84 noncompete bills in 33 states, 7 passed, 2 about to, and (still) 5 federal bills

Updated August 3, 2023 to reflect the nature of North Carolinas bill.

We are now up to 84 bills in 33 states, plus 5 in Congress.

Since last month’s update, we’ve seen 11 new state bills, 6 new states (Nevada, North Carolina, Ohio, Oregon, Tennessee, and Vermont), and 7 new laws — despite the FTC’s proposed ban to wipe out all employee noncompetes and render all of this moot and the NLRB GC’s memo declaring virtually all noncompetes (for non-supervisor/managers and independent contractors) unlawful.

So far this year, 11 of the bills have already failed, 7 bills (two in Indiana, one in Kentucky, one in Maine, one in Maryland, one in Minnesota, and one in Tennessee) have passed, and two bills (one in Iowa and one in Nevada) are awaiting the Governor’s signature.

Reminder: Last year, there were 98 noncompete bills in 29 states, plus D.C. and seven federal bills. Though we have not (yet) seen quite as many bills this year, more significant is that we have already seen more states considering changes.

State bills…

On the state side, we’re up to 82 noncompete bills in each the following 33 states (new states are bolded; states with dead bills are redstates with bills that have passed are green; states with passed bills and dead bills are blue):

  • Arkansas (2 died; none remaining)
  • California (1 died; 2 remaining)
  • Connecticut
  • Florida (none remaining)
  • Georgia (none remaining)
  • Hawai‘i
  • Indiana (2 passed; 1 remaining)
  • Iowa (1 bill)
  • Kentucky
  • Louisiana
  • Maine (1 passed; 1 remaining)
  • Massachusetts
  • Maryland (see here for the details)
  • Michigan
  • Minnesota (1 passed; legislature in recess)
  • Missouri
  • Nebraska
  • Nevada
  • New Hampshire (none remaining)
  • New Jersey
  • New York
  • North Carolina
  • Ohio
  • Oklahoma
  • Oregon
  • Pennsylvania
  • Rhode Island
  • South Carolina
  • Tennessee (1 passed; none remaining)
  • Texas
  • Utah (2 bills)
  • Vermont (none remaining)
  • West Virginia (none remaining)

Before turning to the specific developments, it’s worth noting that 10 of the bills that have been pending this session include low-wage thresholds or criteria, 14 propose a complete ban, and 32 relate to the healthcare industry.

Turning then to the developments…

Arkansas wins for easiest update: both bills are dead. (One was in the healthcare space and one was a full ban.)

California wins for putting an end to the craziest bill (AB.747), which would have (among other things) made it “cause for suspension, disbarment, or other discipline for any licensee to enter into with an employee, prospective employee, or former employee, present an employee, prospective employee, or former employee as a term of employment, or attempt to enforce any employee contract or other agreement that violates” the attorney licensure statute. The other other two bills (AB1076 and SB699) are progressing (see here for more).

Connecticut, with a total of 5 bills, is making slow progress on one: a bill (SB9) to ban noncompetes for physicians and advanced practice registered nurses. It passed the senate on May 25.

Florida, which previously won for most surprising with its bill to ban virtually all physician noncompetes, has killed the bill and renewed our faith in Florida’s pro-noncompete stance.

Indiana wins for most new laws:

  • One (SB7) does the following:
    • bans noncompetes entered into on or after July 1, 2023 for primary care physicians (defined as practicing family medicine, general pediatric medicine, and internal medicine);
    • effective July 1, 2023, makes other physician noncompetes unenforceable if (a) the employer terminates the physician’s employment not for cause or the physician terminates the employment “for cause” (which I assume means with good reason) or (b) the parties’ agreement “has expired and the physician and employer have fulfilled the obligations of the contract”; and
    • adds procedural requirements for negotiating a buyout of post-July 1, 2023 noncompetes in other circumstances.
  • The other (HB1004) creates a task force to look into various healthcare issues, including “whether: (i) noncompete clauses in practitioner contracts contributes to a restraint of trade; and (ii) prohibiting noncompete clauses would create greater competition in the health workforce . . . .”

Iowa ties Kentucky (and D.C.) for fastest to reverse a change – though it is awaiting the Governor’s signature. As you may recall, last year, Iowa passed a law to, among other things, prohibit healthcare employment agencies from “[r]estrict[ing] in any manner the employment opportunities of an agency worker by including a non-compete clause in any contract with an agency worker or health care entity.” This year, Iowa passed a law (HB357) narrowing the scope of the law by removing the restriction on direct care service providers and allowing for noncompetes for certain healthcare provider placements. (The companion senate bill died and the legislature is now in recess.)

Maine, with a new law (HB688) passed on May 25, 2023, wins for most animal friendly, becoming one of the few states to ban noncompetes for veterinarians – unless they have an ownership interest in the facility they work in. The law has retroactive effect. (Does it violate the Contract Clause? We will see.)

Michigan, with a new bill (HB4537) to ban noncompetes, wins for keeping up the Joneses, i.e., trying to get its own ban just like the ban on noncompetes enacted by its neighbor, Minnesota.

Nevada, wins for most protective of physicians by proposing to ban physician noncompetes – not just after employment, but during employment as well. The bill (AB11) is awaiting the Governor’s signature.

New Jersey, wins for most convoluted, circular-reasoning in a bill (SB3778) to ban noncompetes. The bill doesn’t directly ban noncompetes. Instead it bans the abuse of monopsony power, the existence of which can be demonstrated by the use of noncompetes. And if a company is deemed to have monopsony power (for example, as demonstrated by its use of noncompetes), then the use of noncompetes is illegal. Specifically, the bill provides: “In labor markets, abuse may include, but is not limited to, imposing contracts by which any person is restrained from engaging in a lawful profession, trade, or business of any kind, or by restricting the freedom of workers and independent contractors to disclose wage and benefit information.” (I have so many issues with this bill.)

New York, wins for one-upping its neighbor: Like New Jersey, New York’s bill (SB6748) uses a ban on monopsony power to get to a ban on noncompetes – but it makes such conduct a felony. (What is going on in this country?)

North Carolina, wins for least original minority approach, seeking to follow the lead of a few other states that have proposed to adopt Uniform Restrictive Employment Agreement Act.

Ohio, with its one noncompete bill (SB126) this year, wins for trying to level the playing field for for-profit hospitals (which would be affected by the FTC’s proposed ban) by limiting non-profit hospitals’ use of noncompetes for healthcare professionals.

Oregon, with its bill (HB3574) to ban noncompetes for physicians, wins for following the most ridiculous part of the FTC’s proposed noncompete ban, i.e., limiting the sale of business exception (in this case, a medical practice) to owners of a 25 percent or more interest in the business.

Tennessee, with a bill (SB702) to ban temporary healthcare staffing agencies from using noncompetes with direct care staff, wins for most stealthy, given that the noncompete ban was added just before it passed. Interestingly, it also bans temporary healthcare staffing agencies from certain recruiting activities.

Vermont wins for stealth killing of a noncompete ban in a much broader bill (SB103), by passing a lengthy bill with a noncompete ban, but only after removing tons of provisions, including the proposed noncompete ban.


Federal bills

As a reminder, in addition to the FTC’s proposed ban and the NLRB’s General Counsel’s memo finding noncompetes illegal under the NLRA, the five federal bills remain as follows:

(1) Senators Young and Murphy (along with the support of two other co-sponsors) filed the Workforce Mobility Act of 2023, again proposing a ban on all employee noncompetes (i.e., permitting sale of business noncompetes).

(2) Representative Scott Peters (along with the support of two other co-sponsors) filed the Workforce Mobility Act of 2023, which is the House version of the same re-proposed ban.

(3) Representative Claudia Tenney reintroduced her Ensure Vaccine Mandates Eliminate Non-Competes Act (the “EVEN Act”) “[t]o void existing non-compete agreements for any employee who is fired for not complying with an employers COVID-19 vaccine mandate, and for other purposes.”

(4) Senators Marco Rubio and Maggie Hansen reintroduced the Freedom to Compete Act. Like the prior versions, the bill would ban noncompetes for anyonenot exempt under the Fair Labor Standards Act of 1938 (29 U.S.C. 201, et seq.) — the approach taken first by Massachusetts and later by Rhode Island.

(5) Senators Klobuchar, Collins, Rosen, Tillis, King, Thune, Merkley, Capito, Coons, Paul, Durbin, Moran, Shaheen, Wicker, Smith, Marshall, Blumenthal, Cramer, and Boozman introduced the Conrad State 30 and Physician Access Reauthorization Act, which primarily addresses immigration issues for physicians in underserved communities, but would also ban the use of noncompetes for those covered by the Act.

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Resources to help

Because we know how hard it is to keep up with the ever-changing requirements around the country, we have created the following resources (available for free):

We also have a 50-State and Federal Trade Secret Law Chart, providing a comparison of 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!