The Economic Innovation Group, a bipartisan public policy organization, has compiled a summary of where noncompetes stand by state. It categorizes each ban into one of four categories relevant to healthcare:
1. Full ban: this means that states do not allow any noncompete agreements in an employment contracts, but may have exceptions for the dissolution of a partnership or the goodwill sale of a business.”
2. Income ban: States use an income threshold to determine which employees may be subject to noncompetes or may have additional restrictions.
3. Healthcare industry bans: These bans specifically eliminate noncompetes for certain types of healthcare workers.
4. Other bills: This may include changes or clarifications to the legal basis for a noncompete, the definition of a noncompete agreement or processes that employers must complete to enforce a noncompete.
Here is a state-by-state breakdown of noncompete legislation:
Alabama
- Current Law: Allows noncompetes with reasonable limitations.
- Healthcare Exemptions: None.
Alaska
- Current Law: Permits noncompetes if they are reasonable in scope and duration.
- Healthcare Exemptions: None.
Arizona
- Current Law: Enforces noncompetes that are reasonable and protect legitimate business interests.
- Healthcare Exemptions: None.
Arkansas
- Current Law: Allows noncompetes with reasonable restrictions.
- Healthcare Exemptions: None.
California
- Current Law: Full ban on noncompete agreements in employment contexts.
- 2024 Legislation: Senate Bill 699 reinforced the ban on noncompetes, effective Jan. 1, 2024.
- Healthcare Exemptions: The ban applies universally, including to healthcare professionals.
Colorado
- Current Law: Prohibits noncompetes except for executive/management personnel and professional staff.
- 2024 Legislation: Amended noncompete law effective Aug. 7, 2024.
- Healthcare Exemptions: None.
Connecticut
- Current Law: Allows noncompetes with reasonable limitations; specific restrictions for physicians.
- Healthcare Exemptions: Physicians have specific limitations on noncompete agreements.
Delaware
- Current Law: Permits noncompetes if reasonable in scope and duration; voids noncompetes for physicians.
- Healthcare Exemptions: Physicians are exempt from noncompetes.
Florida
- Current Law: Enforces noncompetes that are reasonable in time, area, and line of business.
- Healthcare Exemptions: None.
Georgia
- Current Law: Allows noncompetes with reasonable restrictions.
- Healthcare Exemptions: None.
Hawaii
- Current Law: Bans noncompetes for technology sector employees.
- Healthcare Exemptions: None.
Idaho
- Current Law: Permits noncompetes with reasonable limitations.
- Healthcare Exemptions: None.
Illinois
- Current Law: Prohibits noncompetes for employees earning less than $75,000 annually.
- Healthcare Exemptions: None.
Indiana
- Current Law: Allows noncompetes with reasonable restrictions.
- Healthcare Exemptions: None.
Iowa
- Current Law: Permits noncompetes if they are reasonable in scope and duration.
- Healthcare Exemptions: None.
Kansas
- Current Law: Allows noncompetes with reasonable limitations.
- Healthcare Exemptions: None.
Kentucky
- Current Law: Enforces noncompetes that are reasonable in time and scope.
- Healthcare Exemptions: None.
Louisiana
- Current Law: Permits noncompetes in specific parishes or municipalities where the employer operates.
- Healthcare Exemptions: None.
Maine
- Current Law: Prohibits noncompetes for employees earning at or below 400% of the federal poverty level.
- Healthcare Exemptions: None.
Maryland
- Current Law: Bans noncompetes for employees earning less than or equal to $15/hour or $31,200 annually.
- Healthcare Exemptions: None.
Massachusetts
- Current Law: Requires noncompetes to be reasonable; provides “garden leave” compensation.
- Healthcare Exemptions: None.
Michigan
- Current Law: Allows noncompetes with reasonable limitations.
- Healthcare Exemptions: None.
Minnesota
- Current Law: Full ban on noncompete agreements in employment contexts.
- Healthcare Exemptions: Ban applies universally, including to healthcare professionals.
Mississippi
- Current Law: Permits noncompetes if they are reasonable in scope and duration.
- Healthcare Exemptions: None.
Missouri
- Current Law: Allows noncompetes with reasonable restrictions.
- Healthcare Exemptions: None.
Montana
- Current Law: Permits noncompetes if they are reasonable in scope and duration.
- Healthcare Exemptions: None.
Nebraska
- Current Law: Limits noncompetes to protecting goodwill and confidential information.
- Healthcare Exemptions: None.
Nevada
- Current Law: Prohibits noncompetes for hourly employees.
- Healthcare Exemptions: None.
New Hampshire
- Current Law: Requires employers to provide a noncompete agreement copy before employment offer.
- Healthcare Exemptions: None.
New Jersey
- Current Law: Allows noncompetes with reasonable limitations.
- Healthcare Exemptions: None.
New Mexico
- Current Law: Bans noncompetes for healthcare practitioners.
- Healthcare Exemptions: Healthcare practitioners are exempt from noncompetes.
New York
- Current Law: Permits noncompetes if they are reasonable in scope and duration.
- Healthcare Exemptions: None.
North Carolina
- Current Law: Enforces noncompetes that are reasonable in time and scope.
- Healthcare Exemptions: None.
North Dakota
- Current Law: Full ban on noncompete agreements in employment contexts.
- Healthcare Exemptions: Ban applies universally, including to healthcare professionals.
Ohio
- Current Law: Allows noncompetes with reasonable restrictions.
- Healthcare Exemptions: None.
Oklahoma
- Current Law: Full ban on noncompete agreements in employment contexts.
- Healthcare Exemptions: Ban applies universally, including to healthcare professionals.
Oregon
- Current Law: Prohibits noncompetes longer than 12 months; bans noncompetes for low-wage employees.
- Healthcare Exemptions: Low-wage employees are exempt.
Pennsylvania
- Current Law: Allows noncompetes with reasonable limitations.
- Healthcare Exemptions: None.
Rhode Island
- Current Law: Prohibits noncompetes for non-exempt employees, minors, and certain student interns.
- Healthcare Exemptions: Exemption for low-wage workers and specific healthcare roles.
South Carolina
- Current Law: Allows noncompetes with reasonable limitations.
- Healthcare Exemptions: None.
South Dakota
- Current Law: Permits noncompetes if they are reasonable in scope and duration.
- Healthcare Exemptions: None.
Tennessee
- Current Law: Prohibits noncompetes for physicians.
- Healthcare Exemptions: Physicians are exempt from noncompetes.
Texas
- Current Law: Permits noncompetes if they are reasonable and provide consideration to employees.
- Healthcare Exemptions: None.
Utah
- Current Law: Limits noncompetes to one year; bans noncompetes for employees earning below a threshold.
- Healthcare Exemptions: None.
Vermont
- Current Law: Permits noncompetes if they are reasonable.
- Healthcare Exemptions: None.
Virginia
- Current Law: Prohibits noncompetes for low-wage employees.
- Healthcare Exemptions: None.
Washington
- Current Law: Limits noncompetes to employees earning more than $100,000 annually.
- Healthcare Exemptions: None.
West Virginia
- Current Law: Allows noncompetes with reasonable limitations.
- Healthcare Exemptions: None.
Wisconsin
- Current Law: Permits noncompetes if they are reasonable in scope and duration.
- Healthcare Exemptions: None.
Wyoming
- Current Law: Allows noncompetes with reasonable limitations.
- Healthcare Exemptions: None.