Trade Secrets & Employee Mobility

As state legislatures continue to reshape the landscape of restrictive covenants in the wake of federal uncertainty, Texas is one of the latest to amend its existing laws governing non-compete agreements for healthcare workers. Texas Senate Bill (SB) 1318, which takes effect on September 1, 2025, tightens Texas’ already well-regulated statute by further restricting the enforceability standards for physician non-competes and, for the first time, extends similar restrictions to other licensed healthcare practitioners. 

Key Changes to Physician Non-Compete Agreements

In June 2025, Texas Governor Greg Abbott signed SB1318 into law, which, effective September 1, 2025, revises Sections 15.50 and 15.52 of the Texas Business & Commerce Code, and adds a new Section 15.501.

As anticipated, New Jersey has joined the growing list of state legislative efforts aimed at prohibiting or restricting the use of noncompetes and no-poach agreements.

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.

Thomson Reuters Practical Law released the 2025 update of “Non-Compete Laws: New Jersey,” a Practice Note co-authored by attorneys James P. Flynn and Daniel R. Levy, our colleagues at Epstein Becker Green.

Following is an excerpt (see below to download the full version in PDF format):

A Q&A guide to non-compete agreements between employers and employees for private employers in New Jersey. This Q&A addresses enforcement and drafting considerations for restrictive covenants, such as post-employment covenants not to compete and non-solicitation of customers and employees. Federal, local, or municipal law may impose additional or different requirements. Answers to questions can be compared across a number of jurisdictions.

On Spilling Secrets, our podcast series on the future of non-compete and trade secrets law, our panelists discuss the current status of non-compete agreements across the nation.

Non-compete legislation is evolving rapidly at the state level, with new laws taking effect soon in Arkansas, Kansas, Virginia, and Wyoming. Looking ahead, pending bills in over a dozen states could reshape how employers approach restrictive covenants.

In this episode, Epstein Becker Green attorneys Peter A. Steinmeyer, Daniel R. Levy, David J. Clark, and Carolyn O. Boucek discuss the new and proposed state non-compete laws and their implications for employers, as well as alternative tools that can be used to address these restrictions. From expanded protections for low-wage workers in Virginia to Kansas’s focus on non-solicit provisions, this episode offers actionable takeaways to help employers stay compliant.

In the wake of the nationwide injunction last year barring the Federal Trade Commission’s (FTC) attempted Noncompete Ban, states have continued to legislate the scope of enforceable restrictive covenants, especially noncompetes. In particular, many states are legislating specific rules for restrictive covenants for certain providers in the healthcare industry. In addition to the other states we previously reported noted, the latest wave of such states to pass legislation regarding noncompetes for health care providers includes Montana, Indiana, Colorado, Oregon, and Utah.

Prema Engineering S.r.l. (“Prema Engineering”) has accused automaker Automobili Lamborghini S.p.A. and Automobili Lamborghini America, LLC (collectively, “Lamborghini”) of stealing Prema Engineering’s intellectual property and trade secrets it supplies to Hypercars used in endurance racing. In Prema Engineering S.r.l. v. Automobili Lamborghini S.p.A., filed in the United States District Court for the Western District of Texas, Austin Division, Prema Engineering alleges that in 2024,  Lamborghini, while in a racing partnership with Prema Engineering and Iron Lynx racing team, stole Prema Engineering’s high-tech trade secret-protected steering wheel software in order to use it in Lamborghini’s new racing partnership with Riley Motorsports, a competitor of Prema Engineering and Iron Lynx.

Prema Engineering alleges that Lamborghini entered into a partnership with the Iron Lynx racing team, pursuant to which Lamborghini sold two Lamborghini-manufactured Hypercars to the Iron Lynx team and agreed to provide spare parts and other supply-related assistance for the Hypercars. Under the partnership, Prema Engineering was the exclusive provider of all servicing, maintenance, engineering and technical support to the Iron Lynx racing team.

On Spilling Secrets, our podcast series on the future of non-compete and trade secrets law, our panelists discuss the ins and outs of trying trade secret cases in a courtroom:

What’s the secret to winning a trade secret trial? Find out in this compelling episode of Spilling Secrets, where Epstein Becker Green attorneys Katherine G. Rigby, James P. Flynn, and Adam Paine break down the art of navigating these high-stakes cases.

From designing winning courtroom tactics and leveraging key witnesses to using storytelling as a tool to clarify complex trade secret claims, our panelists offer actionable insights and essential tips for safeguarding confidentiality and determining the right trial format to secure the best outcomes for your business.

We recently reported that Kansas was in a minority of states to enact employer-friendly restrictive covenant legislation.  Florida is on the verge of joining Kansas following the introduction of House Bill 1219 (“HB 1219”), which creates, in part, the “Florida Contracts Honoring Opportunity, Investment, Confidentiality, and Economic Growth (CHOICE) Act”. If enacted, HB 1219 will provide a framework for the use of permissible noncompete and garden leave agreements between a covered employer and covered employee. If passed, the bill would strengthen the enforceability of noncompete and/or garden leave agreements.

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.

After the nationwide injunction barring the Federal Trade Commission (FTC) Noncompete ban, we reported that “employers can expect that states will continue to introduce legislation aimed at restricting the use of noncompetes.”  In the first few months of 2025, Virginia and Wyoming passed legislation restricting noncompetes, and Arkansas, Louisiana, and Maryland passed legislation restricting physician noncompetes.  We also reported on pending legislation in New York, Ohio, Texas, and Washington aimed at limiting noncompetes and other restrictive covenants. We are a third of the way through the calendar year, and July 1 (the date many laws go into effect) is approaching.  This post addresses legislation pending in seven other states that also seek to limit the use of noncompetes.

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.

Thomson Reuters Practical Law has released the 2025 Practice Note titled “Health Care Non-Competes,” authored by David J. Clark.

The Note discusses non-compete agreements in the health care sector, examining the legal and policy considerations impacting their enforceability. It highlights the unique challenges posed by health care non-competes, including patient access and continuity of care, and reviews state-specific statutes that restrict or prohibit these agreements for various health care workers. This Note discusses alternative restrictive covenants, such as non-solicitation and non-treatment agreements, and provides insights into the jurisdictional variations in non-compete enforceability. It also addresses ethical concerns raised by health care non-competes, particularly those affecting physicians, and examines the implications of telemedicine and health care deserts on non-compete enforcement. This Note offers guidance on best practices for drafting and enforcing non-competes. It is jurisdiction-neutral but will be useful to employers and their counsel in all jurisdictions.