U.S. States Grapple With Workplace Noncompetes

At every veterinary practice where she’s ever worked, a doctor we’ll call Mary Smith has been compelled to accept a noncompetition agreement as a condition of hire. From the veterinarian’s experience with six employers and in talking to colleagues, she’s found noncompetes to be a non-negotiable constant in the profession.

“It’s always been something that I have hated, but it has just been the price of admission for being a vet that practices in America,” she said.

Mary Smith is not the veterinarian’s real name. She asked not to be identified in order to express her views candidly without antagonizing her current employer because, of course, her contract with them includes a noncompete—a clause that would prevent her, if she quit, from taking another job within 10 miles of her former workplace for 18 months.

By this time next year, though, and for the first time in nearly two decades, the veterinarian no longer will be held to such a restriction. That’s because she works in Washington state, where a law passed this spring will void virtually all existing employee noncompete agreements and make new ones illegal as of June 30, 2027.

Washington is the fifth state to broadly ban the workplace restrictions. The others are California, Minnesota, North Dakota, and Oklahoma.

Three more states prohibit them for veterinarians explicitly. They are Maine (since 2023, for those who do not have ownership in the business), Maryland (since 2024), and Utah. Utah’s law passed this spring and took effect on May 6. It does not apply retroactively, so agreements signed earlier still stand. The Utah statute also permits noncompetes for veterinarians who have 5% or greater ownership in the business.

The laws in Utah and Washington are among 17 adopted this year in 11 states, according to faircompetitionlaw.com, a website maintained by a legal firm in Boston that tracks noncompete policies.

For the most part, the latest laws limit employee noncompetes to some degree—albeit at times very modestly. For example, a new prohibition in Iowa applies only to healthcare providers at University of Iowa-affiliated hospitals and clinics, specifically physicians, physician assistants, pharmacists, and three categories of nurses. (An earlier Iowa law bans noncompetes for some other healthcare providers, such as mental health workers.)

Some of the latest legislative activity was spurred by the inability of the United States Federal Trade Commission to institute a nationwide ban on noncompetes. The agency issued a final rule in 2024, but before it went into effect, a federal district court set the rule aside.

Citing the stymied FTC rule, the Washington law states that workers and businesses in Washington need not wait for a federal ban “when the state has the authority to extend these protections.”

States were weighing in on noncompetes long before the FTC proposal went down, however. Russell Beck, the lawyer who created the faircompetitionlaw.com tracker, points to what he calls “the Jimmy John’s debacle” as a watershed in 2014. That year, The Huffington Post broke the news that the sandwich chain was holding its low-wage workers to noncompetes—restrictions that are more commonly understood to apply to, and generally better accepted for, employees who have insider knowledge of a business, like managers and executives.

Today, many states prohibit noncompetes for rank-and-file workers. Dr. Lance Roasa, a veterinarian and lawyer who follows noncompete policy in the veterinary profession, sees most laws landing broadly into one of two categories, neither of which typically applies to veterinarians.

The first protects workers below a certain pay level. For example, Roasa said, the current threshold is $70,000 in Tennessee and $75,000 in Illinois. He noted that most full-time veterinarians earn more than that, making the laws moot for them.

The second category growing in popularity is noncompete bans for healthcare providers, such as physicians and nurses. “We commonly get questions asking if veterinarians are included in healthcare workers, and generally, they are not,” Roasa said. Only in Maine, Maryland, and Utah are veterinarians specified in legislation that limits noncompetes for select occupations.

Noncompete watchers consider the workplace restrictions to apply to veterinarians in Alabama, as well. There, according to a tracker maintained by the Economic Innovation Group, a public policy organization, the law “exempt[s] certain professionals from noncompetes, but the definition of ‘professionals’ has been left up to the courts,” which have interpreted the classification to include veterinarians—specifically, their practice of veterinary medicine.

Not all state laws on noncompetes curtail them. Last year, passage in Florida of a bill dubbed the CHOICE Act made that state into what one Miami law firm called “the most employer-favorable non-compete regime in the country.” The Florida statute allows noncompetes that last as long as four years for an employee who earns more than twice the annual mean wage in their employer’s county or, if the employer is based outside the state, in the county where the employee lives.

Notwithstanding Florida, a politically conservative state, doing away with employee noncompete covenants has support across political parties, according to Sam Peak, labor and mobility policy manager at the Economic Innovation Group, which favors eliminating their use.

“It’s not just a drag on wages but also a drag on job creation and innovation in general,” Peak said.

For evidence of support in conservative states, he pointed to Utah, which this year adopted two laws banning noncompetes—the one for veterinarians and another for other healthcare practitioners. A third bill banning noncompetes for all workers paid less than $155,000 made it out of committee but not further.

Beck, the lawyer in Boston with expertise in business, trade secrets, and employee mobility, calls noncompetes “an overused but necessary tool.”

As an example of necessity in a veterinary context, Beck said that a clinic could be harmed if pet owners follow a favorite veterinarian who, unrestrained by a noncompete, leaves to take a job at a practice down the street. Even if the veterinarian is prevented by a nonsolicitation agreement from encouraging pet owners to follow, Beck said, pet owners might follow of their own accord.

“The noncompete says, ‘We paid you to develop those relationships. We don’t want the customers to be confused by that and to follow you because they associate you with the good service, but it’s not just you [that served them], it’s the whole structure behind you,’ ” he said.

A Battle Over Jurisdiction

In the absence of a uniform national approach, state policy can make a big difference in how a noncompete is handled when a dispute arises.

A question of jurisdiction was at the center of a recent court case, Jon M. Fletcher, DVM v. MedVet Associates, LLC. Fletcher is an internal medicine specialist who worked remotely from his home in Louisiana for MedVet, a national practice group headquartered in Ohio. Fletcher’s role was director of postgraduate medical education and director of clinical studies. When hired in 2019, he signed an agreement that restricted him for a year from working for a competitor anywhere in North America.

That agreement sparked tense communications this January when Fletcher gave notice in order to take a job with another U.S.-based practice group. The doctor ended up filing a suit in U.S. District Court for the Middle District of Louisiana, arguing that his MedVet noncompete violated Louisiana’s position that such agreements must specify the affected parishes or municipalities in the state.

MedVet countered that the law in Ohio, where the company is based, should apply.

Fletcher prevailed. In a ruling on May 15, Chief District Judge Shelly D. Dick stated that applying Ohio law would permit employers “to impose extraordinarily broader non-compete and non-solicit restrictions on employees, such as nationwide geographical limitations … in direct contravention of Louisiana’s strong public policy” to restrict noncompetes.

The VIN News Service asked MedVet whether the outcome of the case has influenced how it crafts noncompetes. The company’s chief financial officer, Dain Bussewitz, provided this response by email: “The Fletcher case involved an agreement covering his national leadership responsibilities in veterinary recruiting and training. It did not restrict Dr. Fletcher’s ability to practice veterinary medicine or his specialty anywhere in the country.”

The statement adds that MedVet noncompete agreements with practicing veterinarians, by comparison, “are tailored to their work locations and are not national in scope.”

Roasa, the veterinarian and lawyer who follows noncompetes, called the case a “one-off … for a very unique nonclinical position.” As such, he said, it doesn’t indicate how courts might treat the more common noncompetes that are required of veterinarians in clinical practice.

Imagining a Different Workplace Culture

The veterinarian in Washington who, along with all other workers in the state, will be released from her noncompete next summer, has never been an employer. But she can understand why employers want to protect their trade secrets and client base. Toward that end, she believes, nondisclosure and nonsolicitation agreements serve the purpose. A noncompete, in her view, is simply punitive.

“A nonsolicitation is designed to help protect the company. A noncompete is designed to harm the employee, is my take,” she said.

The veterinarian said she loves her job and has no intention of leaving, but she will be relieved when noncompetes no longer are allowed where she lives.

“I really firmly believe these are a bad idea,” she said. “I mean, if you have to tether someone to your physical building because that’s the only way that you can be sure that someone’s going to want to stay there, you’re doing something wrong.”

Instead, she suggested, “Make the position so great that no one wants to leave. Or have such a healthy work environment that when your employees do move on to other things, you’re genuinely happy for them, as opposed to, you know, ‘We want to keep you here even if you don’t want to be here. And we’re going to make it so that you can’t leave. And we don’t care if you’re not happy’—which is effectively the message that a noncompete sends.”

In Brief

• States continue a yearslong trend in legislating workplace noncompetition agreements, for the most part placing limits on their use—some sweeping, some modest.
• Laws adopted this year in Washington and Utah free veterinarians from the employer restrictions, which prevent employees who leave their jobs from taking new jobs within a certain distance of their former workplace for a certain period of time.
• In Washington, all workplace noncompetes, including ones already in place, will be void effective June 30, 2027. In Utah, as of May 6, new noncompetes were no longer allowed for veterinarians except those with 5% or greater ownership in the business.
• A total of five states ban noncompetes for all workers: California, Minnesota, North Dakota, Oklahoma and, as of next year, Washington. Four more do not allow noncompetes for veterinarians. They are Alabama, Maine, Maryland, and Utah.

This article originally appeared on the VIN News Service website. The VIN News Service is not affiliated with Equimanagement.

Related Reading

• Business Briefs: The Changing Landscape of Noncompetes
• Staying Ahead of the Curve: Navigating Legislation Affecting the Veterinary Profession
• Early Career Insights: Understanding Your First Employment Contract

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