Allowed if reasonable

Non-compete law in Vermont

Vermont has no general noncompete statute; employee covenants are governed by judge-made reasonableness law. For health care providers, new 21 V.S.A. 495q (Act 177 of 2026, enacted with S.313; applies to contracts entered into on or after July 1, 2026) voids post-termination restrictions on providing health care services, limits on notifying patients of a job change, non-disparagement limits, inconsistent-with-Vermont-law terms and out-of-state litigation clauses. General noncompete bans (H.205, 2026) stalled in committee and S.230, which carried noncompete language, was vetoed on 2026-06-18.

Last verified · confidence medium. Clauseworthy is not a law firm and does not give legal advice.

Employee non-competes
Not banned; conditions apply
Pay floor
None in the statute
Duration
No statutory cap for non-health-care workers; common-law reasonableness (no statute to cite).

Exceptions and special rules

  • For health care providers: restrictions limiting a provider who contracts with a third-party company for nonclinical business-support services from opening a business within a territory supported by a different third-party company are not voided (21 V.S.A. 495q(c))
  • Health care provider (person licensed, certified or authorized by law to provide professional health care service in Vermont). Any provision in a contract establishing a partnership, employment or other professional relationship regarding the provider's health care services in Vermont is void and unenforceable if it (1) restricts providing health care services in any geographic area for any time after the relationship ends, (2) limits the separating provider's ability to notify individuals they directly served of the change of employment (notice may state continued practice, new contact information and the recipient's right to choose a provider), (3) bars disparaging statements about another party or specified third-party beneficiary, (4) is inconsistent with Vermont law, or (5) requires litigation arising in Vermont to be conducted in another state. Employer may not retaliate against an employee who exercises rights; 21 V.S.A. 495(a)(8) and 495b penalty/enforcement provisions apply. Applies to contracts entered into on or after 2026-07-01. (21 V.S.A. 495q, added by 2026 Act 177 (S.313) s. 8e (text read from the House proposal of amendment; final text not read))

Contracts naming another state's law

Health care providers only: a clause requiring litigation arising from performance in Vermont to occur in another state is void (21 V.S.A. 495q(a)(5)).

Remedies

Health care providers: anti-retaliation protection and the penalty/enforcement provisions of 21 V.S.A. 495b apply (495q(e)). Nothing general for other workers.

Which agreements it covers

495q applies to contracts and agreements entered into on or after 2026-07-01 (495q(f)); act effective on passage (Sec. 9; signed 2026-06-18). 2026-07-01 (health care providers only)

Recent changes

  • 2026-06-18. Governor signed S.313 (Act 177, career technical education) containing new 21 V.S.A. 495q on health care provider agreements, effective on passage, applying to contracts from 2026-07-01. The status page shows no Senate amendment to the House proposal, so the House text is read as the enacted text (inference). Source
  • 2026-06-18. Governor vetoed S.230 (fair employment practices); its noncompete provisions (health care) were reportedly moved into S.313. No override recorded. Source
  • 2026-03-13. H.205 (agreements not to compete: ban for franchisees and employees, $100,000 wage threshold in the introduced version per BillTrack50's summary) was recommitted to House Commerce and Economic Development; BillTrack50 lists it 'Dead' 2026-05-29 (secondary). Source

Primary sources

Secondary sources

Commentary and trackers used only to find the primary text. None of them is the statute, and none is cited for what the statute says.

Checker

What the statute says for these facts

Four facts. The answer leads with what the statute does at that pay, then names any change already enacted, then quotes the details with their citations.

The person who would sign

Several statutes treat contractors differently.

Other states on file