Jessica Mendelson and Emily J. Stover served as Editors for this publication, Shera Y. Kwak and Aja Nunn served as Assistant Editors, and Rosemary M. Soliz served as Editorial Assistant.
Contributors to this publication include: MacKenna Alvarez, Yoon Cho, Kaveh Dabashi, Madalyn Doucet, David R. Gobel, Matthew L. Honig, Alex Kargher, Lauren Kazen, Nyssa Leonardi, Josh Lopez, Boris Lubarsky, Vanna Mavromatis, Candace Polster, Devonae Robinson, Joshua Salinas, Remy Snead, Nicole Tackabery, and Nicole K. Wong.
Introduction
2025 saw a continuing trend of pending noncompete bills proposed across over 30 states nationwide. Many of the pending bills continue to propose applying limitations around healthcare workers or providing or implementing wage thresholds for certain professionals or low-wage workers. Most recently, Washington state’s chambers of the Legislature approved Engrossed Substitute House Bill (ESHB) 1155, which would prohibit the use of nearly all noncompetes in Washington state. Governor Bob Ferguson signed this bill on March 23, 2026.
Further, though the Federal Trade Commission’s (“FTC”) attempt to impose a nationwide ban on employee noncompete agreements is no more, we have continued to see federal regulatory actions and judicial scrutiny. The FTC issued a request in September 2025 for information on employee noncompete agreements, “to better understand the scope, prevalence, and effects of employer noncompete agreements, as well as to gather information to inform possible future enforcement actions.” Specifically, the FTC requested that “[m]embers of the public including current and former employees restricted by noncompete agreements, and employers facing hiring difficulties due to a rival’s noncompete agreements, are encouraged to share information about the use of noncompete agreements.” Additionally, many courts are continuing to express reluctance in enforcing post-employment restrictive covenants.
In light of these ongoing trends that show no signs of reversing, it is critical that businesses continue to stay current on both federal enforcement trends and state legislative changes. This Trade Secrets and Employee Mobility chapter provides an overview of the key developments for 2025, highlighting the implications and ongoing trends for businesses and practitioners.
First Circuit
In 2025, legislative activity in the First Circuit reflected continued efforts to further limit noncompete agreements broadly (S0302 in Rhode Island) and in specific sectors (healthcare in Rhode Island and New Hampshire, veterinarians in Massachusetts), though all of these attempts ultimately stalled short of passage. See S. 302, 2025 Gen. Assemb., Jan. Sess. (R.I. 2025); S. 703, 2025 Gen. Assemb., Jan. Sess. (R.I. 2025); H.B. 386, 2025 Gen. Ct. (N.H. 2025); S. 1366, 2025 Gen. Ct. (Mass. 2025). The advancement of S. 302 in Rhode Island—which passed the Senate but was never brought up in the House—is a notable attempt to revisit broad noncompete legislation that was previously vetoed by Governor Dan McKee in 2024.
There were also a number of cases out of the First Circuit this year, all from Massachusetts courts interpreting various aspects of the 2018 Massachusetts Noncompetition Agreement Act (MNAA). Massachusetts’ highest court confirmed that non-solicitation agreements are outside the scope of the MNAA. A state trial court upheld an employer’s garden leave clause and provided valuable guidance on how courts will apply the Act. And in two other cases, courts refused to enforce noncompete agreements for failing to comply with the highly technical requirements of the MNAA.
In Miele v. Foundation Medicine, Inc., 250 N.E.3d 294 (Mass. 2025), the Massachusetts Supreme Judicial Court (SJC) ruled that a forfeiture clause triggered by breach of a non‑solicitation agreement is not a “forfeiture for competition agreement” within the scope of the MNAA. Although the Act specifically excludes “covenants not to solicit,” the trial court issued a ruling in favor of the plaintiff-employee, finding the forfeiture provision was unenforceable under the Act. The SJC disagreed and explained that treating a non-solicitation clause differently because it contains a forfeiture mechanism would contradict the MNAA’s express exclusion of covenants not to solicit and render the statute “internally contradictory.”
In Misiaszek v. Korn Ferry, No. 2584CV01766 (Mass. Sup. Ct. July 29, 2025), the Massachusetts Superior Court sided with the employer, finding its garden leave clause enforceable under the MNAA’s requirement that a noncompete be supported by payment during the “entirety of the restricted period” and “except in the event of a breach by the employee [does] not permit the employer to unilaterally discontinue or otherwise fail or refuse to make the payments.” Mass. G. L. c. 149 § 24L(b)(vii). Korn Ferry’s noncompete provision provided that an employee would not compete for a six-month period after their employment ended, “provided that Korn Ferry continues to pay you your then existing base salary during that six-month time period.” The court found this conditional language consistent with the MNAA which “contemplates that an employer need not pay garden leave if it waives ‘the restriction upon post‑employment activities.’” The court also found the employer’s proffered legitimate business interest—the protection of confidential business information—a sufficient and protectable interest that could not be adequately protected by nondisclosure and non-solicit agreements.
In Warren v. Zapata Computing, Inc., 2025 WL 1556040 (D. Mass. June 2, 2025), a Massachusetts federal court held that an employer’s counterclaims based on violation of a noncompete provision failed because there was no evidence to establish that the employee was expressly informed of the right to consult legal counsel prior to signing the agreement. In Anaplan Parent LP v. Brennan, No. 2025-J-0685 (Mass. Sup. C. Oct. 7, 2025), a state court dealt another blow to an employer’s attempt to enforce a noncompete provision for failing to comply with a technicality: the parent company, rather than the subsidiary that directly employed the executive, had signed the agreement. The court imposed a narrow definition of the term “employer” under the MNAA and held the agreement was therefore unenforceable because it was not signed by the employer. Together, these cases illustrate the continued importance for Massachusetts employers to understand and comply with all requirements of the MNAA when drafting and implementing noncompete agreements.
Second Circuit
In 2025, the Second Circuit did not significantly change how courts address noncompete and trade secret litigation. On the legislative side, a New York bill (Senate Bill S4641) was introduced that would prohibit most noncompete agreements if passed and will likely be closely watched in 2026. The Southern District of New York issued two instructive rulings regarding the requisite level of specificity necessary to bring, and maintain, a trade secret action.
First, in Cartiga, LLC v. Aquino, the Court confirmed that the Second Circuit has not required that a trade secret be pled with a particular degree of specificity but must provide enough specificity to put a defendant on notice. No. 24 CIV. 1014, 2025 WL 388804, at *8 (S.D.N.Y. Feb. 4, 2025). In Cartiga, the Court denied defendant’s motion to dismiss plaintiff’s trade secret cause of action for failure to state a claim holding that a “plaintiff cannot get away with nebulous descriptions at the highest level of generality,” but that “‘a DTSA plaintiff has no obligation to reveal its secrets in the Complaint simply to prove that they exist.’” Id. (internal citation omitted). The Court found the plaintiff had sufficiently identified five categories of information which it plausibly alleged were trade secrets including the compilation of client information.
Second, in Hayden v. IBM, the Court granted defendant’s motion for summary judgment holding that plaintiff had failed to define alleged trade secrets with requisite specificity to identify a protectable trade secret. No. 21-CV-2485, 2025 WL 1697021 (S.D.N.Y. June 17, 2025). The Court found that plaintiff was inconsistent when identifying the purported trade secrets, failed to identify the individual elements of the trade secret, and how those components combined to form a trade secret. The Court noted that the numerous documents provided by plaintiff created a “moving target” due to the vague labels and high-level content. The Court concluded that even though this may have been a tactic to protect the trade secret from competitors, this tactic ultimately proved to be fatal to the misappropriation claims.
Third Circuit
On the legislative front, Pennsylvania’s Fair Contracting for Health Care Practitioners Act went into effect on January 1, 2025. The Act generally makes noncompete covenants entered into after the effective date void and unenforceable against “health care practitioners,” as defined by the Act. The Act has exceptions. Most notably, employers may enforce noncompetes if the duration is no more than one year and the employer did not cause the health care practitioner’s dismissal.
While New Jersey legislators continued to push two bills (Senate Bill No. 4385 and Assembly Bill No. 5708) that would ban most noncompete agreements in the state, neither passed before the 2025 legislative session ended. Both bills are expected to be reintroduced during the 2026 legislative session, likely with more momentum and support than in prior years.
Delaware does not have legislation addressing restrictive covenants, so case law continues to shape the landscape. Through its 2024 rulings in Cantor Fitzgerald, L.P. v. Ainslie, 312 A.3d 674 (Del. 2024) and LKQ Corp. v. Rutledge, 337 A.3d 1215 (Del. 2024), the Delaware Supreme Court upheld forfeiture-for-competition clauses and found that because they are not a restraint on trade, they do not need to meet Delaware’s reasonableness standards for enforcing restrictive covenants.
Pointing to the holdings in Ainslie and Rutledge, the plaintiffs in Fortiline, Inc. v. McCall, 341 A.3d 1027 (Del. Ch. 2025) argued that damages for breach of a restrictive covenant are akin to the loss of a supplemental benefit under a forfeiture-for-competition provision, and thus, if the remedy sought is money, rather than injunctive relief, the covenants should not be subject to review for reasonableness. The court rejected this argument. It explained that application of the reasonableness standards hinges “on what the provision demands of the employee, not what the company seeks as a remedy for its breach. If the provision restrains the employee from work, then reasonableness review kicks in. If it does not—if instead, for example, it allows the employer to retain a benefit the employee would otherwise receive—then courts must enforce that term as written.” Id. at 1033. The McCall court held that the plaintiffs were not entitled to any damages because the restrictive covenants were unreasonable and unenforceable.
Additionally, several 2025 decisions highlight enforcement issues that arise when equity or profit incentive agreements contain forfeiture clauses in addition to, and separate from, affirmative restrictions such as noncompetes. For example, in North American Fire Ultimate Holdings, LP v. Doorly, No. 2024-0023-KSJM, 2025 WL 736624 (Del. Ch. Mar. 7, 2025), the for-cause termination of the employee’s employment resulted in the automatic forfeiture of his incentive units. As a result, the Delaware Court of Chancery held that the employer had eliminated the sole consideration for restrictive covenants set forth in the incentive unit agreement, making them unenforceable. Similarly, in Payscale Inc. v. Norman, No. 2025-0118-BWD, 2025 WL 1622341 (Del. Ch. June 9, 2025), the Delaware Court of Chancery held that a noncompete provision set forth in a director-level employee’s incentive equity agreements was unenforceable. The court reasoned that even if the director’s forfeited equity had some value when the parties executed the incentive equity agreements, that consideration could not support the broad 18-month, nationwide noncompete.
Notably, the court in Payscale also declined to blue-pencil the noncompete. The refusal to blue‑pencil is consistent with other recent decisions from Delaware courts.
Fourth Circuit
Over the past year, states in the Fourth Circuit have sought to expand the protections available to employees against restrictive covenants through proposed legislation and case law. For example, the Fourth Circuit has narrowed the employees bound by noncompete agreements by imposing minimum income requirements and near-categorical exemptions for employees in certain fields. District courts similarly expressed reluctance to enforce restrictive covenants, suggesting convergence in legislative and judicial attitudes toward post-employment restrictive covenants.
There were several notable developments relating to state noncompete and non-solicitation laws.
- North Carolina introduced HB 269—the “Workers Freedom and Protection Act”—which would broadly prohibit employers from entering into, requiring, enforcing, or threatening to enforce noncompete agreements, including restrictions on employee mobility between franchise locations, for workers earning less than $75,000 annually.
- South Carolina introduced two bills: HB 3273, which would prohibit noncompete agreements between nonprofits and their employees—nullifying existing covenants for nonprofits with over $1 billion in gross revenue—and HB 4767, which would prohibit noncompete clauses in physician contracts.
- Maryland expanded its restriction on noncompete agreements, rendering them null and void for workers earning 150% or less of the state minimum wage and for veterinary practitioners and technicians. For licensed healthcare workers providing direct patient care who earn $350,000 or less, noncompete provisions are limited to one year in duration and a 10-mile radius from the primary place of employment.
- Effective July 1, 2025, Virginia expanded its ban on noncompetes with low-wage employees to include workers who earn less than the Commonwealth’s average weekly wage or who are entitled to overtime under the FLSA. See Va. Code. Ann. § 40.1-28.7:8.
There are a couple of interesting cases that have been decided in the Fourth Circuit in 2025. In Allegis Grp., Inc., et al. v. Bero, No. 23-2023, 2025 WL 2141298 (4th Cir. July 29, 2025), the Fourth Circuit affirmed summary judgment in favor of former employee Christopher Bero. The court held that Bero did not breach his non-solicitation agreement because his post-employment recruiting activities did not relate to the specific business area he had serviced while employed. Id. at *3. As a result, the employers could not show that his conduct fell within the scope of the contractual restriction. The court also rejected the nondisclosure claim, finding that Bero merely sent confidential information to himself and that there was no evidence he disclosed the information to any third party. Id. at *4. Without proof of external disclosure or misuse, the nondisclosure agreement could not support liability.
In Sysco Machinery Corp. v DCS USA Corp., 143 F.4th 222 (4th Cir. 2025), the Court articulated the pleading standards for trade secret claims under both the Defend Trade Secrets Act and North Carolina’s Trade Secrets Protection Act. The Court emphasized that a plaintiff must plausibly allege the existence of a protectable trade secret and facts showing misappropriation. Id. at 228. It further held that depositing technical drawings with the U.S. Copyright Office extinguished any trade secret protection in those materials. Id. at 229. The Court reiterated that misappropriation requires the acquisition, disclosure, or use of a trade secret by improper means or without the owner’s consent. Id. at 229.
Fifth Circuit
The Fifth Circuit saw some minor developments in the last year, with a few cases of note. In Worldvue Connect Global, L.L.C. v. Szuch, 155 F.4th 472 (5th Cir. 2025), the Fifth Circuit addressed the scope of a noncompete and non-solicitation provision that arose out of the sale of a business, and held that they covered both independent contractors employed by a third-party agency and employees who physically resided outside of the restricted area but provided services within the restricted area.
The provision at issue provided, in relevant part, that the defendants would not solicit its customers or “recruit, solicit, induct or attempt to induce, directly or indirectly, any of the employees or independent contractors of [Plaintiff] or any of its direct or indirect subsidiaries, to terminate their employment or contractual relationship with [Plaintiff] or any such subsidiary . . . .” The agreement also provided that the defendants could not engage in competitive business in the restricted area for one year.
At issue in the case was whether this provision applied to employees and contractors of the plaintiff who physically lived out of the restricted area but provided services to clients of the plaintiff in the restricted area, and whether it applied to customer service agents who provided services to the plaintiff in the restricted area but were employed by a third-party staffing company.
The defendants argued that the parties agreed that they would not solicit or compete “in” the restricted area, and that the provision should, therefore, not apply to remote workers who live and work outside the restricted area. According to the defendants, interpreting the provision to cover workers who did not live in the restricted area but provided services in that area would erase the contractual restricted area limitation.
The majority of the Fifth Circuit rejected that argument both because the plain language of the agreement confirmed this interpretation and because the evidence showed that the scope of the restriction was reasonable given the nature of the plaintiff’s business. The majority also rejected the argument that the non-solicitation provision did not apply to customer service agents who provided services to the plaintiff but were employed by a third-party staffing company. As the court noted, agreeing with the defendants’ argument “would exclude the customer service agents from the solicitation agreement entirely despite those agents performing essential work for the [plaintiff] in the operation of its business.” This would create an “unreasonable construction.”
Hon. James L. Dennis issued a dissenting opinion, but it did not deal with the substance of these conclusions. Instead, Circuit Judge Dennis took issue with a threshold point—whether there was a basis for injunctive relief at all. He felt that the District Court failed to assess this issue and improperly relied on a contractual provision which permitted the issuance of an injunction in the event the noncompete or non-solicitation provisions were violated.
In the trade secrete theft space, the Fifth Circuit once again confirmed that demonstrating the existence of a trade secret is essential to suing for theft of a trade secret. In DeWolff, Boberg & Associates Incorporated v. Pethick, 133 F.4th 448 (5th Cir. 2025), the Fifth Circuit affirmed an order granting summary judgment for the defendant as to a misappropriation claim due to Plaintiff’s failure to identify with specificity what information in its Salesforce Database was non-public, or distinguish between public and non-public information in that database. It also found that there was no evidence that the defendants used or disclosed any trade secrets, which also supported affirming the trial court’s ruling.
Finally, at the state court level, there was an interesting decision about the importance of drafting an enforceable noncompete agreement. In Allen & Smith Insurance Agency Inc. v. Merrill, No. 2023-CA-00468-COA, — So.3d –, 2025 WL 1441926 (Miss. Ct. App. May 20, 2025), the Court of Appeals of Mississippi affirmed a trial court ruling that struck the noncompete and non-solicitation provisions in an agreement between an insurance agent and their former employer on the grounds that they were so vague as to be unenforceable. Among other issues, the Court found the provisions internally inconsistent such that the defendant was placed in a “very uncertain position” when trying to determine their scope. As the Court of Appeals noted, “[t]he agreement’s terms should have been clear, unambiguous, and reasonable from the onset.” That the provisions at issue in this decision were not rendered them unreasonable and unenforceable.
Sixth Circuit
The past few years, the Sixth Circuit has reversed several district courts that disposed of trade secret claims as time-barred on summary judgment, allowing those claims to survive. In 2025, the Sixth Circuit ended its streak. In Cincom Systems, Inc. v. Labware, Inc., the Court agreed with the district court that the plaintiff’s former employee’s social media activity put the plaintiff on “inquiry notice” of misappropriation, thus starting the countdown for filing its complaint, which expired by the time of filing. No. 24-3726, 2025 WL 2742573, at *8 (6th Cir. Sept. 26, 2025). The limitations period begins running either when “the misappropriation is discovered or by the exercise of reasonable diligence should have been discovered.” Kehoe Component Sales Inc. v. Best Lighting Products, Inc., 796 F.3d 576, 582 (6th Cir. 2015). These decisions discuss when misappropriation “should” be discovered with reasonable diligence.
Let’s recap the previous decisions. In B&P Littleford v. Prescott Mach., LLC, the district court held that “B&P’s claim accrued no later than 2012 and was therefore time-barred,” citing a 2012 customer tip as when B&P should have discovered the misappropriation, and it granted summary judgment over the claim filed in 2018. No. 20-1449, 2021 WL 3732313, at *6 (6th Cir. Aug. 24, 2021). However, the Sixth Circuit reversed. Id. at *7. After the tip in 2012, B&P had inquired whether Prescott showed B&P’s drawings to other customers, and it submitted a criminal complaint to the FBI. Id. at *8. Although those efforts did not successfully yield additional evidence, the Sixth Circuit held that “a jury could find that B&P satisfied its obligation of conducting a reasonable investigation.” Id. In Campfield v. Safelite Group, Inc., the district court granted summary judgment that Safelite’s trade secret counterclaim was time-barred; Campfield had sent Safelite a letter in 2010 (outside the limitations period), listing materials to support Campfield’s Lanham Act claim, which Safelite would later allege had been misappropriated. 91 F.4th 401, 415 (6th Cir. 2024). According to the district court, the 2010 letter should have triggered a further investigation into Campfield’s alleged misappropriation. Id. The Sixth Circuit reversed, agreeing with Safelite that “[n]othing in the letter suggested that the information at Campfield’s disposal had been stolen,” and Safelite was not obligated to further investigate any potential misappropriation. Id. Last, in Metron Nutraceuticals, LLC v. Cook, the district court granted summary judgment that Metron’s claim was time-barred, reasoning that because Metron had filed a lawsuit in 2016 against Thomas (another co-defendant), Metron was obligated “to investigate further” at that time. No. 23-3596, 2024 WL 3877388, at *12 (6th Cir. 2024). The Sixth Circuit reversed, noting that the prior lawsuit against Thomas involved different operative facts, and that “the district court did not explain what investigative steps Metron should have taken” to discover the misappropriation at that time. Id. at *13.
We turn to 2025. In Cincom Systems, Inc. v. LabWare, Inc., the Sixth Circuit affirmed a district court’s award of summary judgment that trade secret misappropriation was time-barred. No. 24‑3726, 2025 WL 2742573 (6th Cir. 2025). In 2014, a former disgruntled Cincom employee posted on his personal blog that he was both joining defendant LabWare and working on “Smalltalk [virtual machine] work.” Id. at *4. This raised red flags among Cincom personnel, saying “there was no way [LabWare] could have legally obtained a copy of the underlying source code” for that technology. Id. at *5. However, a repost of the former employee’s post provided additional information suggesting to Cincom that “it was far more likely that LabWare would be using an open-source Smalltalk variant,” and Cincom decided to wait until “we have evidence that he and/or his company are in violation” before following the lead. Id. In 2014, Cincom did nothing further to investigate, such as reaching out to the defendant or another entity suspected of having pertinent information. Id. Instead, it was not until 2019 when Cincom conducted a “rapid, successful investigation” to gather evidence of misappropriation. Id. at *8. The district court time-barred the 2019 claim, finding that Cincom was on “inquiry notice” based on the blog post in 2014. Id. at *4. On appeal, the Sixth Circuit rejected Cincom’s attempts to rely on all three cases discussed above (B&P Littleford, Campfield, and Metron), distinguished them, and agreed that the claims were time-barred. Id. at *7. The Court discussed all the facts at Cincom’s disposal in 2014, including the social media posts and other public information about LabWare’s technology. Id. at *6. The Court explained, “If Cincom had made at least some showing of chasing down these leads, then it would at least arguably have behaved as a reasonably prudent person should.” Id. *8. Cincom was therefore on “inquiry notice,” and if it had investigated (even if unsuccessfully, like B&P Littleford), it could have avoided summary judgment. See id.
Seventh Circuit
There were no relevant authorities in this circuit over the past year.
Eighth Circuit
Case law in the Eighth Circuit remains largely unchanged with respect to matters regarding employee mobility, restrictive covenants, and trade secrets. That said, there are a few notable points of discussion:
On March 4, 2025, Arkansas Governor Sarah Huckabee Sanders signed into law Senate Bill 139, now Act 232 (the “Act”), which amended the state’s noncompete statute to provide that noncompete covenants that “restrict the right of a physician to practice within the physician’s scope of practice” are now void. The Act became effective 90 days after the conclusion of the current legislative session in mid-July 2025.
A few interesting cases have also come out of the Eight Circuit in the past year. In Choreo, LLC v. Kevin Lors et al., No. 25-1706, 2026 WL 82841, (8th Cir. Jan. 12, 2026), the Eighth Circuit vacated a preliminary injunction that had been granted to Choreo, LLC, against its former employee, Kevin Lors, and his new employer, Compound Planning. Choreo had sought the injunction based on allegations that Lors violated a non-solicitation clause by encouraging former clients to switch to his new employer. The district court granted the injunction, finding irreparable harm based on Choreo’s further loss of customer relationships. On appeal, the Eighth Circuit emphasized that mere allegations of competition or potential loss of clients were insufficient to establish irreparable harm without clear evidence that such harm could not be adequately remedied by monetary damages. As a result, the court vacated the injunction, reinforcing the need for a strong showing of harm to obtain a preliminary injunction.
In Ellingson Drainage, Inc. v. Kippen, No. 3:22-cv-189, 2025 U.S. Dist. LEXIS 265935, No. 3:22-cv-189 (D.N.D. Sep. 30, 2025), the U.S. District Court addressed a claim under the Defend Trade Secrets Act (DTSA), where Ellingson Drainage alleged that Kippen, a former employee, and Landmark, Kippen’s new employer, misappropriated its trade secrets. Ellingson contended that Kippen took valuable, proprietary information, such as client lists and pricing data. The court examined whether Kippen’s actions constituted misappropriation of such information. Ultimately, the court found that Ellingson Drainage had not taken reasonable measures to keep the information secret. While Ellingson Drainage had directed its employees that the information was confidential, evidence showed that employees sometimes left the supposedly confidential information with Ellingson Drainage’s customers, or in file cabinets that were accessible by anyone. As such, Kippen and Landmark were entitled to summary judgment on the DTSA claim.
Finally, Zest Labs sued Walmart in 2018 for allegedly stealing its Zest Fresh technology, which tracks produce freshness from farms to stores. Zest Labs Inc. et al. v. Walmart Inc., Case No. 4:18-cv-00500 (E.D. Ark.). Following a retrial in May 2025, a jury in Arkansas federal court found that Walmart owed Zest Labs more than $222 million. The jury awarded Zest Labs 72.7 million in compensatory damages and $150 million in punitive damages, finding that Walmart had misused its trade secrets after Zest shared its technology for improving food preservation with Walmart. After the jury award, the parties agreed to a confidential settlement to resolve all issues between them.
Ninth Circuit
AB 692
California recently adopted new legislation impacting employee mobility, namely AB 692, or California Business & Professions Code Section 16608. This statute, which went into effect on January 1, 2026, prohibits employers from including “in any employment contract, or to require a worker to execute as a condition of employment or a work relationship a contract that includes, specified contract terms, including a term that requires the worker to pay an employer, training provider, or debt collector for a debt if the worker’s employment or work relationship with a specific employer terminates.” The law creates a private right of action, allowing affected workers to bring claims on behalf of themselves and similarly situated individuals. Remedies include minimum damages of $5,000 per affected worker, injunctive relief, and recovery of attorneys’ fees and costs.
While AB 692 restricts certain repayment obligations, it includes several important exceptions. First, loan repayment assistance and forgiveness programs, which include contracts “entered into under any loan repayment assistance program or loan forgiveness program provided by a federal, state, or local governmental agency,” are excluded from the law. Second, agreements for “the repayment of the cost of tuition for a transferable credential” are excluded provided all of the following conditions are met: (1) the agreement is offered “separately from any contract for employment”; (2) “the contract does not require obtaining the transferable credential as a condition of employment” (3) the repayment amount is specified in advance, not exceeding “the cost to the employer of the transferable credential received by the worker”; (4) the agreement provides for a “prorated repayment amount during any required employment period that is proportional to the total repayment amount and the length of the required employment period and does not require an accelerated payment schedule if the worker separates from the employment”; and (5) repayment is not required if the worker is terminated, “except if the worker is terminated for misconduct.” Third, contracts “related to enrollment in an apprenticeship program approved by the Division of Apprenticeship Standards” are excluded from the prohibition. Fourth, contracts for discretionary or unearned monetary payments “at the outset of employment that is not tied to specific job performance” are excluded provided all of the following conditions are met: (1) repayment terms are in a “separate agreement from the primary employment contract”; (2) the employee is told of the right to consult an attorney and given at least five business days to do so prior to executing the repayment obligation agreement; (3) repayment is “not subject to interest accrual,” prorated based on remaining retention period, up to two years, and may be deferred until “the end of a fully served retention period”; and (4) repayment may only be required if separation is voluntary or due to employee misconduct. Finally, contracts relating to the “lease, financing, or purchase of residential property, including, but not limited to, a contract pursuant to the California Residential Mortgage Lending Act” are excluded from the statute.
Oregon Bureau of Labor & Industries updates to ORS 653.295
Effective January 1, 2026, Oregon’s minimum compensation required to enforce employee noncompetition agreements increased to an annual gross salary and commissions threshold of $119,541. This change narrows the group of employees who may be subject to enforceable noncompetition agreements while leaving intact Oregon’s existing statutory requirements for enforcement of a noncompete. As a result, employers should reassess current and future noncompetition agreements to ensure compliance with the heightened compensation threshold.
Quintara Biosciences, Inc. v. Ruifeng Biztech, Inc., 149 F.4th 1081 (9th Cir. 2025)
In Quintara Biosciences, Inc. v. Ruifeng Biztech, Inc., the Ninth Circuit clarified the level of detail plaintiffs must provide about their trade secrets in order to survive dismissal in the early stages of federal trade secrets litigation. 149 F.4th 1081 (9th Cir. 2025). There, Quintara Biosciences, a California-based DNA sequencing company, filed suit against its competitor also based in California, Ruifeng Biztech, for misappropriation of trade secrets under the federal Defend Trade Secrets Act (DTSA), 18 U.S. Code § 1836. Quintara alleged that Ruifeng misappropriated several trade secrets, including but not limited to customer and vendor databases, marketing plans, and computer software code. From the beginning of discovery, Ruifeng argued that Quintara must specify its trade secrets with “reasonable particularity” under the California Uniform Trade Secret Act (“CUTSA”). After several attempts to force Quintara to provide more detail about its trade secrets, Ruifeng eventually moved to strike Quintara’s trade secrets claims under Federal Rule of Civil Procedure 12(f), which the District Court for the Northern District of California granted for nine of them.
The Ninth Circuit, however, reversed, and clarified that unlike for CUTSA, plaintiffs bringing claims under the federal statute need only identify their trade secrets with “sufficient particularity” at the outset of litigation. Further, the question of whether or not a plaintiff has defined their trade secrets with sufficient particularity is a factual one that should be resolved at trial or through summary judgment, not through motions to strike. According to the Ninth Circuit, the District Court should have allowed Quintara “to refine its identifications through discovery” instead of “functionally dismiss[ing]” nine of its trade secret claims so early on. The District Court’s failure to do so was an abuse of discretion.
David v. Freedom Vans LLC, 4 Wash. 3d 242, 562 P.3d 351 (Wash. 2025)
David v. Freedom Vans LLC has recently given greater clarity to Washington statute RCW 49.62, which—somewhat paradoxically—both prohibits employers from restricting low wage employees from moonlighting at other jobs to supplement their income, but also preserves employees’ common law duty of loyalty to their employers. Low wage employees are considered those making less than twice the minimum hourly wage (which, as of 2025, is $33.32 per hour or $69,305 per year).
In David v. Freedom Vans LLC, Freedom Vans employees were subject to in-term noncompete agreements prohibiting them from “directly or indirectly engaging in any business that competes” with Freedom Vans during their employment. Two former employees sued Freedom Vans. In compliance with these noncompete agreements, they had forgone “side jobs” that would have supplemented their income while working for Freedom Vans. Although the lower courts found that Freedom Vans could lawfully prohibit low wage employees from engaging in “any kind of assistance” to competitors due to the exception for the common law duty of loyalty under RCW 49.62.070, the Washington Supreme Court demanded a narrower interpretation of the duty of loyalty exception. The Washington Supreme Court held that a blanket prohibition against such “side jobs” with an employer’s competitors would unreasonably broaden employees’ duty of loyalty and would undermine the legislature’s intent to permit low wage employees to supplement their income. The Washington Supreme Court remanded the case. The Court advised that, on a case-by-case basis, anti-moonlighting and duty of loyalty provisions must be narrowly drafted and will be strictly construed when applicable to low wage employees in Washington. This case sets the precedent for Washington companies to re-evaluate, and potentially narrow, their “anti-moonlighting” or noncompete provisions in their employment agreements or company handbooks. In the wake of David v. Freedom Vans LLC, counsel for the plaintiff employees have filed new lawsuits against Amazon, Alaska Airlines and Costco to similarly challenge the companies’ restrictions on their workers.
Tenth Circuit
Litigation Updates
In 2024, Colorado enacted a law strengthening protections for employees subject to training repayment agreement provisions (“TRAPs”). Similar restrictions are increasingly being adopted nationwide, and noncompliance can result in significant exposure, including government enforcement actions and private litigation. State attorneys general have been actively enforcing these laws. More recently, in November 2025, Colorado Attorney General Phil Weiser settled a lawsuit against PetSmart LLC for $225,000 and secured an agreement to stop enforcing TRAPs with groomers. In July 2025, the attorneys general of California, Colorado, and Nevada reached a multi-state settlement with HCA Health Care, Inc., which paid approximately $2.9 million and agreed to additional remedial measures over allegedly unlawful training repayment agreements.
In 2025, courts in the Tenth Circuit underscored that plaintiffs must clearly identify trade secrets before seeking judicial relief. In Double Eagle Alloys, Inc. v. Hooper, 134 F.4th 1078 (10th Cir. 2025), the U.S Court of Appeals for the Tenth Circuit affirmed summary judgment for the defendants after the plaintiff broadly claimed that an employee’s notes and more than 2,600 downloaded files were trade secrets. The plaintiff failed to show that the information was protectable, did not demonstrate reasonable efforts to maintain secrecy, and could not overcome evidence that the defendants independently developed similar specifications or that much of the material was publicly available. Similarly, in Applied Predictive Technologies Inc. v. MarketDial Inc., Case No. 2:19-CV-00496 (D. Utah Mar. 25, 2025), a Utah federal court sharply rebuked Applied Predictive Technologies for pursuing trade secret claims without evidence of an identifiable secret, ultimately awarding $2.8 million in attorneys’ fees to the defendants. Both cases highlight that trade secret claims must be clearly defined, supported by evidence, and protected through reasonable secrecy measures—or risk dismissal and potential sanctions.
Developments in the Healthcare Space
In 2025, Colorado and Utah joined a growing list of states limiting the use of restrictive covenants in the healthcare space.
In March 2025, Utah passed SB-228, which prohibits healthcare services platforms—defined as any “program, system, or application through which a health care worker may accept a shift to perform a health care service or role, as an independent contractor, at a health care facility”—from requiring a healthcare worker to enter into a noncompete agreement. The law defines healthcare workers broadly as any “individual who provides or delivers a health care service, or assists in the provision or delivery of a health care service, including a service for which no license or certification” is required.
In June 2025, Colorado passed SB-25-083, which prohibits covenants—such as noncompetes and patient non-solicitation provisions—that restrict the practice of medicine, advanced practice registered nursing, or dentistry, regardless of whether the practitioner is a highly compensated worker. The law also expressly permits healthcare providers departing their practice to disclose to their patients (a) that they will continue to practice medicine; (b) their new professional contact information; and (c) patients’ right to choose a healthcare provider.
Other Developments
In Kansas, the Governor signed SB 241, which amends the Kansas Restraint of Trade Act. SB 241 took effect on July 1, 2025. The amendment establishes a presumption that certain customer and employee non-solicitation agreements are enforceable. Covered circumstances include employee non-solicitation or non-recruitment provisions that either (1) seek to protect confidential or trade secret information, customer or supplier relationships, goodwill, or loyalty, OR (2) do not extend beyond two years following the end of employment. The presumption also extends to customer non-solicitation provisions that do not continue for more than two years. A presumption of enforceability also now exists for agreements in “which an owner agrees to provide prior notice of the owner’s intent to terminate, sell or otherwise dispose of such owner’s ownership interest in the business entity.” SB 241 further mandates judicial modification of overbroad restrictive covenants. Kansas courts are now required to “modify the covenant, enforce the covenant as modified and grant only the relief reasonably necessary to protect such interests.”
In Wyoming, the Governor signed Senate File 107, now Enrolled Act No. 87 (the “Act”), which renders void any covenant not to compete that restricts a person’s right to receive compensation for the performance of labor. The Act applies to contracts entered into on or after the effective date of July 1, 2025. The Act contains language broad enough to make most noncompete covenants with workers void regardless of a worker’s status as an employee or an independent contractor, or the type of agreement the covenant may be found in. Also included in the Act is a restriction on training repayment agreements and expense relocation agreements that do not satisfy statutory limitations. The Act contains several common exemptions, including agreements with “executive and management personnel” and with “employees who constitute professional staff to executive and management personnel,” although these terms are not defined. It also permits noncompete provisions in connection with the purchase or sale of a business or its assets, and allows covenants to the extent they protect trade secrets. These exceptions, however, do not extend to any agreements “between physicians that [restrict] the right of a physician to practice medicine.”
11th Circuit
Over the past year, practitioners in the Eleventh Circuit saw significant developments that changed the contours of restrictive covenant enforcement and trade secret litigation.
The Federal Trade Commission dismissed its appeals in Properties of the Villages v. FTC (11th Cir.) and Ryan, LLC v. FTC (5th Cir.), stepping away from a nationwide noncompete ban. The agency’s leadership has indicated it instead plans to rely on case‑by‑case enforcement to challenge unjustified or overly broad noncompetes, particularly for lower‑wage workers, with the goal of pushing firms to use only narrowly tailored restrictions tied to legitimate business interests.
Florida’s Legislature moved in the opposite direction of many states by enacting the Contracts Honoring Opportunity, Investment, Confidentiality, and Economic Growth (CHOICE) Act, effective July 1, 2025. The CHOICE Act supplements Fla. Stat. § 542.335 and creates a parallel, employer‑friendly enforcement track for covered employees (generally those earning at least twice the county’s annual mean wage). It codifies robust tools for noncompetition and garden‑leave arrangements, including a strong presumption of enforceability, mandatory issuance of preliminary injunctions absent a clear‑and‑convincing showing by the employee, a seven‑day review period, and continued salary and benefits during garden leave. It also authorizes notice and garden‑leave periods up to four years. With states around the country continuing to restrict or ban post‑employment noncompetes, the CHOICE Act positions Florida as one of the most employer‑friendly jurisdictions for restrictive covenants.
In Alabama Aircraft Indus., Inc. v. Boeing Co., 133 F.4th 1238 (11th Cir. 2025), the court reversed the district court’s dismissal of a trade secret misappropriation claim under the Missouri Trade Secrets Act, which the court applied pursuant to the parties’ contractual choice-of-law provision rather than Alabama law. The court held that although a contractual limitation‑of‑liability provision may bar most forms of damages, it does not categorically foreclose an unjust‑enrichment remedy where that recovery would not duplicate contract damages.
In NetRoadshow, Inc. v. Carrandi, No. 25-10388, 2025 WL 2435411 (11th Cir. Aug. 25, 2025) (unpublished), the court vacated the dismissal of an employee’s counterclaim under California Business and Professions Code section 16600.5. The court held that a Georgia choice‑of‑law clause limited to “this Agreement” did not automatically bar a statutory tort claim arising from a source outside the contract, and therefore did not prevent the employee from invoking California’s noncompete statute. On remand, the district court must apply Georgia’s choice‑of‑law precedent and its public‑policy exception to determine which state’s law governs the statutory claim. For multistate employers confronting the extraterritorial reach of California’s noncompete ban, the decision cautions that a contractual choice‑of‑law provision alone may not resolve statutory counterclaims, and although unpublished, it still signals how the Eleventh Circuit may approach conflicts‑of‑law issues involving foreign noncompete statutes.
At the state level, the Georgia Court of Appeals in All States AG Parts, LLC v. Herzig, 374 Ga. App. 389, 913 S.E.2d 26 (2025), reaffirmed that noncompetes restricting work “in any capacity” are facially overbroad and are unlikely to be salvaged through blue‑penciling.
Finally, in Rotech Healthcare, Inc. v. Carmichael, No. 6:23‑cv‑2338‑JA‑RMN, 2025 WL 2879775 (M.D. Fla. Oct. 9, 2025), the court held that an employee’s act of forwarding the employer’s detailed referral‑source lists and sales notes to his personal email shortly before joining a competitor constituted misappropriation under both the Defend Trade Secrets Act and the Florida Uniform Trade Secrets Act, even without evidence of post‑departure use or disclosure.
DC Circuit
There were no relevant authorities in this circuit over the past year.
