LITIGATION TRENDS 2025 | 51 T O C E M P E S G A N T I I P C A P R O W C S P O R T C O N T A C T I N T A P P P A T C C L S E C provisions do not need to contain an express geographic restriction in order to be enforceable, and must simply be reasonable in in light of the totality of the circumstances. This includes factors such as the nature of the business, the time and scope limitations of the restriction, the business interests justifying the restrictive covenant, and the geographic area implicitly encompassed by the provision. In October 2024, then-NLRB General Counsel Jennifer Abruzzo issued a memorandum on the enforcement of non-competes under the NLRA. Ms. Abruzzo reiterated her view that noncompete agreements for nonsupervisory employees violate the NLRA, except in limited circumstances. The General Counsel extended this argument to “stay or play provisions” – agreements requiring employees to pay their employer if they end their employment before a certain date – and discussed damages employers might face for maintaining these agreements. Such financial barriers, In 2024, many states also passed new non-compete laws specifically affecting those in healthcare, including: MARYLAND Maryland banned non-compete agreements for veterinarians and implemented income thresholds for healthcare providers. See Maryland Code of Lab & Empl. § 3-716. RHODE ISLAND Rhode Island banned noncompete agreements for advanced practice registered nurses. See R.I. Gen. Laws § 5-34-50. LOUISIANA Louisiana limited non-compete restrictions allowed in physician contracts. See La. Rev. Stat. § 23:921. IOWA Iowa removed significant penalties from their 2022 law limiting non-compete agreements on healthcare employment agency workers. See Iowa Code § 135Q.2 ILLINOIS Illinois banned non-competes for professionals providing mental health services to veterans and first responders, as well as for individuals employed in the construction industry. See SB2737, SB2770. Employment Statewide Changes In 2024 through early 2025, the flurry of bills regarding the use of non-compete agreements continued, with several laws being passed in state legislatures, including: NEW YORK CITY In February, and almost immediately following Governor Hochul’s veto of a bill that would ban non-competes in New York state, members of the New York City Council proposed three bills that would restrict non-competes at various levels, but those have not since seen any traction with the rest of the City Council. CALIFORNIA In California, S.B.699 and A.B. 1076 took effect on January 1, 2024, which not only codified existing non-compete bans, but also empowered employees to sue their employer for imposing or trying to enforce a non-compete agreement against them VIRGINIA On March 24, 2025, Governor Youngkin signed into law SB1218, adding an additional category to Virginia’s existing ban on non-competes for certain low wage workers. Effective July 1, 2025, employees who are non-exempt under the federal Fair Labor Standards Act cannot be subject to non-compete agreements in Virginia. WASHINGTON On June 6, 2024, Washington’s amendments to its non-compete statute took effect, which: (i) broadened the definition of a non-compete to include agreements that prohibit a former employee or independent contractor from accepting or transacting business with a customer; (ii) limited the sale of business carve-out to only transactions involving 1% or more of the business; (iii) narrowed the definition of a non-solicitation agreement to apply only to covenants that prohibit the solicitation of “current” customers; (iv) clarified the notice requirement and venue and choice of law provisions; (v) expanded the retroactive application to covenants pre-January 1, 2020 being “explicitly leveraged”; and (vi) expanded standing to bring a private right of action. See SB5935. WYOMING Wyoming enacted Wyo. Stat. § 1-23108, banning non-compete agreements in the state, except in the cases of “executive and management personnel and officers and employees who constitute professional staff to executive and management personnel” and sale of business contexts. Employers may also use narrowly tailored noncompete restrictions solely to protect trade secrets, and the law also protects employers’ ability to recoup certain training and relocation expenses. The new law applies to contracts entered into on or after July 1, 2025. 50 | Weil, Gotshal & Manges LLP
RkJQdWJsaXNoZXIy MTI5NDgyMg==