VT H0205

Prohibits noncompete agreements in franchise agreements, making void any provisions that restrict franchisees from operating their businesses after separating from franchisors based on geographic area, time period, or competitive activity

Bans noncompete agreements for employees earning less than $100,000 annually in gross wages, voiding restrictions on working for competitors, in certain areas, or in similar roles after leaving employment

Permits noncompete agreements in limited circumstances: sale of a business or ownership interest, dissolution of partnerships or LLCs, and severance agreements with reasonable limitations tied to the amount of severance pay offered

Requires employers and franchisors to notify current and former employees/franchisees in writing that existing noncompete agreements violating the law are void and unenforceable

Effective date of July 1, 2025; does not apply to trade secret protections, nondisclosure agreements, or reasonable nonsolicitation agreements