Bill > H0205

This bill prohibits noncompete agreements for both franchisees and employees in Vermont, rendering such agreements void and unenforceable. For franchisees, the bill defines a noncompete agreement as any restriction that limits a franchisee's ability to operate a business after separating from a franchisor, with exceptions for protecting trade secrets and confidential business information. For employees, the bill similarly invalidates agreements that restrict an employee's ability to work for another employer in terms of time, geography, or capacity, while maintaining some specific exceptions. The bill allows noncompete agreements in limited circumstances, such as during business sales, partnership dissolutions, or severance agreements, and includes a wage threshold exemption for employees earning $100,000 or more annually. Employers and franchisors are required to provide written notice to existing parties informing them that their noncompete agreements are legally unenforceable. For employees, the bill mandates that any noncompete agreement must be presented at the time of a job offer, with a three-day window for review, and includes protections against employer retaliation. The legislation is set to take effect on July 1, 2025, giving businesses time to adapt to the new restrictions.

Business and Industry

https://legislature.vermont.gov/bill/status/2026/H.205