While the federal administration has backed off of the FTC Non-Compete Ban rule, states continue to pass laws further restricting employers’ use of non-competes. Virginia and Wyoming have recently passed laws which will further limit non-competes starting as of July 1, 2025. 

Virginia law already prohibits non-competes for “low wage” employees, which includes those earning below a certain compensation threshold (currently $1,463 per week), as well as interns, students, apprentices, or trainees.

Virginia recently amended this law to include non-exempt/OT eligible employees within that definition of a low-wage worker for whom a non-compete is prohibited.  This amendment will only apply to agreements entered into on or after July 1, 2025.

Wyoming recently passed a law providing that non-competes entered into on or after July 1, 2025 are void, except for the following scenarios:

  1. connection with a sale of business;
  2. executive and management personnel and officers and employees who constitute professional staff to executive and management personnel; or
  3. the covenant provides for the protection of trade secrets as defined under state law (i.e. the whole or a portion or phase of a formula, pattern, device, combination of devices or compilation of information which is for use, or is used in the operation of a business and which provides the business an advantage or an opportunity to obtain an advantage over those who do not know or use it.” Wyo. Stat. § 6-3-501(a)(xi))

The new Wyoming law also appears to regard contractual provisions requiring repayment of training, education, and/or relocation expenses as non-compete, but permits such agreements if an employee leaves within 4 years, with varying repayment percentages based on tenure:

  1. up to 100% if employment lasted less than two years;
  2. up to 66% if employment was between two and three years, or
  3. up to 33% if employment was between three and four years

Employers who continue to hire talent around the country, including remote employees, should make sure that they update the protective covenants agreement to account for these state developments. Reach out to counsel with any questions.