A Wyoming Non-Compete Agreement is an employment contract that prevents employees from taking a job with a competitor.
Employers often seek to enter into non-compete agreements with employees to prevent them from jumping ship to a competitor or setting up a rival business after leaving work.
Reasonable Uses and Objections
- Enforceable when terminated without cause? – Yes.
- Employee non-solicitation agreement permitted? – Not decided.
- Customer non-solicitation agreements permitted? – Not decided.
- Does continuing employment equal sufficient consideration? – No.
- Statute of Limitations for breach of contract: 10 years.
Legally Enforceable in Wyoming?
Wyoming courts have ruled that a business may use non-compete agreements to protect itself from “improper and unfair competition by an employee.” However, the courts will not protect a business from “ordinary competition.”
Non-compete agreements are not favored in Wyoming. In Brown v. Best Care Home Health Hospice LLC, 491 P.3d 1021 (Wyo., 2021), the Wyoming Supreme Court held that non-competition agreements are “prima facie invalid” and that it is the burden of the employer to prove that there are “some special circumstances which rendered it reasonably necessary for the protection of the [employer’s] business.”
As a practical matter, the employer must draft any non-compete agreement quite narrowly to protect business interests without placing too heavy a burden upon the employee to change jobs and seek work.
To be enforceable, any non-compete agreement must be:
- (1) in writing;
- (2) part of a contract of employment;
- (3) based on reasonable consideration;
- (4) reasonable in duration and geographical limitations;
- (5) “not against public policy” and
- (6) no more significant than “necessary to protect the employer’s legitimate business interests.
What Can Be Protected?
In Wyoming, a non-compete agreement can be used to protect trade secrets and confidential information. It can also protect the business from the extraordinary influence of the employee over customers to the extent gained during employment.
Time Limitations
Wyoming courts will scrutinize the terms of a non-compete agreement to ensure it is reasonable as to its time duration.
Geographical Limitations
Courts will examine the terms of a non-compete agreement to ensure the geographical restriction is reasonable. A small geographical coverage for the agreement is more likely to be upheld than a wider area.
Other Limitations
The Wyoming Supreme Court recently ruled that agreements containing invalid provisions could not be redrafted or re-construed by the trial court to make them valid. This so-called “blue pencil” rule was occasionally used to save an agreement with several valid provisions but only a few defective ones. [1]
The Wyoming General Assembly considered legislation to ban non-compete agreements altogether. This bill failed in the Wyoming House of Representatives in 2022 but may return in future legislative sessions.
Sample
Below, you can download a Wyoming non-compete agreement template in PDF or Word format:
