Wyoming Adopts Statutory Limits for Noncompetes

The Wyoming State Legislature has adopted a statute limiting the use of noncompete restrictions for Wyoming workers. Importantly, the Wyoming statute is not a categorical ban on noncompetes and protects the validity of these restrictions in the context of a purchase or sale of a business, for the protection of trade secrets and over executive and management personnel and officers, among other situations. The statute does not impact non-solicitation and non-recruitment prohibitions or nondisclosure or confidentiality agreements. The new law becomes effective on July 1, 2025.

Overview of the Wyoming Noncompete Statute

Previously, Wyoming allowed employers considerable flexibility in drafting noncompete agreements. However, under the new statute, any noncompete agreement that restricts an employee’s ability to earn a living, whether in skilled or unskilled labor, is generally void, unless it falls within one of the enumerated exceptions:

• Covenants not to compete contained in a contract for purchasing or selling a business.
• Covenants not to compete that provide for the protection of trade secrets as defined in the Wyoming Criminal Code
• Contractual provisions that allow for the recovery of relocation, education and training expenses.
• Noncompete clauses applicable to executive and management personnel and officers and employees who constitute professional staff to executive and management personnel.

Notably, a business’ ability to recover expenses incurred from training, education or relocating a Wyoming employee is not without limit. The law specifies that employers can recover up to 100% of these expenses if employment lasted less than two years, up to 66% if employment was between two and three years, and up to 33% if the employment term was between three and four years.

The Wyoming noncompete statute comes several years on the heels of the 2021 decision by the Wyoming Supreme Court, Brown v. Best Home Health & Hospice, LLC, in which the state high court reversed a preliminary injunction that upheld the validity and enforceability of a noncompete and prohibited nurses from working for a competitor. That court emphasized the importance of public policy in building Wyoming business and the purported anti-competitive impact of noncompete restrictions on Wyoming health care.

Physician Noncompetes Impermissible

The new law ushers in an important change in Wyoming health care specifically. The statute explicitly prohibits all noncompete clauses in employment, partnership and corporate agreements restricting a physician’s right to practice medicine. However, non-solicitation, non-recruitment and confidentiality restrictions remain unaffected. Even so, special protections for physicians treating patients with rare disorders are carved out, which permit such doctors to inform these patients of their new practice location and contact details, ensuring continuity of care without legal repercussions.

Practical Guidance for Employers

The Wyoming noncompete statute will impact agreements entered into on or after July 1, 2025. To effectively manage this change, we recommend that employers review their current employment agreements to identify any noncompete provisions that are proscribed by the new law. Employers should also focus on strengthening trade secret protection measures through confidentiality agreements and other restrictive covenants, including non-solicitation and non-recruitment provisos.

We are here to assist you with navigating these changes and ensuring that your employment agreements are in full compliance with the new Wyoming law. Please do not hesitate to reach out to us with any questions or for further assistance.

THIS DOCUMENT IS INTENDED TO PROVIDE YOU WITH GENERAL INFORMATION REGARDING STATUTORY LIMITS FOR NONCOMPETES IN WYOMING. THE CONTENTS OF THIS DOCUMENT ARE NOT INTENDED TO PROVIDE SPECIFIC LEGAL ADVICE. IF YOU HAVE ANY QUESTIONS ABOUT THE CONTENTS OF THIS DOCUMENT OR IF YOU NEED LEGAL ADVICE AS TO AN ISSUE, PLEASE CONTACT THE ATTORNEYS LISTED OR YOUR REGULAR BROWNSTEIN HYATT FARBER SCHRECK, LLP ATTORNEY. THIS COMMUNICATION MAY BE CONSIDERED ADVERTISING IN SOME JURISDICTIONS.