Here are four recent state-level update to regulations surrounding noncompete agreements, as reported by Becker’s:
1. Virginia enacted a law expanding limits on noncompete agreements for certain employees. The law, SB 170, bars enforcement of noncompete agreements for employees who are discharged without severance benefits or other monetary payment, unless the employee is terminated for cause. It takes effect July 1, 2026, and applies prospectively.
2. Maine Governor Janet Mills signed a law limiting noncompete clauses in employment contracts for rural healthcare workers. The bill will go into effect in 90 days.
3. Legislators in Iowa passed a bill to ban University of Iowa Health Care from utilizing noncompete clauses in employment contracts. The bill passed out of the state Senate by a vote of 43-2. It now heads back to the House for reconsideration, as members of the Senate amended it to include physician assistants, advanced practice registered nurses, licensed practical nurses, pharmacists and registered nurses as well as physicians.
4. Employment-based noncompete agreements will become void and unenforceable in Washington by June 30, 2027. The law also includes a sale-of-business exception, but the exception only applies if the person signing the noncompete “purchases, sells, acquires, or disposes of an ownership interest representing one percent or more of the business.”
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