May 14, 2025
Wyoming recently passed a law restricting businesses’ ability to make or enforce non-compete agreements with their employees. This law is 2025-SF0107 and will take effect on July 1, 2025. It would void any non-compete contracts restricting an individual’s ability to receive compensation for their skilled or unskilled labor.
There are four exceptions to regulations enforced by 2025-SF0107. They are as follows:
“(i) Any covenant not to compete contained in a contract for the purchase and sale of a business or the assets of a business;
(ii) Any covenant not to compete to the extent the covenant provides for the protection of trade secrets as defined by W.S. 6-3-501(a)(xi);
(iii) Any contractual provision providing for the recovery of all or a portion of the expense of relocating, educating, and training an employee as follows:
(A) Recovery of not more than one hundred percent (100%) of the expense for an employee who has served an employer for a period of less than two (2) years;
(B) Recovery of not more than sixty-six percent (66%) of the expense for an employee who has served an employer for between two (2) and less than three (3) years;
(C) Recovery of not more than thirty-three percent (33%) of the expense for an employee who has served an employer for between three (3) and less than four (4) years.
(iv) Executive and management personnel and officers and employees who constitute professional staff to executive and management personnel.”
2025-SF0107 also voids any covenants restricting a physician’s right to practice medicine freely. However, any other provisions in the contract that are legally enforceable will remain enforceable. The new restrictions will only apply to agreements entered into as of July 1, 2025.
However, it remains uncertain how 2025-SF0107 will apply. Many have voiced concerns and the need for clarity regarding parts of the law. Examples of recurring questions include what a “covenant not to compete” means and when a supervised employee meets the managerial exception.
Traditional non-compete restrictions will apply. However, Wyoming also has nontraditional non-compete limitations, such as bans against working for other companies while employed, customer non-solicitation agreements, etc. It remains unclear whether this law will cover the nontraditional restrictions.
Lawmakers have noted that the new Wyoming law bears similarities to one passed in Colorado. However, it does not have the strict notification requirements established by the Colorado law. It also does not provide statutory penalties for unenforceable non-compete restrictions.
2025-SF0107 will not affect any agreements from before July 1, 2025. Employers entering non-compete contracts as of this date should work with counsel to ensure compliance with 2025-SF0107. They should also consider counsel when renewing non-compete agreements from before the law’s effective date to determine the necessity of creating a new contract.
Disclaimer:
Information provided here is for educational and informational purposes only and should not constitute as legal advice. We recommend you contact your own legal counsel for any questions regarding your specific practices and compliance with applicable laws.