Updated January 18, 2023
A Wyoming non-compete agreement is a contract that allows an employer to limit an employee from engaging in the same business. The non-compete period begins after the employee is no longer is employed. The duration can be up to 1 year and for a specific geographical area.
Laws
Legally Enforceable?
Yes, a contract for a non-compete is legal in Wyoming if it is:
- In writing;
- Part of a contract of employment;
- Based on reasonable consideration;
- Reasonable in duration and geographical limitations; and
- Not against public policy.
Source: CBM Geosolutions Inc. v. Gas Sensing Technology Corp. (2009)
Attorneys (prohibited)
An attorney is prohibited from entering into a non-compete or any agreement restricting their right to practice law in Wyoming.
Source: Rule 5.6
Continued Employment
If an employer requests an employee sign a non-compete while already employed, the promise of continued employment does not constitute sufficient consideration. An employee must give “separate contemporaneous consideration.”
Source: Jennifer Brown v. Best Home Health & Hospice LLC (2021)
What is “Reasonableness?”
An employer is “entitled to reasonable protection from irreparable harm” through a non-compete. Although, it cannot inflict unreasonable harm on the employee or public policy.
The court will decide to balance the following in regard to reasonableness:
- Degree of inequality in bargaining power;
- Risk of the employer losing customers;
- Respective participation by the parties in securing and retaining customers;
- the good faith of the employer;
- Existence of sources or general knowledge pertaining to the identity of customers;
- Nature and extent of the position held by the employee;
- Employee’s training, health, education, and needs of their family;
- Current employment conditions;
- The necessity of the employee changing their calling or residence; and
- The correspondence of the restraint with the need for protecting the legitimate interests of the employer.
Source: Philip G. Johnson & Co. v. Salmen (1992)
Maximum Term
Any period of non-compete beyond 1 year is deemed to be unreasonable. (Hopper v. All Pet Animal Clinic, Inc. (1993))
The court has no set parameters for territory, but 35 miles was deemed reasonable. (Beckman v. Cox Broadcasting Corp. (1982))
Blue Penciling
The Wyoming Supreme Court, in a recent decision on February 22, 2022, made a judgment to no longer modify otherwise unenforceable or unreasonable non-compete agreements.