Updated February 29, 2024
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:[1]
- In writing;
- Part of a contract of employment;
- Based on reasonable consideration;
- Reasonable in duration and geographical limitations; and
- Not against public policy.
Attorneys (prohibited)
An attorney is prohibited from entering into a non-compete or any agreement restricting their right to practice law in Wyoming.[2]
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.”[3]
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:[4]
- 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.
Maximum Term
Any period of non-compete beyond 1 year is deemed to be unreasonable.[5]
The court has no set parameters for territory, but 35 miles was deemed reasonable.[6]
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.[7]