North Carolina House Bill 269, Workforce Freedom and Protect Act (N.C.G.S § 95-275) (the “Act”) went into effect July 1, 2025. This Act prohibits North Carolina employers from entering into, requiring as a condition of employment, or enforcing any non-compete agreement with an employee who earns less than $75,000.00 USD per year. The prohibition applies to noncompete restrictions on time, geographic area, and certain work activities. Any existing noncompete agreements pertaining to employees earning less than $75,000.00 USD per year are, in effect, unenforceable under the Act.

Additionally, the Act prohibits employers from requiring employees who primarily reside or work in North Carolina to agree to a contract provision that would: (1) require the employee to adjudicate outside of this state a claim arising in the state; or (2) deprive the employee from the protection of North Carolina law for a claim arising in this state.  The Act renders such contractual clauses void and unenforceable.

The NC Attorney General has the authority to investigate and bring legal action against any employer in violation of the Act. Employees who file a civil action against the employer for violations of the Act are eligible to recover damages, reasonable attorney fees, and other relief deemed appropriate by a court of law.