We are now three and half months into 2021, and there have been 59 noncompete bills pending in 23 states.1 (This does not include the two pending federal noncompete bills, D.C.’s new law to ban most noncompetes, or any proposed bills that are circulating, but have not yet been filed.)
Four bills have already died — each in a state that had only one pending bill2 — leaving the current tally at 55 bills still pending in 19 states.
The 19 states are Connecticut, Georgia, Illinois, Iowa, Louisiana, Minnesota, Missouri, Nevada, New Hampshire, New Jersey, New York, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, Texas, Vermont, and West Virginia.
In this series, we are providing details on all pending bills (and any new ones that are filed) — and we will be simultaneously updating our Changing Trade Secrets | Noncompete Laws page. Note that the summaries are (sort-of) color coded for the nature of the bill (ban, modification or establishment of standards, reversal of prior changes) and the groups for whom it creates exceptions or specific limitations (medical, low-wage workers, others).
Up today: Louisiana.
Louisiana has the following two pending bills:
- SB.164 (An Act To amend and reenact R.S. 23:921(A)(1), (C), (H), (J), and (K), relative to contracts; to provide relative to a noncompete contract or agreement; to provide terms, conditions, and procedures; to provide for technical changes; and to provide for related matters): Prefiled on April 1, 2021 and introduced on April 12, 2021, the bill would simply make “technical,” i.e., nonsubstantive, changes.
The bill is pending before the Committee on Commerce, Consumer Protection and International Affairs.
- HB.483 (An Act To enact R.S. 37:1303, relative to restricting the practice of medicine by physicians (etc.)): Prefiled on April 2, 2021 and introduced on April 12, 2021, the bill would ban certain physician noncompetes and put new limitations on others. Specifically, the bill would:
- ban noncompetes for “any primary care physician” (broadly defined) or “physician employed by the state”;
- prohibit noncompetes for any “physician specialist . . . who has been employed by, or under contract with, the employing or contracting entity for three years”;
- require (for any physician specialist noncompete) “a buyout provision equal to no more than one year’s salary which diminishes pro rata [to zero] annually over three years;”
- render a noncompete for a physician “who is terminated without cause” unenforceable;
- limit physician noncompetes to two years; and
- limit the geographic reach to “the parish of the physician’s primary office location and up to two contiguous parishes.”
The bill is pending before the House Health and Welfare Committee.
Next up: Minnesota.
And, remember, if you want to see a summary of the current noncompete law in any state (and D.C.), please refer to our 50-state noncompete chart, which is updated on a continual basis, as the laws change.
*A huge thank you to Erika Hahn for all of her extraordinary help in tracking and monitoring all of the bills.
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[1] The 23 states are: Connecticut, Georgia, Illinois, Iowa, Kentucky, Louisiana, Minnesota, Mississippi, Missouri, Nevada, New Hampshire, New Jersey, New York, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, Texas, Utah, Vermont, Virginia, and West Virginia.
[2] The four states are: Kentucky, Mississippi, Virginia, and Utah.
So you have the information, the bills that have failed so far this year are as follows:
- The Kentucky bill (S.B. 235) would have banned the use of noncompetes for low-wage workers, required employers to post of the provisions of the statute, and banned retaliation (as though retaliation would otherwise be lawful), among other things.
- The Mississippi bill (HB.331) would have only touched incidentally on restrictive covenants in the context regulating professional employer organizations.
- The Virginia bill (HB.1112), which was carried over from the 2020 legislative session, would have banned all employee noncompetes.
- The Utah bill (SB.46) would have restricted the legitimate business interests that could support a noncompete (to cover only trade secrets, intellectual property, and “properly designated and protected” confidential information and materials) and prohibited any noncompete that “is broader than necessary to protect the legitimate business interests of the employer; or (B) applies to a geographic area that is larger than the geographic area in which the employer has significant presence or influence.”