Comprised of 14 pages of exposition, mission-setting, and agency directives, the Biden Order affirmed that administration’s aim to “enforce the antitrust laws to combat excessive concentration of industry, the abuses of market power, and the harmful effects of monopoly and monopsony—especially as these issues arise in labor markets, agricultural markets, Internet platform industries, healthcare markets (including insurance, hospital, and prescription drug markets), repair markets, and United States markets directly affected by foreign cartel activity[.]” The Biden Order set out a “Whole-of-Government competition Policy” that directed federal agencies, such as the Federal Trade Commission (“FTC”), to adopt pro-competitive regulations and rescind regulations that “create unnecessary barriers to entry that stifle competition,” including narrowing or eliminating the scope of enforceable restrictive covenants.

As previously reported, the CHOICE Act outlines certain noncompete and garden leave agreement requirements.  As long as the requirements are met, a court “must preliminarily enjoin” a “covered employee” from breaching a noncompete or garden leave agreement if a “covered employer” seeks enforcement of a “covered noncompete agreement” or “covered garden leave agreement.”

On May 22, 2025, the New Jersey Legislature introduced S4385/A5708 (the “Bill”), a comprehensive proposal that, if enacted, would significantly limit the enforceability of noncompetes and ban no-poach agreements in New Jersey. The Bill is currently pending in the Senate Labor Committee, but its potential impact on business operations, talent strategy, and contractual practices is already drawing close attention from legal and executive leadership.  

The Bill broadly prohibits an “employer,” defined to include business entities, nonprofit organizations, and public sector employers, from seeking, requiring, or enforcing a noncompete or no-poach agreements with a “worker.” The term “worker” includes non-senior employees and executives, independent contractors, volunteers, externs and interns, apprentices, and sole proprietors, without regard to compensation status or classification under state or federal law.

HB 1219 outlines certain noncompete and garden leave agreement requirements, such as confidentiality access and notice periods, to accept such agreements as enforceable. So long as the requirements are met, noncompete and garden leave agreements will not be considered a restraint of trade or an attempt to monopolize trade or commerce in violation of public policy. On April 23, 2025, the House voted 91-21 to pass HB 1219, and a day later, the Senate voted 28-9 to pass BH 1219. As of April 24, 2025, the bill was ordered and enrolled.

States Seeking To Ban All Noncompetes Both Retroactively And Prospectively

Michigan

In January 2025, Michigan introduced House Bill 4040 (HB4040) that if enacted, would prohibit businesses from entering into, enforcing, or representing the existence of noncompetes with any workers.  The only exceptions under the HB4040 are for a worker who sells their ownership stake in a business or a worker who is responsible for selling substantially all of the business’s assets.  If passed, Michigan would join California, Minnesota, North Dakota, and Oklahoma as the only states that broadly prohibit noncompetes between employers and employees.

The Act is set to take effect 90 days after the conclusion of the current legislative session, so it is anticipated that the Act will take effect on or about July 15, 2025.  The Act does not state whether it applies prospectively only or whether it will have retroactive effect, and, therefore, invalidate existing physician noncompete agreements. 

The Act defines “physician” as any person authorized or licensed to practice medicine under the Arkansas Medical Practices Act or a person authorized to practice osteopathy under Arkansas statute. 

The Bill follows Governor Hochul’s December 2023 veto of Senate Bill 3100-A, also sponsored by Senator Sean Ryan, that sought to broadly ban noncompetes for all employees regardless of income. As we reported in December 2023, Governor Hochul stated that she would not sign an outright noncompete ban, but instead preferred a “balance” with a compensation threshold and a carveout for noncompetes entered into in connection with the sale of a business. The new Bill does just that.

The Bill prohibits a person (an undefined term under the Bill) from entering into or enforcing a noncompete with a “worker,” regardless of when such covenants were entered into.  The Bill broadly defines a “worker” as “an individual who works or previously worked, without regard to whether the individual was paid, to the worker’s title, or to the worker’s status under any other state or federal laws, including whether the worker is an employee, independent contractor, extern, intern, volunteer, apprentice, or sole proprietor who provides a service to a person.”