Amid growing discontent among physicians on noncompete agreements, which prohibit clinicians from joining a competing practice or setting up their own within a particular distance from their previous practice for a certain period of time, many states have amended their regulations.
Here is a rundown of noncompete rules across the U.S., as laid out by attorneys from the law firm Constangy, Brooks, Smith & Prophete on Aug. 29 in JDSupra:
Alabama: Noncompetes are enforceable only against key employees, such as those with access to trade secrets or confidential information, and are limited to two years.
California: Noncompetes are not enforceable and violate public policy.
Colorado: Noncompete agreements entered into on or after Aug. 10, 2022, cannot be used against workers who earn less than $112,500 in 2023.
District of Columbia: The wage threshold for noncompetes is $150,000 per year, or $250,000 per year for "medical specialists." Written notice of the noncompete must be provided within 30 days of an employee’s acceptance of employment as well as anytime the policy changes.
Georgia: Restrictions on solicitation of employees to have a geographic limitation.
Illinois: Employees who earn less than $75,000 for 2023 cannot be restricted by noncompetes. These thresholds will increase yearly through 2037. The state requires written notice to be given before entering into noncompetes: New employees must be given 14 days notice and existing employees must be given at least 14 days to review the agreement before it goes into effect.
Indiana: Noncompetes are enforceable only against key employees.
Louisiana: Noncompetes must identify the parishes/counties encompassed by the agreement by name.
Maine: Noncompetes cannot be enforced against employees who earn less than or equal to 400 percent of the federal income poverty level, which in 2023 is $14,580.
Maryland: Noncompetes can be enforced only on employees earning more than $15 per hour, or $31,000 annually — the lowest wage threshold of any state with wage requirements. Effective Oct. 1, the threshold will increase to $19.88 per hour ($19.20 for small employers).
Massachusetts: Noncompetes are not enforceable against workers who are nonexempt under the federal Fair Labor Standards Act, 18 or younger, or undergraduate or graduate students in an internship or other short-term employment relationship while enrolled in college or graduate school.
Minnesota: The state prohibits post-employment noncompetes. However, agreements signed on or before July 1, 2023, remain enforceable.
Nebraska: The state's courts will not under any circumstances modify a noncompete to make it enforceable.
Nevada: Noncompetes are not permitted if the employee is paid only on an hourly basis. They cannot preclude an employee from providing services to any former client or customer if the employee did not solicit the former client or customer or if they chose to leave the employer and seek services from the employee. Employees can recover attorneys' fees in civil actions for noncompete violations.
New Hampshire: Noncompetes cannot be enforced against employees who earn less than or equal to two times the federal minimum wage or the state tipped minimum wage, whichever applies. Employers must provide notice of the noncompete agreements to new candidates before they accept the position.
New York: A bill passed by both chambers of the state Legislature provides for a complete ban on noncompetes. It is awaiting the signature of Gov. Kathy Hochul. The bill will not be retroactive.
North Dakota: Noncompetes are banned.
Oklahoma: Noncompetes are banned.
Oregon: For agreements entered into before Jan. 1, 2022, an employee’s annual gross salary and commissions must exceed the median family income for a four-person family.
For agreements entered on or after Jan. 1, 2022, the employee's annual salary and commissions must exceed $108,576 for 2023.
Rhode Island: Noncompetes are not enforceable against workers who are nonexempt under the federal Fair Labor Standards Act, 18 or younger, or undergraduate or graduate students in an internship or other short-term employment relationship while enrolled in college or graduate school, or earn less than 250 percent of the federal poverty level ($36,450 in 2023).
Virginia: Employees must earn a minimum of $70,000 to be eligible for noncompete agreements. This threshold does not apply to workers who earn based on commissions, incentives or bonuses.
Washington: Noncompetes are not enforceable against employees earning less than or equal to $116,593.18 per year, or $291,482.95 for independent contractors, for 2023.
Wisconsin: Noncompetes are enforceable only against key employees with access to trade secrets or confidential or proprietary information.