Legislative committee considering bill to limit non-compete agreements in Wyoming
RIVERTON — Legislators have voted to delay until their next meeting a bill that, if passed, would void all future non-compete clauses in the Wyoming marketplace.
The bill was brought to the Wyoming Legislature Joint Judiciary Committee last week by State Rep. Clark Stith, R-Rock Springs.
Stith, an attorney, recently argued and won a Wyoming Supreme Court case avenging nurses who were “booted out of the county,” because they could not gain new work after leaving their jobs at a healthcare organization, Stith said.
Employers would retain, under the bill, the right to sue for misappropriation of trade secrets, for misappropriation of confidential data, for solicitation of clients and other workplace misdeeds. The proposed law also would allow employers to “claw back” hiring bonuses before the employee had fulfilled a period of two or, pursuant to a judiciary amendment, three years on the job.
State Rep. Ember Oakley, R-Riverton, expressed discomfort with what other critics called the bill’s broad strokes.
“I’m just wondering if you think there is room for maybe a compromise here, rather than straight prohibition,” said Oakley, adding that policymakers should consider both “the freedom to contract and the freedom to work.”
Stith said he had a hard time imagining a compromise.
Wyoming Hospital Association director Eric Boley spoke against the bill, saying that the marketplace corrects and directs itself without government interference. Rep. Barry Crago, R-Buffalo, asked Boley to defend the persistence of non compete contracts in an era in which nurses and medical staff were being compelled to leave their jobs due to hospital and healthcare vaccine mandates.
“If they have a non-compete (contract) and they say ‘I’m not getting vaccinated,’ and now they can’t work for another provider, that maybe isn’t going to make them get vaccinated, are we going to lose more nurses or other healthcare providers over the next couple of years?” asked Crago.
Boley said non-compete contracts in the hospital industry are less common among nurses than doctors and other higher-level licensees.
“With that said,” continued Boley, “a lot of our nursing staff right now that are leaving employment at the hospitals –– they’re going out and joining traveling agencies, where they’re getting paid $200 to $250 an hour as opposed to the regular $30 or $40 an hour. So the market is actually correcting and dictating this, and we (hospitals) are actually in a worse position because of COVID, because we have folks leaving full-time positions in our existing facilities — and then we’re competing with other states to bring them back at a much higher rate.”
Stith countered that his recent case on the matter demonstrates that not all nurses have the option of joining traveling agencies.
Judiciary Committee co-chair Sen. Tara Nethercott, R-Cheyenne, proposed to draft an alternate bill mirroring a piece of Colorado legislation.
The Colorado law differentiates between CEOs and other business managers who, Nethercott said, have more bargaining power and access to legal counsel for navigating restricting contracts — but forbids the application of non compete contracts against nurses and other foundational laborers.
Her co-chair, State Rep. Jared Olsen, R-Cheyenne, agreed, saying it’s a “good idea” to distinguish “some way to separate out those who truly enter into the contract unequally.”