Non-compete agreements for NEMT drivers: what states allow and how to protect your accounts

A non-compete will rarely stop an hourly NEMT driver from starting a van company or driving for a competitor. The FTC’s national ban never took effect, so state law decides, and in the states below a driver non-compete at a typical wage is void or illegal to use. What works instead is a confidentiality agreement, a narrow non-solicitation clause where your state allows one, and accounts that run through the company rather than through one driver. Making drivers repay training costs is a separate question, covered in the training repayment guide.

What a departing driver can actually take

Take an example: a driver who has run the same dialysis and wound care routes for two years buys a used wheelchair van, registers an LLC, and starts calling the facilities and private-pay families they met on your time. The owner reaches for a non-compete. For hourly drivers in the states below, that tool is either void or illegal to use, and the protection worth having comes from somewhere else.

Start by being precise about what can be taken. In brokered Medicaid work, the rider was never yours to keep. MTM’s standard provider agreement (version 01.01.2023, the copy Pennsylvania’s human services department posts) lets MTM give or move any trip, standing orders too, at its sole discretion, and leaves the provider no claim to carry a specific rider or the patients of a specific facility. A former driver who gets credentialed with the same broker can end up with your old regulars without breaking any agreement with you.

What can walk out the door is narrower and more valuable:

• Direct facility relationships. Contracts or standing arrangements with dialysis centers, assisted living communities, hospitals and adult day programs, covered in the facility contracts guide.
• Private-pay riders and families who book you by phone and pay by card.
• The information itself. Rider lists, facility contact sheets, rate sheets and schedules.

North Carolina applies the same limit one level up. Under the state’s NEMT policy for Medicaid managed care, last amended January 1, 2025, a health plan or the broker it hires may not write exclusivity or non-compete terms into a contract with a transportation company.

Is there a federal ban on non-competes?

No. The FTC published a rule on May 7, 2024 that would have made most worker non-competes an unfair method of competition from September 4, 2024. It never took effect. In Ryan, LLC v. FTC, a federal district court in Texas held that the FTC lacked the authority to issue it and set it aside. The Commission voted 3 to 1 on September 5, 2025 to drop its appeals and accept that result, and a final rule published February 12, 2026, effective the same day, removed the regulation from the Code of Federal Regulations.

That leaves state statutes and state courts. The statutes below aim most squarely at low-wage, hourly workers, which describes most drivers. Federal occupation data files NEMT drivers under shuttle drivers and chauffeurs, and O*NET puts that group’s 2025 median at $17.93 an hour, or $37,290 a year.

State rules that reach hourly drivers

Several states void driver non-competes outright or bar them for hourly and overtime-eligible workers. These examples show the range; confirm your own state’s statute before relying on any clause.

• California. Business and Professions Code 16600 voids every contract restraining anyone from a lawful profession, trade or business, and since January 1, 2024 the statute says it must be read to void any employment non-compete, however narrow, that does not fit an exception. Section 16600.1 makes it unlawful to include one or require one, and employers had to tell current employees, and former employees who worked for them after January 1, 2022, by February 14, 2024 that such clauses were void. Section 16600.5 makes such a contract unenforceable wherever it was signed, makes entering or enforcing one a civil violation, and gives the employee a private suit with attorney’s fees.
• Minnesota. Section 181.988 voids non-competes in agreements entered on or after July 1, 2023, with exceptions only for the sale or dissolution of a business. Its definition leaves out nondisclosure agreements, non-solicitation agreements, and agreements restricting use of client lists. An employer also may not require an employee who mainly lives and works in Minnesota to litigate a claim under this law outside the state or give up Minnesota law’s protection for it.
• North Dakota. Century Code 9-08-06 voids contracts restraining anyone from a lawful profession, trade or business, except for sellers of a business’s goodwill and owners at a dissolution or departure.
• Oklahoma. Title 15, section 219A lets a former employee work in the same or a similar business as long as they do not directly solicit sales from the former employer’s established customers, and voids contract terms that conflict. Section 219B allows clauses barring a worker from recruiting the company’s employees.
• Virginia. Code 40.1-28.7:8 bars any employer from entering, enforcing, or threatening to enforce a non-compete with a low-wage employee. That term covers anyone whose average weekly earnings fall below the Commonwealth’s average weekly wage, and anyone entitled to federal overtime regardless of pay, so an hourly driver who earns overtime is covered however much they make. A 2026 amendment (Chapter 883) adds a rule for every employee, whatever the pay. For covenants signed, amended or renewed on or after July 1, 2026, a non-compete cannot be enforced against someone fired without cause unless the employer pays severance or another sum disclosed when the covenant was signed. The statute’s definition also says a non-compete may not stop a former employee from serving a customer who comes to them without being contacted or solicited. The Commissioner can impose a $10,000 civil penalty for each violation, and every employer must post the section or an approved summary with its other required notices.
• Nevada. NRS 613.195(3) says a non-compete may not apply to an employee paid solely on an hourly basis, tips aside. Even where one applies, it cannot stop a former employee from serving a former customer who sought them out without solicitation, and a court that finds either problem must award the employee attorney’s fees.
• Illinois. The Freedom to Work Act (820 ILCS 90) bars a non-compete unless the employee earns more than $75,000 a year ($80,000 from January 1, 2027), and bars a non-solicitation covenant unless the employee earns more than $45,000 ($47,500 from the same date). Either covenant also needs 14 calendar days to review and written advice to consult a lawyer, and an employee who defeats one recovers costs and attorney’s fees.
• Washington. Today RCW 49.62 voids a non-compete unless the employee’s annualized earnings exceed a threshold set each year, $126,858.83 for 2026. Under a 2026 law, every non-compete becomes void on June 30, 2027, whenever it was signed, and employers must make reasonable efforts by October 1, 2027 to tell current and former employees and contractors still covered by one.

Two more states reach drivers directly. Massachusetts makes a non-compete unenforceable against any employee classified as nonexempt under the federal overtime law (chapter 149, section 24L), and Wyoming voids non-competes restricting pay for skilled or unskilled labor in contracts entered on or after July 1, 2025, apart from business sales, trade secrets, and executive and management staff (W.S. 1-23-108). Other states have their own pay floors or limits, and some still enforce non-competes. In the states above, a driver non-compete at a typical wage will not hold. Elsewhere, enforceability turns on the state’s statute and its courts, so have a local lawyer review any clause before a driver signs it.

What protects you instead

Three things protect accounts and rider information better than a non-compete: a confidentiality agreement, a narrow non-solicitation clause where your state allows it, and relationships the company owns.

A confidentiality agreement that names the real assets

Write down what is confidential: rider lists and schedules, facility contacts, rates, and anything a driver sees in the dispatch and trip records. Several of the laws above say so outright. Minnesota, Illinois and Washington exclude confidentiality and trade secret agreements from their non-compete definitions, and Virginia preserves nondisclosure agreements that protect trade secrets and confidential information.

Two federal rules shape the agreement:

• Trade secret status needs effort. Under the Defend Trade Secrets Act, information is a trade secret only if the owner has taken reasonable measures to keep it secret and it gets value from not being generally known (18 U.S.C. 1839). A rider list emailed to every driver’s personal account is hard to call a secret. The act lets the owner of a misappropriated trade secret sue in federal court (18 U.S.C. 1836).
• Include the immunity notice. 18 U.S.C. 1833(b) requires employers to give notice of whistleblower immunity in any contract governing trade secrets or confidential information signed or updated after May 11, 2016. Without it, you cannot recover exemplary damages or attorney’s fees under the act from an employee who never got the notice. A cross-reference to a written reporting policy satisfies the rule.

Rider information carries a second layer. Names, addresses and appointment details are protected health information, and under 45 CFR 164.402 any use or disclosure that the Privacy Rule does not permit counts as a breach unless your own documented risk assessment finds a low probability of compromise. A driver who leaves with a rider list has created a privacy problem for your company, separate from any competition question. A one-page confidentiality pledge covers what staff promise, and the HIPAA guide covers the breach steps.

A narrow non-solicitation clause, where allowed

A clause that bars a departing driver from soliciting the specific facilities and private-pay riders they served is more likely to survive than a ban on driving for anyone. It is still a state-by-state question. Minnesota’s ban leaves it out and so does the Massachusetts definition of a non-compete, Oklahoma’s statute permits a bar on directly soliciting established customers, and Washington’s 2027 text allows one limited to customers the employee built a direct relationship with, lasting no more than 18 months. In Illinois, a driver earning $45,000 a year or less cannot be bound by one, and California’s statute voids restraints on lawful business broadly, so check with a lawyer there before using any version.

Relationships the company owns

The strongest protection is practical. Sign facility agreements in the company’s name, give each facility a dispatch number rather than a driver’s cell, and have an office contact visit key accounts. Private-pay families should book and pay through the company, not through the driver. When the relationship runs through the business, a departing driver has less to take.

Selling the company is the exception

California, Minnesota and North Dakota all keep an exception for selling a business. California’s section 16601 lets a seller of a business’s goodwill, or an owner selling their entire interest, promise the buyer to stay out of a similar business in the area where the company operated. Minnesota and North Dakota keep similar exceptions. That binds the selling owner, not the drivers who stay on, and buyers should price the business accordingly. The rest of a sale, from valuation to closing, is in the sale guide.

A plan for your driver agreements

1. Remove non-competes from hourly driver agreements in states that ban them. In California and Virginia, entering into one is itself a violation that can bring a lawsuit or a civil penalty.
2. Use a confidentiality agreement that lists rider and facility information and includes the 18 U.S.C. 1833(b) notice.
3. Add a narrow non-solicitation clause only where your state allows it, limited to the accounts the driver served and to a set period.
4. Limit access while drivers work, so rider lists stay in the company’s records rather than in personal email and photo rolls.
5. Close out at exit. Collect phones and printed manifests, end access the same day, and remind the driver in writing of the confidentiality terms, as the guide to firing a driver describes.

If the real worry is losing drivers, the driver retention guide covers schedules, pay and the other things that keep them.

Keeping rider details where they belong in HealthRide

Confidentiality starts with limiting who sees what. In HealthRide, each person sees only what their role allows, rider details stay off phone lock screens, and every change is recorded. See how the driver app handles a driver’s day.