Vermont non compete law enforces non competes only when they are reasonable: vermont has no non compete statute; the Vermont Supreme Court (Summits 7 v. Kelly, 2005) enforces a covenant that is reasonable and justified, narrowly tailored in geography, time and subject matter to protect the employer’s legitimate interests, and continued at-will employment is sufficient consideration.
Bills to ban non competes have been introduced in 2018, 2019 and again in 2026, and the House Commerce Committee was studying the question in January 2026, but no ban has passed.
This guide gives the exact Vermont non compete law rule with the date we verified it, the threshold and carve-outs where they exist, what a court does with an overbroad term, and what to do if you signed one. Rules verified against the statute on 2026-10-08; confirm the current rule with Vermont Department of Labor, Wage and Hour Program or an attorney before you rely on it.
Vermont Non Compete Law at a Glance
| Status | Enforceable if reasonable (common law) |
| Income threshold | No earnings threshold |
| Statute | Common law: Summits 7, Inc. v. Kelly, 2005 VT 97; Roy’s Orthopedic v. Lavigne (1984) |
| Notice / consideration | Continued at-will employment is sufficient consideration (Summits 7); the burden is on the worker to show the covenant is unreasonable |
| Carve-outs | Lawyers (court rules); a 2019 bill (H.1) would have voided all employee non competes except for the sale of a business or dissolution of a partnership or LLC… |
| Overbroad terms | reform — Vermont courts have enforced a covenant to the extent reasonable |
| In effect since | common law since Summits 7 (2005); no statute as of this verification |
In This Vermont Non Compete Law Guide:
Is a Non Compete Enforceable Under Vermont Non Compete Law?
Vermont has no non compete statute; the Vermont Supreme Court (Summits 7 v. Kelly, 2005) enforces a covenant that is reasonable and justified, narrowly tailored in geography, time and subject matter to protect the employer’s legitimate interests, and continued at-will employment is sufficient consideration.
Bills to ban non competes have been introduced in 2018, 2019 and again in 2026, and the House Commerce Committee was studying the question in January 2026, but no ban has passed. The statute is Common law: Summits 7, Inc. v. Kelly, 2005 VT 97; Roy’s Orthopedic v. Lavigne (1984).
The carve-outs matter: lawyers (court rules); a 2019 bill (H.1) would have voided all employee non competes except for the sale of a business or dissolution of a partnership or LLC — not enacted.
Vermont Non Compete Law at a Glance
Rules verified against the statute on 2026-10-08; confirm the current rule with Vermont Department of Labor, Wage and Hour Program or an attorney before you rely on it. The statute row is where to check it yourself.
| Status | Enforceable if reasonable (common law) |
| What the rule says | Vermont has no non compete statute; the Vermont Supreme Court (Summits 7 v. Kelly, 2005) enforces a covenant that is reasonable and justified, narrowly tailored in geography, time and subject matter to protect the employer’s legitimate interests, and continued at-will employment is sufficient consideration. Bills to ban non competes have been introduced in 2018, 2019 and again in 2026, and the House Commerce Committee was studying the question in January 2026, but no ban has passed. |
| Income threshold | No earnings threshold |
| Statute | Common law: Summits 7, Inc. v. Kelly, 2005 VT 97; Roy’s Orthopedic v. Lavigne (1984) |
| Notice or consideration rule | Continued at-will employment is sufficient consideration (Summits 7); the burden is on the worker to show the covenant is unreasonable |
| Carve-outs | Lawyers (court rules); a 2019 bill (H.1) would have voided all employee non competes except for the sale of a business or dissolution of a partnership or LLC — not enacted |
| What a court does with an overbroad term | reform — Vermont courts have enforced a covenant to the extent reasonable |
| In effect since | common law since Summits 7 (2005); no statute as of this verification |
The Reasonableness Test Under Vermont Non Compete Law
Vermont courts treat non competes with caution, because they cut against the public policy that people should be free to work in their trade. A court generally looks at whether the time limit, the geographic area and the type of work restricted are narrowly tailored to protect a real business interest, such as customer relationships, goodwill or confidential information.
Courts also weigh whether the restriction causes undue hardship to the worker. Vermont has no general non compete statute, so these rules come from Vermont Supreme Court decisions.
Vermont courts have generally upheld short restrictions that are tied to the employer’s actual customers or market. One example is a six-month limit on a sales employee in a business with a small client base. Restrictions that run longer than needed to protect the business, or that cover areas or work the employee never touched, are more likely to be found unreasonable.
With an overbroad term the court will reform — Vermont courts have enforced a covenant to the extent reasonable.
Vermont Non Compete Law If You Were Fired or Laid Off
No Vermont statute or reported Vermont decision bars an employer from enforcing a non compete just because it fired or laid off the worker. However, a federal appeals court applying Vermont law has held that the circumstances of the termination, including whether the worker left voluntarily, can be weighed in deciding whether the restriction is reasonable.
What the Employer Must Give Under Vermont Non Compete Law
Continued at-will employment is sufficient consideration (Summits 7); the burden is on the worker to show the covenant is unreasonable The Vermont Supreme Court has held that continued at-will employment can be enough consideration for a non compete signed partway through a job, so a raise or bonus is not strictly required.
If an employer acts in bad faith, for example by firing the worker shortly after the signing, the agreement may not stand.
Non Solicit and Non Disclosure Agreements Under Vermont Non Compete Law
A non solicit only bars contacting the former employer’s customers or coworkers, and a non disclosure only protects confidential information. Neither one stops you from working in your field. Because they restrict less, they are often easier to defend under the same reasonableness review, and Vermont’s Trade Secrets Act separately protects genuine trade secrets.
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If You Already Signed One: Vermont Non Compete Law in Practice
Read the agreement closely for the exact length, the geographic area, the type of work it covers, and whether it applies no matter how the job ended. You can ask your former employer for a written release, or ask whether a new role that doesn’t overlap with your old customers or duties is acceptable.
Before you accept a competing offer, it may help to have a Vermont employment attorney review the agreement.
An employer that shows a valid agreement was broken generally asks the court for an injunction stopping the competing work, and it may also seek money damages for any losses it can prove. Vermont follows the general rule that each side pays its own attorney’s fees unless the contract says otherwise, so check whether your agreement has a fee clause.
The Federal Rule and Vermont Non Compete Law
The Federal Trade Commission adopted a nationwide non compete ban in 2024, but a federal court blocked it before it took effect and the FTC later withdrew its defense; as of October 2026 there is no federal ban in force, so Vermont non compete law controls. In 2025–2026 the Vermont House considered H.205, a bill that would have made most employee non competes void.
On March 13, 2026, the House sent it back to the Commerce committee, and it did not become law before the session ended. Vermont’s court-made reasonableness rules still apply.
Other Vermont Non Compete Law Rules to Know
The Vermont Supreme Court has not settled whether a judge may trim an overly broad non compete down to a reasonable scope (“blue pencil” it) or must throw out the whole agreement. That means the outcome for an overbroad agreement can be hard to predict.
Think your employer owes you money or broke the law?
A non compete is a contract question, and the answer turns on your own agreement’s words. Your state bar runs a lawyer-referral service that connects you with an employment attorney for a short, low-cost first consultation — find it through the American Bar Association referral directory. Free legal aid may also help if your income qualifies.
Vermont — the bottom line
- Vermont non compete law is a reasonableness test decided case by case — the first thing to check is which side of the line your agreement falls on.
- Under Vermont non compete law, an overbroad term is reform — Vermont courts have enforced a covenant to the extent reasonable — the words of your own agreement decide more than the headline rule.
- Vermont non compete law does not stop you from taking a new job in a different field or outside the restricted area — read the scope before you turn an offer down.
Frequently Asked Questions
Are non competes enforceable in Vermont?
Sometimes. Vermont has no non compete statute; the Vermont Supreme Court (Summits 7 v. Kelly, 2005) enforces a covenant that is reasonable and justified, narrowly tailored in geography, time and subject matter to protect the employer’s legitimate interests, and continued at-will employment is sufficient consideration.
Bills to ban non competes have been introduced in 2018, 2019 and again in 2026, and the House Commerce Committee was studying the question in January 2026, but no ban has passed.
Is there an income threshold under Vermont non compete law?
No. Vermont has no earnings threshold; enforcement turns on whether the agreement is reasonable.
What does a Vermont court do with an overbroad non compete?
Reform — Vermont courts have enforced a covenant to the extent reasonable.
Can my employer enforce a non compete in Vermont after firing me?
No Vermont statute or reported Vermont decision bars an employer from enforcing a non compete just because it fired or laid off the worker.
I signed a non compete in Vermont and have a new offer — what should I do?
Read the agreement closely for the exact length, the geographic area, the type of work it covers, and whether it applies no matter how the job ended. You can ask your former employer for a written release, or ask whether a new role that doesn’t overlap with your old customers or duties is acceptable.
Official Vermont Sources & Resources
- Vermont Department of Labor, Wage and Hour Program: https://labor.vermont.gov/wage-and-hour
- Vermont non compete statute: Common law: Summits 7, Inc. v. Kelly, 2005 VT 97; Roy’s Orthopedic v. Lavigne (1984)
- Verified source: https://legislature.vermont.gov/Documents/2026/Workgroups/House%20Commerce/Commerce/Non-Competes/W~Chris%20D’Elia~Non-Competes%20Report%20~1-8-2026.pdf
- Verified source: https://www.drm.com/wp-content/uploads/2022/01/Non-Compete-Laws-Vermont-2-532-2749.pdf
- U.S. Department of Labor, Wage and Hour Division — state payday requirements: dol.gov
- Federal Trade Commission — the non compete rule (status): ftc.gov
- Vermont bar lawyer referral: https://www.vtbar.org/find-a-lawyer/
This Vermont non compete law guide was last verified against official Vermont sources in October 2026. Rules change — confirm the current figure with the state agency or a licensed attorney.
More Vermont Workplace Rights Guides
- Vermont Final Paycheck Law: Deadlines and Penalties
- Vermont Wrongful Termination Laws: When a Firing Is Illegal
- Vermont At Will Employment Law: The Exceptions
- Vermont Labor Laws: Every Rule in One Place
- Unemployment and Workplace Rights Guides for All 50 States
Disclaimer: This guide is general information, not legal or financial advice. My Unemployment Rights is an independent educational resource, not a government agency and not a law firm. Final-paycheck deadlines, penalties and non compete rules change — every figure here carries the date we verified it. Confirm the current rule with your state labor department or a licensed attorney before you act.