On March 19, 2025, Wyoming became one of the latest states to enact legislation banning noncompete agreements.
The new law, which goes into effect July 1, 2025, voids “[a]ny covenant not to compete that restricts the right of any person to receive compensation for performance of skilled or unskilled labor.” The law applies only to contracts entered into on or after July 1, 2025, and specifically states that nothing in the law alters, amends or impairs “any contract or agreement entered into before July 1, 2025.”
The law, as drafted, broadly applies to any agreement containing a noncompete clause, such as an employment agreement, independent contractor agreement, or some other type of agreement. The law does not impact or address non-solicitation agreements.
Though the new law appears on its face to be far-reaching, it contains notable exceptions that effectively narrow the scope of noncompetes impacted by the law, discussed below.
Trade Secret Exception
The Wyoming noncompete ban does not include covenants not to compete “to the extent the covenant provides for the protection of trade secrets as defined by W.S. 6-3-501(a)(xi).” Under W.S. 6-3-501(a)(xi), “trade secret” is broadly defined as:
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. “Trade secret” includes any scientific, technical or commercial information including any design, process, procedure, list of suppliers, list of customers, business code or improvement thereof. Irrespective of novelty, invention, patentability, the state of the prior art and the level of skill in the business, art or field to which the subject matter pertains, when the owner of a trade secret takes measures to prevent it from becoming available to persons other than those selected by the owner to have access to it for limited purposes, the trade secret is considered to be:
(A) Secret;
(B) Of value;
(C) For use or in use by the business; and
(D) Providing an advantage or an opportunity to obtain an advantage to the business over those who do not know or use it.
The breadth of Wyoming’s statutory definition of “trade secret” arguably leaves employers with a fair amount of leeway to structure their restrictive covenants so that they fall under this exception.
Executive and Management Personnel Exception
The law also excludes noncompete agreements entered into with executive and management personnel and officers and employees who constitute professional staff to executive and management personnel. The law does not define the terms “executive and management personnel” or “officers and employees who constitute professional staff to executive and management personnel,” potentially providing employers relatively wide latitude in determining which employees may fit within this exception.
Physicians
The law also voids covenants not to compete in employment, partnership or corporate agreements between physicians that restrict the rights of a physician to practice medicine as that term is defined under Wyoming’s Medical Practice Act. All other provisions of a physician’s agreement that are “enforceable at law shall remain enforceable.”
Additionally, physicians will be permitted to disclose their “continuing practice of medicine and new professional contact information to any patient with a rare disorder as defined in accordance with the national organization for rare disorders, or a successor organization, to whom the physician was providing consultation or treatment before termination of the employment, partnership or corporate affiliation.” Physicians, and their new employers, shall not be liable for any damages resulting from the disclosure or from the physician’s treatment of the patient following the termination of the agreement or the physician’s employment, partnership or corporate affiliation.
Expense Repayment Provisions
Contractual provisions for recovering the “expense of relocating, educating and training an employee” are also exempt from the new law pursuant to the following statutory repayment provisions based on how long the employee has worked for the employer:
(A) Less than 2 years: Recovery up to 100% of expenses
(B) At least 2 years but less than 3 years: up to 66% of expenses
(C) At least 3 years but less than 4 years: 33% of expenses
(D) 4 or more years: 0% of expenses
Contract for the Purchase and Sale of a Business or Its Assets
Finally, the law also excludes covenants not to compete that are contained in a contract for the purchase and sale of a business or the assets of a business.
Key Takeaways
Employers wishing to enter into noncompete agreements on or after July 1, 2025 may only do so if the noncompete falls within one or more of the law’s specific carveouts. Notably, the law does not provide for any statutory damages or penalties, such as an attorneys’ fee-shifting or “loser pays” penalty, should a party choose to challenge the validity of a noncompete agreement. The law’s lack of a damages or penalties provision could potentially diminish the law’s impact as employers may perceive little risk in asserting a noncompete provision which falls under one or more of the law’s more expansive exceptions, such as the trade secret exception or executive and management personnel exception.
As Wyoming joins the growing list of jurisdictions considering and adopting legislation governing noncompetes, we will continue to report on key legislative updates and trends
