As you may recall, eleven states and Washington, D.C. have adopted minimum compensation thresholds or other criteria related to protecting workers from noncompetes based on wage or similar criteria.
In order of effective date, they are: Oregon (2008; updated 2022), Illinois (2016; updated 2022), Massachusetts (2018), Maine (2019), Maryland (2019; updated 2023; refined in 2024), New Hampshire (2019), Rhode Island (2020), Virginia, (2020), Washington (2020), Nevada (2021), Colorado (2022), and Washington, D.C. (2022).
But note that they are not all static.
In six of these states and D.C., the thresholds are to be determined annually: Colorado, Maine, Oregon, Rhode Island, Virginia, Washington, and Washington, D.C.
Although not determined annually, Maryland seems inclined to occasionally increase and expand its thresholds through additional legislation.
The remaining states either have no regular increases (Illinois and New Hampshire) or use a different standard (Massachusetts and Nevada).
Some of these states also have thresholds for the use of other restrictions: nonsolicitation agreements (Colorado, Illinios, possibly New Hampshire and, depending on the scope of the covenant, Washington); no-recruit agreements (Illinois); no-service agreements (possibly Colorado, and Virginia and Washington); and conflict-of-interest/anti-moonlighting policies and restrictions (Maryland and Washington, D.C.). This update is to flesh out which restrictive covenants are or might be covered. Note the footnote to the chart.
The details are in our updated chart:
We will continue to keep you posted as things develop.
In the meantime, you may also want to check your agreements more generally to make sure you are complying with the noncompete laws in all states in which you have employees. Our 50-state noncompete chart (the first of its kind, created in 2010, and updated regularly since to keep track of the ever-changing noncompete laws) can serve as a starting point.
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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) (to be updated for the new exemptions in Illinois and Pennsylvania);
- 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. We 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.