The latest development in the ongoing saga of noncompete agreements has taken another significant step forward, as Wyoming has recently enacted legislation banning noncompete agreements, effective July 1, 2025. As one of the latest states to take such a step, Wyoming joins a growing list of jurisdictions, such as California, New York, and Oregon, that have previously taken steps to regulate or ban noncompete agreements. For employers, this new law presents a significant shift in the landscape of restrictive covenants.

Key Provisions of the New Law

The law in question is quite far-reaching, with a broad scope that applies to any agreement containing a noncompete clause, including employment agreements, independent contractor agreements, and other types of agreements. However, there are notable exceptions to this rule, which effectively narrow the scope of noncompetes impacted by the law.

• Trade Secret Exception
• Executive and Management Personnel Exception
• Physicians
• Expense Repayment Provisions
• Contract for the Purchase and Sale of a Business or Its Assets

Trade Secret Exception

The Wyoming noncompete ban does not include covenants not to compete “to the extent the covenant provides for the protection of trade secrets as defined by Wyoming Statutes 6-3-501(a)(xi).” Under this definition, a trade secret is broadly defined as any scientific, technical, or commercial information, including any design, process, procedure, list of suppliers, list of customers, business code, or improvement thereof. The law provides employers with a fair amount of leeway to structure their restrictive covenants so that they fall under this exception. This means that employers can continue to use noncompete clauses to protect sensitive information, such as proprietary technology or trade secrets.

Executive and Management Personnel Exception

The law also excludes noncompete agreements entered into with executive and management personnel and officers and employees who constitute professional staff to executive and management personnel. This exception is not clearly defined, leaving employers with relatively wide latitude in determining which employees may fit within this exception.

Physicians

The law voids covenants not to compete in employment, partnership, or corporate agreements between physicians that restrict the rights of a physician to practice medicine. However, all other provisions of a physician’s agreement that are enforceable at law remain enforceable. Physicians are also permitted to disclose their continuing practice of medicine and new professional contact information to patients with a rare disorder, as defined by the national organization for rare disorders. This exception allows physicians to continue practicing medicine while also complying with the law.

Expense Repayment Provisions

Contractual provisions for recovering the expense of relocating, educating, and training an employee are exempt from the new law. These provisions are based on the following statutory repayment provisions:

This exception allows employers to recover a portion of the expenses associated with terminating an employee, while also complying with the law.

Contract for the Purchase and Sale of a Business or Its Assets

Finally, the law excludes covenants not to compete that are contained in a contract for the purchase and sale of a business or the assets of a business. This exception is likely to affect businesses that engage in mergers and acquisitions.

Key Takeaways

Employers wishing to enter into noncompete agreements on or after July 1, 2025 may only do so if the noncompete falls within one or more of the law’s specific carveouts. The law does not provide for any statutory damages or penalties, which could potentially diminish its impact. As Wyoming joins the growing list of jurisdictions considering and adopting legislation governing noncompetes, we will continue to report on key legislative updates and trends in the field. With this new law, employers and employees alike must navigate the complex landscape of restrictive covenants and ensure compliance with the law’s provisions. The new law is a significant development in the ongoing saga of noncompete agreements, and its impact will be felt across various industries. As the regulatory landscape continues to evolve, it is essential for employers and employees to stay informed and adapt to the changing rules and regulations.

Conclusion

In conclusion, the Wyoming noncompete ban is a significant step forward in regulating noncompete agreements. With its broad scope and notable exceptions, the law provides a more balanced approach to restrictive covenants. As employers and employees navigate the complex landscape of noncompetes, it is crucial to stay informed and ensure compliance with the law’s provisions. With this new law, Wyoming joins the growing list of jurisdictions that are taking steps to regulate noncompete agreements, paving the way for a more equitable and just employment landscape.