Non-Solicitation Agreements in Vermont: Limited but Enforced

Vermont's Common Law Approach

Vermont does not have a specific statute governing non-solicitation or non-compete agreements. The state relies on common law principles, with relatively limited case law compared to its more populous New England neighbors. Vermont courts have addressed restrictive covenants in cases such as Bourne v. Ætna Casualty & Surety Co. and Dyar Sales & Machinery Co. v. Bleiler, applying traditional reasonableness analysis.

Enforceability Factors

Vermont courts evaluate non-solicitation clauses using standard common law criteria:

• Legitimate business interest: The employer must demonstrate the clause protects customer relationships, trade secrets, or confidential information
• Reasonable scope: The restriction must be limited to customers with whom the employee had direct dealings or about whom they possessed confidential information
• Reasonable duration: Vermont courts favor shorter restrictions. One to two years is the range most likely to be upheld
• Not unduly restrictive: The clause cannot prevent the employee from earning a living in their chosen profession
• Supported by consideration: Employment at the time of hiring is generally sufficient consideration

Small-State Considerations

Vermont's small population and tight-knit business community create unique dynamics for non-solicitation disputes:

• Overly broad customer restrictions can effectively prevent an employee from working in their industry within the state
• Courts may scrutinize clauses more closely when the pool of potential customers is inherently limited
• The informal nature of many Vermont business relationships can blur the line between personal and employer-driven customer connections

Red Flags

• Restrictions that cover all customers of the company, which in Vermont's small market could prevent you from working in your field entirely
• Duration exceeding two years
• No clear definition of which customer relationships are covered
• Language broad enough to capture incidental contact
• No new consideration for agreements introduced mid-employment

When to Consult a Lawyer

Consider speaking with a Vermont employment attorney if you are being asked to sign a non-solicitation clause that seems overly broad for Vermont's market, if you are changing employers within a small industry and need to understand your obligations, or if a former employer is threatening enforcement.

This article is for informational purposes only and does not constitute legal advice. Consult a licensed attorney for guidance specific to your situation.