Nelson Mullins is continuously monitoring trends and state law changes regarding restrictive covenants in employment agreements. Several states have recently enacted or modified legislation that may significantly restrict an employer’s ability to regulate their former employees’ post-employment activities. Likewise, several other states are considering legislation that would significantly alter the application and enforceability of non-competes. The information below provides a non-exhaustive summary of important current and prospective changes to state non-compete and restrictive covenants laws that employers should further consider with the assistance of counsel.
Recently Enacted State Law on Restrictive Covenants
In July 2021, a Colorado bill concerning misdemeanor reform was signed into law. Embedded in this bill was an amendment to Colorado’s existing non-compete statute categorizing a violation of it as a class 2 misdemeanor.