Senate committee advances bill banning most noncompete agreements, exempts business sales and certain professionals

Senate File 107, which would void most employer-employee noncompete agreements entered on or after July 1, 2025, was advanced by the Senate Judiciary Committee following a lengthy policy debate and public testimony.

"Any covenant not to compete that restricts the right of any person to receive compensation for performance of skilled or unskilled labor shall be void," Majority Floor Leader Senator Nethercott told the committee as he described the bill. The draft includes several explicit exceptions: covenants in contracts for the sale of a business or business assets; protection for trade secrets; contractual recovery for employee training or education expenses limited to less than two years; and noncompete provisions for executive and management personnel.

The bill contains a physician-specific provision that would void any covenant preventing a physician from practicing medicine after the termination of employment, partnership, or corporate affiliation, while maintaining other enforceable contract provisions. The draft preserves narrow nonsolicitation rights for physicians in rare-disease situations to allow continuity of care where alternatives are unlikely.

Senator Nethercott described statewide litigation that has reached the Wyoming Supreme Court and said noncompetes have had the effect of restricting competition and continuity of care, particularly in rural areas. "These noncompetes ... prohibit employees from working in their occupation within their own communities," he said, citing cases involving home health aides, sales personnel and physicians.

A small-business owner, Joey Carrante, testified in support of the bill, saying noncompetes can reach far beyond high-wage professionals to bar essential service providers — from barbers to digital-media contractors — from working in their communities. Carrante also asked the committee to consider whether partnership buyouts and dissolutions are adequately covered by the draft.

Committee members discussed the scope of the physician provisions and whether the Medical Practice Act definitions might cover other health-care professionals. Senator Nethercott said the physician carve-out is deliberate: "We're saying you can't do that anymore, physicians. UR services are too important to your patients to do this. If you want some other financial penalty associated with leaving the partnership, that's fine. Go ahead and do that. But it cannot concern the prohibition of the ability to practice medicine."

The measure applies to contracts entered on or after July 1, 2025; contracts made before that date would remain enforceable. The committee approved Senate File 107 by roll call (recorded as four ayes, one excused). The motion to move the bill was made by Senator Crago. Committee members noted the bill originated from a prior joint judiciary committee interim draft and has been revised after public discussion.

Votes at a glance: Senate File 107 moved from committee to the floor by a 4–0 vote (1 excused).

Background: The sponsor cited multiple Wyoming Supreme Court decisions and national policy debates, and referenced an earlier FTC rulemaking effort that had created uncertainty in this area.

Implementation: The bill's effective date is July 1, 2025, and it preserves previously executed noncompete agreements signed before that date.