Proposed Change in Nevada Law on Employee Non-Compete Provisions

Nevada law, unlike the law in many other states, has historically permitted employers to have enforceable non-compete provisions in employment agreements. Such non-compete provisions restrict an employee’s ability to work, after leaving a job, in the same occupation in a geographic area that must be reasonably defined for a finite period of time. Currently pending in the 2021 Nevada Legislature is Assembly Bill No. 47 that, if passed, limits the ability to have such agreements. The summary of the proposed Act is: “AN ACT relating to unfair trade practices; requiring certain notice be provided to the Attorney General before the consummation of certain mergers and acquisitions; making it unlawful to enter into certain agreements which restrain a natural person from engaging in a lawful profession, trade or business; providing that certain provisions in certain agreements or policies related to health care are void and unenforceable unless approved by the Attorney General; prescribing procedures and criteria for obtaining such approval; revising provisions relating to proceedings instituted by the Attorney General under the Nevada Unfair Trade Practice Act; providing penalties; and providing other matters properly relating thereto.” While it is presently unclear if Assembly Bill No. 47 may eventually become law, the pending legislation is a reminder that laws that impact businesses often change.