Starting July 1, businesses in Wyoming won’t be able to require people to sign non-compete agreements.
That’s because of a bill that passed during this past legislative session that largely flew under the radar of public attention.
Senate Enrolled Act 87 bans non-compete agreements, making Wyoming the fifth state to do so. The law only applies to non-compete agreements moving forward and does not repeal any existing agreements already in place by July 1.
State Sen. Tara Nethercott, R-Cheyenne, the bill sponsor, told Cowboy State Daily that non-compete agreements are antithetical to Wyoming’s free market values, limiting wage growth and preventing upward mobility by blocking people’s ability to change jobs in certain situations.
“When you can’t continue to work in a certain occupation you often have to move away,” she told Cowboy State Daily.
Non-compete agreements basically prevent people employed by a certain company from working for a competitor for a certain period of time after leaving a company.
They are common in the health care field but also pop up in other industries like welding and the media. Nethercott said she even met a school lunch lady who was impacted.
Their general purpose is to prevent workers from leaving a business to go to a competing entity shortly after, particularly after a significant amount of money was spent training them.
The Federal Trade Commission attempted to ban most non-compete agreements last year, but was blocked by a federal court last August.
"With this legislation, we are not just protecting workers, we are also strengthening our economy by ensuring businesses can attract and retain top talent without artificial barriers," Nethercott said in a statement. "Wyoming is open for business, and this bill sends a clear message that we support innovation and economic freedom."
Wyoming Issue
In 2021, Rock Springs attorney and former state legislator Clark Stith represented a group of nurses in one of the four non-compete cases brought before the Wyoming Supreme Court in recent years, where the nurses were forcibly unemployed because of a non-compete agreement.
Stith won that case, but said the state’s non-compete laws still needed significant changes that struck a balance between employer and worker’s rights.
The state Supreme Court recommended the Legislature take up the issue a few years ago while Stith was in the Legislature. Nethercott’s bill this year continued that effort, which Stith said he was pleased to see.
Stith said in industries like health care or welding, an employee could be forced to leave their community to continue pursuing their profession after leaving a job with a non-compete clause.
“They’re great if you get along with your employer, but if you’re laid off you often have to up and leave the state,” he said.
Rep. John Bear, R-Gillette, was one of 21 House members to vote against the bill. Bear believes SEA 87 amounts to government overreach and meddling in the free market, as well as prioritizing workers’ rights over employers’ rights.
“These agreements should be born between the employee and their employer,” he said. “It’s an overregulation into the free market.”
Bear believes the free market should dictate whether businesses can find employees who will work with a non-compete agreement in place.
“If they can’t, maybe they have to back off having a non-compete agreement,” he said.
The Wyoming Hospital Association also opposed SEA 87.
Although Bear understands why some Wyoming nurses have felt constricted by non-compete agreements, he believes there are still a significant number of traveling nursing opportunities they can pursue.
Some Compromise
SEA 87 contains exemptions for executive and management personnel and officers and employees who are considered professional staff to executive and management personnel. Neither physicians nor nurses are considered part of that group, Nethercott clarified.
The law also allows companies to seek reimbursements for relocating, educating and training employees within certain timeframes, which Nethercott said also could apply to signing bonuses, a commonly offered feature in the healthcare industry. These include expenses for an employee who has served up to four years, ranging from 33%-100% reimbursements depending on how long they were with a business.
The release of trade secrets is also still prohibited.
“It’s really understanding the cost-benefit analysis for both employers and employees,” Nethercott said of the new law.
Leo Wolfson can be reached at leo@cowboystatedaily.com.
