Other New England states have guardrails to protect workers from noncompetes. Why can’t RI?

In early 2021, CVS sued a former executive who had taken a job with Cigna in Washington state, arguing his move violated a one-year noncompete and threatened CVS’s confidential Medicare Advantage strategy. The agreement defined “restricted area” as not only the entire United States, but anywhere in the world where CVS does business. CVS asked a court to stop its former chief Medicare officer from working in major parts of his field for a year on the other side of the country. A Rhode Island federal judge transferred the case to Seattle, citing a lack of personal jurisdiction. A Washington judge later denied CVS’s request for a restraining order. 

CVS still had options to keep fighting — but the process itself was already the point: Even when a noncompete doesn’t earn emergency court backing, it can still impose risk and cost on the worker.

That’s the modern noncompete in Rhode Island: less a trade-secret shield than a pressure tool. These clauses are sold as protection for confidential information, but in practice they often land on workers who have neither secrets nor bargaining power, and who are least able to call a lawyer when something feels off. That has an effect on any economy, but in a small state with a small labor market, each missed opportunity matters that much more.

Rhode Island courts say a noncompete must be “reasonable” in scope, activity, time, and geography, but that word does a lot of work. A key Rhode Island Supreme Court decision, Durapin, Inc. v. American Products, Inc. (1989), allows judges to narrow an overly broad restriction rather than throw it out entirely. The result is a foggy incentive structure where employers can write agreements aggressively, and workers are left guessing where the line really is.

And that uncertainty isn’t neutral. Most employees can’t afford a drawn-out legal fight, so employers rarely need to prove much. Even a clause that might be unenforceable in court can still deter someone from taking a better job offer because the risk is front-loaded on the worker: legal fees, stress, and the chance of getting hit with an emergency court filing at the worst possible moment.

Woonsocket-based CVS has its own litigation that shows how the leverage works. In Saban v. Caremark Rx, a court refused to accept a definition of “competition” so broad it would effectively bar an employee from working “in any capacity” for a competitor. In a separate case involving a senior executive, CVS did win an injunction by focusing on specific confidential information and a tailored restriction in CVS Pharmacy, Inc. v. Lavin, showing that it can draw a line. The bigger point is that these contracts aren’t about who wins, but who can afford to litigate long enough to find out.

Even when the law is unclear or a contract is shaky, the contract can still change behavior simply because it’s there. A study on unenforceable restrictive contracts found that noncompetes are associated with reduced job mobility even in places where they may not be enforceable because workers don’t want to or can’t test the limits. 

Rhode Island also stands out in New England for how much it leaves to inertia. Connecticut courts have used a multi-factor reasonableness test for decades, dating back to Scott v. General Iron & Welding Co. (1976), weighing legitimate business interests against hardship to the employee. The Maine Legislature drew a bright red line: A statute that bars noncompetes for workers earning at or below 400% of the federal poverty level. New Hampshire similarly makes noncompetes void for low-wage employees. New York, meanwhile, has issued plain-language consumer guidance emphasizing that courts enforce noncompetes only in narrow circumstances and generally require them to be reasonable. 

Against that backdrop, Rhode Island’s status quo looks less like a deliberate policy choice and more like drift. Last year, Gov. Dan McKee vetoed legislation sponsored by Rep. Jacquelyn Baginski, a Cranston Democrat, and Sen. Matthew LaMountain, a Warwick Democrat, that would have sharply limited noncompetes. McKee argued it would make Rhode Island “an outlier compared to other states.” But the region already has multiple guardrails: Rhode Island is already the one that is an outlier in ambiguity. 

Noncompetes also undercut the market logic invoked to justify them. When a software engineer, nurse, or pharmacist can’t move without risking a legal threat, the labor market stops functioning like it should. Wages flatten, hiring gets sticky, and talent drains to places with clearer rules. Nationally, the Federal Trade Commission has repeatedly argued that restricting noncompetes would raise wages and increase new business formation. The attempted nationwide ban was blocked in court, but that doesn’t mean that Rhode Island has to be victimized by the same contracts that cost Americans $300 billion a year. 

The question, then, isn’t whether Rhode Island must ban every noncompete tomorrow. It’s whether the state should keep tolerating agreements that rely on uncertainty to do their work. 

Rhode Island could follow Maine and tie enforceability to income thresholds. Or it could follow Connecticut and codify a reasonableness test with clearer, measurable criteria so workers and employers can predict what will happen before someone gets a threatening letter.

Right now, only an illusion of choice lives in the fine print of these employment contracts, but Rhode Island doesn’t have to keep protecting it.