Many employers have long used noncompetition agreements, or
noncompetes, as an important tool for preventing former employees
from unfairly competing against them. Although only a few states
outright ban noncompetes with employees,1 most states
permit employers to use noncompetes as long as they are reasonable
and limited to protecting the employer's legitimate interests.
In recent years, however, state legislatures have increasingly
begun chipping away at the power of noncompetes by passing laws
limiting the scope of those agreements. And many other states are
considering similar restrictions.
An Overview of Recent Changes
In the last several years, many states, including California,
Idaho, Illinois, Nevada, New Mexico Massachusetts, and Washington,
have enacted laws restricting the use of employee noncompetes.
Although the types of restrictions vary by state, those limitations
generally include:
