A few weeks ago there were 25 noncompete bills pending in 13 state legislatures.
As of this week, the number is up to 42 noncompete bills in 18 states.
And, if that’s not enough, Congress is back at it, with three bills — so new, they aren’t even available yet.
Reminder: Last year, there were 98 noncompete bills in 29 states, plus D.C. and seven federal bills. Given that it’s just the beginning of February and most legislative sessions only started in January and last two years, we are well on our way to surpassing last year’s numbers — despite the FTC’s proposed ban to wipe out all employee noncompetes and render all of this moot.
As you know, we keep track of all of the changing noncompete and trade secret laws around the country.
So, first the federal bills…
Senators Young and Murphy (along with the support of two other co-sponsors) have again proposed a ban on all employee noncompetes (i.e., permitting sale of business noncompetes) though the text is not yet available.
Representative Scott Peters (along with the support of two other co-sponsors) have filed a House version of the same re-proposed ban, though the text is also not available.
And, of course, Representative Claudia Tenney has reintroduced her bill “[t]o void existing non-compete agreements for any employee who is fired for not complying with an employer’s COVID-19 vaccine mandate, and for other purposes.” The text of this bill is likewise not yet available.
Next, the state bills…
On the state side, there are now 42 noncompete bills in each the following 18 states (new states since our last post are bolded):
- New Hampshire
- New Jersey
- New York
- Oklahoma (pre-filed)
- Rhode Island
- South Carolina
- West Virginia
Connecticut, with four new bills, wins for variety:
- One bill is an overhaul of noncompete law, and includes a ban for low-wage workers.
- One would ban noncompetes for “homemakers” and “companions” (these really are home health aid types of positions).
- Another would ban all noncompetes and other restrictive covenants, but allow for training repayment agreements and confidentiality agreements, assuming “proper” notice is provided. (This separately wins for worst-written proposed ban.)
- And the last is a proposed ban of noncompetes for physician assistant, nurse practitioners, and advanced practice nurses (though the stated purpose actually seems broader, and intended to “extend” the physician noncompete ban to reach all “other health care providers”).
Missouri takes the lead with seven bills, six of no real consequence and one that would ban noncompetes for low-wage workers (specifically, hourly workers).
Minnesota (although it made the the last list) has a new bill that wins for most confusing. Though a full ban that purports to be prospective, it would actually apply (sort-of) retroactively, in the same way Washington’s 2020 law works.
Hawai‘i wins for most specific: its bill would ban noncompetes for workers in a restaurant, retail store, newspaper, magazine, news agency, press association, wire service, or radio or television transmission station or network. It also wins for (1) most willing to base critical findings concerning the effect of noncompetes on inconclusive research, while failing to look at the contrary research or to consider the unintended consequences; (2) changing proper spellings to improper ones (i.e., changing “noncompete” and “nonsolicit” to “non-compete” and “non-solicit,” respectively); and (3) raising the most constitutional issues by purporting to apply retroactively (by voiding existing agreements).
Pennsylvania’s bill to ban noncompetes in the broadcast industry wins for least newsworthy.
Rhode Island’s bill wins for most twists and turns, by proposing to ban noncompetes and nonsolicits for physician’s assistants, but permit them in the context of the sale of a practice (presumably a medical practice), unless the noncompete exceeds five years.
Finally, I should have noted in the last post that New Jersey should have also won for the state with bills that take a good thing too far. All other excesses aside, two of the bills (S 1410 and A3715) would require at least “30 business days before the commencement of the employee’s employment . . . .” (Emphasis added.) That means that a person who is given a job offer subject to a noncompete cannot start their job for six weeks — yes six weeks — even if they need the job to start sooner.
Remember that the legislative sessions in most states are just starting, so more bills will be popping up — and it will take a while for most to go anywhere. Of course, by that time, as previously noted, the FTC’s proposed rule may take effect and make all of this moot.
Resources to help
In the meantime, we know first hand how hard it is to keep up with the ever-changing requirements around the country. To help, we have created the following resources (available for free):
- 50-State Noncompete Law Chart, the first of its kind and regularly updated (downloadable PDF);
- Chart of Noncompete “Low Wage” Thresholds and Criteria (downloadable PDF);
- Notice requirements summary chart, providing details for each of the 8 states (plus D.C.) that has notice requirements related to noncompetes (downloadable PDF);
- “Changing Trade Secrets | Noncompete Laws” (dedicated blog page) now provides a current detailed summary of the changing landscape of trade secret laws and noncompete laws around the country, state by state and at the federal level; and
- Trade secret and other legitimate business interest protection plan strategy and checklist.
We also have a 50-State and Federal Trade Secret Law Chart, providing a comparison the trade secrets laws nationally to the Uniform Trade Secrets Act (downloadable PDF).
We hope you find all of these resources useful.
And please note that we are grateful for all of the input we’ve received over the years, and welcome any suggestions for improvements that you may be willing to share.
*A huge thank you to Erika Hahn for all of her extraordinary help in monitoring all of the bills filed around then country!