Valvoline agrees to drop noncompete agreements in settlement with 6 state attorneys general

Nearly 300 current and former Valvoline employees in Minnesota will be affected by the settlement ending the use of noncompete agreements at the chain. Photo by Max Nesterak/Minnesota Reformer.

Oil change chain Valvoline agreed to drop noncompete agreements with hourly workers as part of a settlement agreement with Minnesota Attorney General Keith Ellison and a coalition of five other state attorneys general.

Valvoline required its hourly workers to sign noncompete agreements that barred them from performing oil changes for another company within 100 miles of their Valvoline location for one year after leaving the company. The company also required workers to agree not to solicit other employees or customers for one year after leaving Valvoline.

“Far too many employers use overbroad non-compete agreements to stifle competition, keep wages low, and treat workers unfairly,” Ellison said in a statement announcing the settlement on Wednesday.

In a statement, the company said it already stopped using noncompete agreements in 2021: “We believe all employees should be able to seek opportunities that grow their careers.”

A spokesman for Ellison’s office said that change came shortly after their office reached out to the company in December 2020 as part of an investigation into the company’s use of the contract provisions.

“It is often the case that businesses stop unlawful activities or business practices once they know they are under investigation due to those practices,” said Brian Evans, press secretary for the Minnesota Attorney General’s Office.

Businesses argue they need noncompete agreements to protect valuable trade secrets and client lists, but the agreements have become commonplace, and hindered the freedom of about one in five American workers , ranging from fast food workers to doctors to car mechanics.

In 2023, Minnesota lawmakers banned noncompete agreements, except as part of a business sale agreement. The Federal Trade Commission followed suit with a nationwide ban in April . In announcing the new rule, which now faces legal challenges , the FTC estimated the ban would generate over 8,500 new businesses and increase earnings for the average worker by $524 per year by giving workers unfettered freedom to seek out higher wages.

As part of the settlement agreement , Valvoline must notify all its current and employees who left the company in the last year that the noncompete and nonsolicitation agreements are no longer in effect. Ellison’s office says the settlement affects nearly 300 workers.

If Valvoline violates the terms of the agreement, the attorney general may seek a $500,000 penalty.

Joining Ellison were New York Attorney General Letitia James, who led the coalition, and the attorneys general of Colorado, Illinois, Maryland, Massachusetts and Pennsylvania.

*This story was updated with comment from Valvoline.