Vermont has established meaningful protections against non-compete agreements for lower-wage workers and has been actively debating whether to expand those protections further. The state's approach combines statutory income thresholds with judicial reasonableness review.
Vermont's Income Threshold Restrictions
Vermont law restricts non-compete agreements for employees who earn below certain income thresholds. Lower-wage workers in Vermont are protected from non-compete enforcement, reflecting the state's recognition that these agreements can cause disproportionate harm to employees with limited bargaining power.
✅ Lower-wage and hourly workers in Vermont are protected from non-compete enforcement by Vermont's income threshold restrictions. If you earn below the applicable threshold, your non-compete agreement may be void regardless of what the contract says.
Notice Requirements in Vermont
Vermont requires that employers provide advance notice of non-compete requirements before a prospective employee accepts an offer of employment. Employers cannot spring a non-compete on an employee after they have already accepted the job and given notice to their prior employer. Failure to provide adequate advance notice can affect enforceability.
Pending Legislation in Vermont — 2026
Vermont has active pending legislation in 2026 that would significantly expand non-compete restrictions. Multiple bills have been introduced in the Vermont legislature that would:
- Further expand income threshold protections
- Impose new notice and disclosure requirements
- Potentially ban non-competes more broadly for many categories of workers
📋 Important: Vermont's non-compete law is actively evolving in 2026. If you are evaluating a non-compete agreement in Vermont, consult an employment attorney for the most current legal status. Legislation that has not yet passed could become law at any time.
For Employees Above the Income Threshold
For employees above Vermont's income threshold, courts apply a common law reasonableness standard. Non-competes must:
- Protect a legitimate employer business interest
- Be reasonable in duration and geographic scope
- Be supported by adequate consideration
- Not impose undue hardship on the employee
Vermont courts evaluate the specific facts of each case when determining enforceability.
⚠️ Given Vermont's active legislative environment in 2026, employers and employees should both stay current on the status of pending non-compete legislation. What is legal today in Vermont could change significantly in the near future.
Consideration in Vermont
Vermont requires adequate consideration for a non-compete to be enforceable. Employment at hire is the strongest form. Mid-employment agreements should be supported by additional benefit beyond merely continuing employment.