Wyoming Enacts Significant Restrictions on Noncompete Agreements

At a Glance

• The statutory exceptions to Wyoming’s new law include covenants not to compete in sales of business; those protecting trade secrets; provisions for recovering relocation, education and training expenses for employees based on their tenure; and covenants for executive, management or professional staff.
• The new law is scheduled to take effect on July 1, 2025.

On March 19, 2025, Wyoming enacted a new law that considerably narrows the circumstances in which Wyoming employers can enter noncompete agreements. The law prohibits any covenant not to compete that restricts the right of any person to receive compensation for performance of skilled or unskilled labor unless it falls under one of four statutory exceptions. Given that the law applies this restriction to agreements with any “person,” this bans noncompete agreements with both employees and independent contractors. 

Statutory Exceptions

The exceptions are as follows:

1. Any covenant not to compete contained in a contract for the purchase and sale of a business or the assets of a business.
2. Any covenant 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).
3. Any contractual provision providing for the recovery of all or a portion of the expense of relocating, educating and training an employee as follows:
   1. Recovery of not more than 100% of the expense for an employee who has served an employer for a period of less than two years.
   2. Recovery of not more than 66% of the expense for an employee who has served an employer for between two and less than three years.
   3. Recovery of not more than 33% of the expense for an employee who has served an employer for between three and less than four years.
4. Any covenant not to compete with executive and management personnel and officers and employees who constitute professional staff to executive and management personnel. The statute does not define the terms “executive and personnel management” or “professional staff,” so which specific employees would qualify for this exemption is an open question.

In addition, the law voids any covenant not to compete provision of an employment, partnership or corporate agreement between physicians that restricts the right of a physician to practice medicine as defined in W.S. 33 26 102(a)(xi), upon termination of the physician's employment, partnership or corporate affiliation. The law also clarifies how physicians may disclose a change in employment to persons with rare disorders.

The new law is effective July 1, 2025, and applies to contracts entered on and after July 1, 2025. The law explicitly states that it is not to be construed to alter, amend or impair any contract or agreement entered into before July 1, 2025.

Key Takeaway

What does this mean for employers? Because the law is scheduled to take effect July 1, 2025, Wyoming employers should begin to review their template employee agreements to ensure their agreements are compliant in light of the new law.