whom they were treating with “rare disorders” while they were working with their prior employer.
There are, however, key exceptions. The new law does not apply to a non-compete or contract with the following characteristics:
- It is part of a contract for the sale of a business or its assets
- It protects “trade secrets” as defined under Wyoming statute
- It allows for the recovery of all or part of the cost to relocate and train employees
- It concerns “executive and management personnel and officers and employees who are professional staff to executive and management personnel.”
The new law allows an employer to recover the entire “expense of relocating, educating and training an employee” for employees who worked for the employer for less than two years, 66% of such expenses if the employee worked for the employer between 2 and 3 years, 33% of the expense if the employee worked for the employer between 3 and 4 years, but none of such expenses if the employee worked for the employer for more than 4 years.
Many Uncertainties Remain
Due to the above exceptions, the precise scope of the new law remains uncertain and litigation will likely be used to tease out the ramifications of the new law. For example, the law contains a “trade secrets” carve-out, which could potentially moot the new law’s protections, as most employers will argue they seek to enforce a non-compete because the former employee had access to their trade secrets.
Further, the new law does not specifically define “executive or management personnel.” It is also unclear if the law applies to employment agreements between physicians and hospitals, as opposed to simply “between physicians.”
The intersection of the law and non-solicitation clauses is also uncertain. A traditional non-solicit seeks to prohibit a former employee from soliciting the former employer’s clients or employees. But sometimes, a non-solicit can function as a non-compete if it is broadly drafted. The law does allow physicians to provide their contact information (which arguably constitutes solicitation) to patients with “rare disorders.”
Finally, the law does not include any remedy provisions or language allowing the winning or prevailing side to recover attorneys’ fees.
Wyoming’s new law continues the national trend of states (and the federal government) attempting to scale back existing non-compete laws. Notably, it appears to materially impact non-competes in the medical profession.
We will continue monitoring these new laws (and proposed new laws) as there are several new developments across the U.S.
Research assistance for this article was provided by Hannah Carapellotti.