2025 Noncompete Law Updates

As of May 2025, significant legislative changes have been enacted in numerous states concerning noncompete agreements. These changes impact various sectors and employee classifications. Employers using noncompete agreements in these jurisdictions should be aware of these changes, which reflect a continues shift in the noncompete agreement landscape.

New Restrictions Effective July 2025

Arkansas

Effective mid-July 2025, Arkansas will prohibit noncompete agreements that “restrict the right of a physician to practice within the physician’s scope of practice.” The term “physician” is broadly defined to include individuals licensed under the Arkansas Medical Practice Act, as well as those licensed to practice osteopathy under Arkansas law. Once in effect, the law will render such noncompete agreements void and unenforceable.

Virginia

Beginning July 1, 2025, Virginia will expand its existing noncompete law to provide broader protections to workers. Since 2020, Virginia has prohibited employers from entering into, enforcing, or threatening to enforce noncompete agreements against “low-wage employees,” defined as those earning less than a threshold amount (currently $76,081 annually). Under the amended law, the definition of “low-wage employee” will also include any worker classified as nonexempt under the Fair Labor Standards Act (FLSA)—that is, those entitled to overtime compensation—regardless of income level.

The law prohibits employers from applying noncompete agreements to these employees and provides for significant enforcement mechanisms, including injunctive relief, damages, attorneys’ fees, and civil penalties of up to $10,000 per violation.

Wyoming

Effective July 1, 2025, Wyoming will void any noncompete agreement that restricts a person’s right to receive compensation for performing labor, regardless of whether the individual is classified as an employee or independent contractor. Although the law is not retroactive, it applies broadly to any agreements entered into on or after the effective date. The Act includes limited exceptions, notably allowing noncompete agreements with “[e]xecutive and management personnel and officers and employees who constitute professional staff to executive and management personnel.”  While these terms are not defined in the statute, the language closely tracks a prior version of Colorado’s noncompete law and may be interpreted similarly by courts. The law also lacks explicit exceptions for non-solicitation agreements, leaving open questions about their enforceability. Additionally, the Act contains a separate provision that voids any noncompete agreement between physicians that restricts a physician’s ability to practice medicine – giving physicians full rights to communicate their new practice location and information to patients with rare disorders (as defined by the National Organization for Rare Disorders) without risk of litigation. Finally, the Act imposes new limits on expense repayment agreements, such as those related to relocation, training, or education, by capping the amount an employer can recover based on the employee’s length of service.

While Wyoming courts have previously imposed common-law limits on noncompetes—including reasonableness and public policy considerations—those standards will likely continue to apply only to agreements entered into before July 1, 2025, or those falling within the statute’s narrow exceptions.

Maryland

Beginning July 1, 2025, Maryland voids noncompete or conflict of interest clauses that restrict the ability of certain healthcare workers to work for a new employer or become self-employed in a similar business or trade, aligning their protections with those given to veterinarians. The limitation applies only to healthcare professionals who (1) are required to be licensed under the Health Occupations Article (including physicians, physician assistants, nurse practitioners, nurses, dentists, pharmacists, psychologists, optometrists, social workers, nursing home administrators, and massage therapists), (2) provide direct patient care, and (3) earn $350,000 or less in total annual compensation.  For those healthcare professionals who provide direct patient care and earn more than $350,000, noncompete agreements may be enforceable if they (1) are limited to one year from the healthcare professional’s last day of employment and (2) and have a geographic scope of no more than 10 miles from the primary place of employment. Additionally, if a patient requests it, the former employer must inform them of the former employee’s new practice location.

The statute expressly provides that, as to healthcare professionals, it applies only to agreements executed on or after July 1, 2025. It therefore does not have retroactive effect.

Recent Restrictions Already in Effect

Utah

Effective May 7, 2025, Utah prohibits a “health care services platform” from requiring a health care worker to enter into a noncompetition agreement. The law defines “health care services platform” as “a person that operates or offers for use” an “electronic program, system, or application through which a health care worker may accept a shift to perform a health care service or role, as an independent contractor, at a health care facility.”

Louisiana

Effective January 1, 2025, Louisiana limits physician noncompete agreements to three years for primary care physicians (those practicing general family medicine, internal medicine, pediatrics, obstetrics, gynecology) and five years for specialty physicians, beginning from the effective date of the initial agreement. After these respective periods, renewals or subsequent contracts cannot include a noncompete. If a physician terminates the agreement early, the employer may impose a post-employment restriction of up to two years limited to the parish of the physician’s principal practice and up to two contiguous parishes.  The law exempts physicians employed by rural hospitals and federally qualified health centers. These rules apply to any contract entered into on or after January 1, 2025, and retroactively apply the time limits to earlier agreements beginning on that date.

Pennsylvania

Effective January 1, 2025, Pennsylvania will ban noncompete agreements that that have “the effect of impeding” certain healthcare practitioners’ ability to treat or accept new patients. The law applies to physicians, osteopaths, nurse anesthetists, nurse practitioners, and physician assistants. Noncompete agreements may still be enforced if they are one year or less in duration and the healthcare provider voluntarily resigns. However, any noncompete becomes void if the practitioner is terminated, even for cause. The law also allows employers to recover certain costs—such as relocation, training, or patient development expenses—incurred within three years before a voluntary departure. Noncompetes tied to the sale or transfer of a healthcare business remain enforceable if the practitioner is a party to the transaction.

Employers must notify patients within 90 days when a provider with whom they had an ongoing relationship (at least two years) leaves the practice. The notice must include the provider’s departure, information on transferring records, and the option to continue care with a new provider at the same facility.

Washington

Washington raises 2025 thresholds for enforceable noncompetes to $123,394 (employees) and $308,485 (contractors).

Next Steps for Employers

Employers operating in the above states should carefully review any upcoming contract renewals or updates to avoid unintentionally replacing enforceable agreements with ones that are now void. For assistance, please contact one of Honigman’s Labor and Employment Attorneys here.