Quick Hits

• Wyoming enacted legislation that will void noncompete agreements with employees with limited exceptions.
• Noncompete agreements will remain permissible in certain contexts, such as the sale of a business, the protection of trade secrets, the recovery of employers’ costs to relocate or train employees, and to restrict post-employment activity of executive or managerial personnel and their key staff.
• The law also prohibits noncompete clauses in agreements involving physicians and will allow them to inform patients with certain rare disorders of their new practice without facing liability.
• The law only applies to contracts entered into on or after July 1, 2025.

On March 19, 2025, Governor Mark Gordon signed Senate File 107 into law, which will significantly limit the enforceability of noncompete covenants in employment contracts. The new legislation, which will take effect on July 1, 2025, applies to contracts entered into on or after that date. Employers that use restrictive covenants will have to rethink how they protect their business interests and manage their workforce.

In enacting the new noncompete prohibitions, Wyoming joins a growing list of states, which includes California, Minnesota, and Oklahoma, to impose significant restrictions or completely ban employee noncompete agreements. Ohio is also considering a bill that would ban noncompete agreements for workers or prospective workers this legislative session.

Here is what employers need to know about the new Wyoming law and its implications.

Employee Noncompete Agreements Are Void

The law declares that as of July 1, 2025, “[a]ny covenant not to compete that restricts the right of any person to receive compensation for performance of skilled or unskilled labor” is void. The law applies prospectively to contracts entered into on or after July 1, 2025, specifically stating that “[n]othing in this act shall be construed to alter, amend or impair any contract or agreement entered into before July 1, 2025.”

Key Exceptions to the Ban

While Senate File 107 broadly invalidates noncompete agreements, the law contains some notable exceptions:

• Sale of Business—Under the law, noncompete clauses remain enforceable in contracts related to the purchase and sale of a business or its assets.
• Protection of Trade Secrets—The law will permit the use of noncompete agreements or clauses “to the extent the covenant provides for the protection of trade secrets” as they are defined under state law.
• Recovery of Training Expenses—The law permits employers to include provisions in employment contracts allowing them to recover relocation, education, and training expenses, with recovery amounts decreasing based on the length of the employee’s service. (Up to 100 percent for service less than two years, up to 66 percent for between two and less than three years, and up to 33 percent for between three and less than four years.)
• Executive and Management Personnel—The law exempts the noncompete ban for agreements involving “[e]xecutive and management personnel and officers and employees who constitute professional staff to executive and management personnel.”

Although not defined, the “executive and managerial personnel” restriction substantially mirrors a prior version of Colorado’s noncompete statute. Cases interpreting the Colorado statute recognized that the issue would typically be a question of fact. However, courts routinely recognized that restrictive covenants could be applied to both key personnel who are “in charge” and individuals who conduct or supervise a business, often including various levels of management.

Special Considerations for Physicians

Senate File 107 specifically declares void “[a]ny covenant not to compete provision of an employment, partnership or corporate agreement between physicians that restricts the right of a physician to practice medicine … upon termination of the physician’s employment, partnership or corporate affiliation.” The law will further allow physicians, upon termination of their employment, the partnership, or corporate affiliation, to inform patients with certain “rare disorders[s]” about their new practice and provide their contact information without facing liability.

Next Steps

Wyoming’s new noncompete law marks a significant shift in the state, reflecting a broader national trend. That trend could continue, particularly after a 2024 Federal Trade Commission (FTC) rule that sought to ban nearly all noncompete agreements in employment was struck down in court. The government had appealed but the Trump administration has halted those appeals while it considers the FTC’s rule.

In light of the changes, employers in Wyoming may want to consider reviewing and revising any new employment contracts and evaluating alternative strategies for protecting their business interests. Employers using noncompete agreements may want to consider whether those provisions are being applied in one of the specifically enumerated exceptions. Employers may also want to ensure that noncompete agreements that fall into one of the permissible categories have reasonable geographic and temporal limitations. Wyoming courts will not blue pencil or revise noncompliant restrictive covenants, and instead, noncompliant restrictive covenants will be voided.