We just updated our 50 State Noncompete Chart again.
This update is to reflect Nevada’s Supreme Court decision in Tough Turtle Turf, LLC v. Scott,139 Nev. Adv. Op. 47, — P.3d —- (2023). It also fixes two related scrivener’s errors.
In that case, the Supreme Court of Nevada held that a 2017 change to Nevada’s noncompete statute – which rejected a prior decision of the Supreme Court of Nevada – does not quite mean what it says.
Specifically, the court interpreted the following language in NRS 613.195(6):
[A] court shall revise [a] covenant to the extent necessary and enforce the covenant as revised. Such revisions must cause the limitations contained in the covenant as to time, geographical area and scope of activity to be restrained to be reasonable, to not impose undue hardship on the employee and to impose a restraint that is not greater than is necessary for the protection of the employer for whose benefit the restraint is imposed.
The court held that this mandatory language must be limited in light of NRS 613.195(1), which, as the court notes, “provides that ‘[a] noncompetition covenant is void and unenforceable’ if it imposes a ‘restraint that is greater than is required for the protection of the employer[; i]mpose[s] any undue hardship on the employee[; or i]mposes restrictions that are [not] appropriate in relation to the valuable consideration supporting the noncompetition covenant.’”
The court reasoned that “taken together, [the two sections] do not require a district court to always modify an overbroad noncompete covenant; however, the district court must modify an overbroad noncompete covenant when possible.” The court also provided examples: “Courts may refuse to modify a contract that is ‘so lacking in the essential terms’ that the court would have to provide them;” where “‘drastic modifications’ required to make it enforceable ‘would be tantamount to fashioning a new agreement’”; where the “defects were so substantial that the covenant ‘would have to be rewritten’ and would require ‘the making of a new contract’ . . . .” As the court explained, there is a “general rule prohibiting courts from creating new contracts for parties” and “NRS 613.195(6) does not change these or other fundamental precepts of contract law.”
Ultimately, the court explained that “NRS 613.195(6) calls for a court to ‘revise’ the noncompete covenant—not to rewrite or redraft it.”
Our chart – which was the first of its kind and has been updated regularly since 2010 – has now been updated to reflect this case and is, accordingly, fully up to date through November 10, 2023.
We will be updating the chart again (if necessary) once the Delaware Supreme Court issues its decision in Ainslie v. Cantor Fitzgerald, L.P. and, of course, for any other significant developments across the country.
Additional firm resources:
We know 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);
- Notice requirements summary chart, providing details for each of the 8 states (plus D.C.) that has notice requirements related to noncompetes (downloadable PDF);
- 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).
- “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;
- Trade secret and other legitimate business interest protection plan strategy and checklist; and
- Ten Minute Trade Secret Training Series, currently with three training videos and one “basics” video:
We hope you find all of these resources useful. More are coming.
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.
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*A huge thank you to Erika Hahn for all of her extraordinary help in tracking and monitoring all of the bills around the country and helping me make sure that all of our resources are current and accurate. And, in the words of John Marsh, hat tip to Keith Paul Bishop, who was the first (that I saw, anyway) to find and report on the case.