VT H0334

Noncompete agreements that restrict employees from working for competitors after leaving a job are declared void and unenforceable in Vermont, with exceptions for business sales, partnership dissolutions, and LLC terminations.

Trade secret nondisclosure agreements and reasonable nonsolicitation agreements (preventing recruitment of employees or solicitation of clients) remain permitted.

"Stay-or-pay" provisions requiring employees to repay employers upon separation (including training repayment agreements, quit fees, and sign-on bonus clawbacks) are prohibited unless they meet specific conditions: voluntary agreement, reasonable repayment amount not exceeding actual cost, disclosed amount before agreement, reasonable stay period, and no repayment required if terminated without cause.

Employers must provide written individualized notice to current and former employees that existing noncompete agreements and non-compliant stay-or-pay provisions are void and unenforceable.

Employees are protected from retaliation for exercising rights under this act, with existing penalty and enforcement provisions applying; the act takes effect upon passage.