Wyoming non-compete law

As reflected in the Wyoming Supreme Court's recent decision in CBM Geosolutions v. Gas Sensing Technology Corp, Wyoming's law on non-competes differs substantially from Colorado's. 

Colorado has adopted a statute which voids any non-compete unless it falls within one of the four designated exceptions.  Every case, as a result, begins with an analysis of whether the non-compete falls within one of the exceptions. If the non-compete does not, the non-compete can not be enforced and there is no need to evaluate whether the non-compete's duration and area are reasonable.

In Wyoming, on the other hand, no such statute has been adopted. There is no discussion, as there is in Colorado cases, of whether a non-compete falls within the definition of statutory terms. There are no cases, for example, about whether a non-compete was entered by someone who falls within the definition of "executive and management personnel".

There are a few preliminary hurdles to consider in Wyoming, including whether consideration exists and whether the non-compete was in writing. If these hurdles are surmounted, as they are in most cases, the remaining analysis revolves around whether the non-compete is "reasonable". As in most if not all states, this reasonableness analysis requires consideration of the duration and geographic area of the non-compete.

Reasonableness in Wyoming, however, also requires consideration of a series of other factors. These factors include  the degree in inequality in bargaining power, the risk of the business losing customers, the good faith of the employee, knowledge related to the identity of customers, the employee's position with the business, the employee's training, education and the "needs of his family", the current conditions of employment and the need to protect the legitimate interests of the business. This part of the reasonableness analysis allows a court to consider virtually any factor that might be important under the individual facts presented by a case.  

In short, the two states have adopted different approaches to non-competes. Whether the different approaches result in different decisions may be addressed in future blog posts. For a party subject to a non-compete in either state, however, it is important to recognize that different approaches have been adopted and that the different approaches may mean that different strategies are required. 

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