Key Points

• President Biden’s July 9, 2021 executive order encouraged the FTC to exercise its statutory rulemaking authority to curtail the unfair use of noncompete agreements.
• Effective March 1, 2022, a person who violates Colorado’s noncompete statute commits a class 2 misdemeanor.
• Sweeping changes to the Illinois Freedom to Work Act took effect on January 1, 2022, and, among other things, prohibit noncompete covenants with employees earning $75,000 or less per year and nonsolicitation covenants with employees earning $45,000 or less per year.
• Effective October 1, 2021, Nevada’s amended noncompete statute bans noncompete agreements with hourly wage employees and requires employers to pay an employee’s reasonable attorney’s fees if a noncompete agreement violates certain statutory restrictions.
• Noncompete agreements entered into in Oregon on or after January 1, 2022 cannot exceed 12 months in duration and cannot be enforced against an employee whose gross salary and commissions at termination do not exceed $100,533, adjusted annually for inflation, unless the employer agrees in writing to compensate the employee during the post-employment restricted period in accordance with the statute.
• Unless amended, Washington, D.C.’s new Ban on Non-Compete Agreements Amendment Act of 2020 will invalidate most noncompete provisions entered into with D.C. employees on or after April 1, 2022.

Federal and state efforts to limit the use of employee noncompete agreements have gained...

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