Noncompete bills update: 73 bills in 33 states, 15 dead, 6 new laws enacted

June 20 revision: state count updated to include Colorado’s limitation on employee recovery and to add map

For those keeping track, there have already been lots of changes to noncompete laws (and related laws) this year, and they will likely continue.

Recap

Here are the six new noncompete laws that passed so far this year:

  • Colorado amended its noncompete law to limit an employee’s remedies when the attorney general brings an action on behalf of the employee for a violation of the noncompete law. (The new law will likely take effect on August 7, 2024.)
  • Iowa removed the significant penalties (potential loss of registration and fines) for employment agencies violating the ban on noncompetes for certain of their healthcare workers (effective July 1, 2024, with retroactive impact).
  • Louisiana imposed significant limitations on the use of noncompetes for primary care physicians (PCPs) and other physicians (effective January 1, 2025, with retroactive impact).
  • Maryland restricted the use of noncompetes for physicians and other healthcare providers (effective July 1, 2025) and banned them for veterinarians and vet techs (effective June 1, 2024 with questionable retroactive impact).
  • Rhode Island banned (through two bills) noncompetes for advanced practice nurses (effective June 14, 2024).
  • Washington expanded its noncompete law making it harder to enforce noncompetes (effective June 6, 2024).

In addition to the noncompete bills that passed this year, bills relating to other restrictive covenants have also passed this year, including the following:

  • Colorado amended its law to give its attorney general the ability to promulgate regulations concerning training repayment agreements (sometimes pejoratively called “TRAPs” by adding the redundant term, “provisions,” to the name: “training repayment agreement provisions”) and to enforce those laws. (As noted above, the new law will likely take effect on August 7, 2024.)
  • Minnesota passed a new law limiting disintermediation (no-poach) agreements between “service providers” (i.e., companies acting as “an employer or manager for work contracted or requested by a customer”) and their customers (effective July 1, 2024).
  • Washington expanded its law to make it harder to enforce nonsolicitation agreements and no-service agreements (effective June 6, 2024).

The stats

State: 

  • 73 noncompete bills have been pending in 33 states (so far) this year.
  • Fifteen of those noncompete bills already died.
  • Seven noncompete bills (6 new laws) were enacted (see above).

Federal: 

  • Six bills are (still) pending in Congress, as well as 2 B2B no-poach bills, called the “End Employer Collusion Act.” (These were all covered in our March 10 post.) Lest you think Congressional efforts will go away, proponents of these bills are still trying to push their bills forward.

If you want more details, see here and here.

Regulatory efforts

Obviously, the elephant in the room is the FTC’s noncompete rule.

All other developments in the cases challenging the rule aside (more on that later), perhaps the most curious is why U.S. Representative Matt Gaetz (Florida republican and Trump acolyte) filed an amicus brief in support of the FTC’s rule in the Ryan case pending before Judge Brown in the Northern District of Texas.

In raising this question, it is not my intent to express an opinion about Matt Gaetz or his politics or, for that matter, about Lina Khan or President Biden or their politics. Rather, I raise it because it’s striking to see these people on the same side of such a contentious issue — especially one involving the scope of the power of an administrative agency.

Tellingly in that regard, on the substance, Gaetz’s brief offers little new.

To the extent he discusses legislative intent, he simply reiterates points already made by other parties. And, it’s not like he can offer a unique perspective; he was not in Congress during any of the relevant activities.

On the other hand, Gaetz’s brief does offer something new insofar as it argues that Congress has oversight of the FTC and can (sort of) “overturn . . . administrative rules.” But that misses the point. This is not about Congress approving or disapproving an agency’s lawful exercise of its authority. The issue is the FTC’s lack of authority to issue the rule in the first place or that it abused its authority. The FTC’s ultra vires conduct is for the courts to address, not Congress.

That aside, the hearings Representative Gaetz referenced are hardly compelling. If you have seen them, you know that they are frequently nothing more than a made-for-media, political grandstanding circus.

Given all of that, what does Gaetz have to gain with his brief? Is he trying to have the court cede some of its Article III authority to Congress? (Looks that way.) Or, given his alignment with Trump and that Judge Brown is a Trump appointee, is he is signaling to Judge Brown that Trump would be okay with the ban?

Or maybe I’ve just become a conspiracy theorist!

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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):

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.