Occupation limits
Vermont Non-Compete Law (2026): Common law only; reform stalled
Vermont has no non-compete statute of general application, so the question of whether a covenant binds a worker is answered by a judge weighing the employer's asserted interest against the burden on the employee and on the public. One narrow prohibition exists in the licensing code: a school of barbering or cosmetology may not make a covenant not to compete a condition of enrolling a student for licensure training. Legislators spent the 2026 session working on a far broader ban and ran out of calendar before passing it.
The rule
How Vermont treats non-compete agreements
The § 281(c) provision is easy to miss because it is buried in the school-approval section rather than in a restrictive-covenant chapter, and the pattern it targets — a training academy tying up its own graduates — is exactly the abuse that low-wage non-compete bills elsewhere were written to stop. H.205's fate is worth understanding precisely: it was not defeated on the merits, it was recommitted while the House looked for consensus, and the House Commerce Committee had already commissioned a January 2026 working report on the subject. Vermont is a plausible candidate to enact something in the next biennium.
If you are an employer
Vermont still lets you enforce a covenant that is proportionate to a real interest, but the House came within a floor vote of voiding most of them in 2026, so treat the current permissiveness as unstable and keep drafting tight.
If you are a worker
Your best argument in Vermont is that the restriction reaches further than anything your employer actually needs to protect, since no statutory threshold or time cap exists to help you.
| Classification | Judge-made reasonableness; one trade-school carve-out |
|---|---|
| Pay threshold | None. Vermont has never adopted a pay floor for non-compete enforceability. |
| Maximum term | Nothing in statute. Length is one input into the court's overall reasonableness assessment, weighed together with geography and the scope of restricted activity. |
| Notice or consideration | No advance-notice or standalone-disclosure duty. Ordinary contract rules about consideration are the only formal constraint. |
| Primary statute | No general non-compete statute. 26 V.S.A. § 281(c) prohibits barbering and cosmetology schools from conditioning training on a covenant not to compete; everything else is common law. |
Detail
What has changed, and what is still moving
Legislation 2024–2026
Nothing enacted. The 2025-2026 biennium closed on May 29, 2026 without a general non-compete statute, leaving 26 V.S.A. § 281(c) — a provision that long predates the current reform wave — as the sole statutory prohibition on the books.
Bills to watch
No significant restrictive bills pending. H.205 came closer than any prior Vermont measure, clearing committee and reaching third reading in February 2026 before the House sent it back to committee on March 13 and the session expired around it. Any successor has to be reintroduced in the 2027 biennium.
Leading cases
Vermont Electric Supply Co. v. Andrus, 135 Vt. 190 (1977) remains the reference point, treating a post-employment restraint as enforceable only where it is needed to protect a legitimate employer interest and is not unreasonable in time, space or the activity it forecloses. Because there is no statute to construe, Vermont's non-compete doctrine is still built almost entirely out of equity decisions on injunctive relief.
If you have one in hand
What can make a non-compete unenforceable in Vermont
- Your occupation is carved out. Judge-made reasonableness; one trade-school carve-out
- The scope is wider than the interest behind it. A restriction that reaches beyond the customers, trade secrets or goodwill the employer can actually point to is the most common reason a covenant fails in Vermont.
Whether any of these applies turns on the wording of your own agreement, your role and the case law your court follows. This page maps the statutory landscape; it does not replace advice on a specific contract.
FAQ
Vermont non-compete questions
Are non-compete agreements enforceable in Vermont?
Vermont has no non-compete statute of general application, so the question of whether a covenant binds a worker is answered by a judge weighing the employer's asserted interest against the burden on the employee and on the public. One narrow prohibition exists in the licensing code: a school of barbering or cosmetology may not make a covenant not to compete a condition of enrolling a student for licensure training. Legislators spent the 2026 session working on a far broader ban and ran out of calendar before passing it.
How long can a non-compete last in Vermont?
Nothing in statute. Length is one input into the court's overall reasonableness assessment, weighed together with geography and the scope of restricted activity.
Is there a minimum salary for non-competes in Vermont?
No. Vermont sets no income floor, so pay alone does not decide whether a covenant binds you. The test is whether the restriction goes further than the employer's legitimate interest requires in time, geography and scope of work.
What notice or consideration does Vermont require?
No advance-notice or standalone-disclosure duty. Ordinary contract rules about consideration are the only formal constraint.
Sources
How this entry was checked
- Primary source. No general non-compete statute. 26 V.S.A. § 281(c) prohibits barbering and cosmetology schools from conditioning training on a covenant not to compete; everything else is common law. — the statutory text itself.
- Secondary sources consulted. 26 V.S.A. § 281 (Justia), Vermont General Assembly bill status for H.205 (2025-2026), H.205 as introduced, Vermont Chamber 2026 labor legislation outlook, House Commerce non-competes working report, January 8, 2026, VTDigger coverage of the May 29, 2026 adjournment.
Check it against a third party
None of these is ours. If a figure here matters to a decision, verify it:
- Federal Trade Commission — non-compete hub
- Economic Innovation Group — State Noncompete Law Tracker
- Fair Competition Law (Beck Reed Riden) — 50-state legislation tracker
- GAO-23-103785 — Noncompete Agreements (May 2023)
This page is general legal information published by Jurizmo and is not legal advice, does not create an attorney-client relationship, and may not reflect amendments enacted after the review date above. Consult a licensed attorney in the relevant state before acting on any agreement.