Noncompete Agreements in the United States: A Current State-by-State Issue

Two years ago, employers across the country were preparing to tear up their noncompete agreements. The Federal Trade Commission had adopted a rule banning nearly all of them nationwide. That rule never took effect: a federal court set it aside in August 2024, the FTC abandoned its appeal in September 2025, and the rule was formally removed from the Code of Federal Regulations in February 2026.

So as of August 2026, there is no federal noncompete ban — and there is no single American answer to whether your noncompete is enforceable. The answer depends almost entirely on which state's law applies, and the state map has been redrawn repeatedly since 2023. Here is where things actually stand.

What a noncompete is — and what it is not

A noncompete restricts a worker, after leaving a job, from working for competitors or starting a competing business, typically within a defined territory and time period. It is one member of a family of restrictive covenants that also includes non-solicitation clauses (don't poach customers or coworkers), confidentiality agreements, and training-repayment provisions.

The distinctions matter because states that restrict noncompetes often still allow narrower tools. An employer that cannot enforce a noncompete may still protect its confidential information through NDAs and through the law described in our guide to trade secret protection. Most state statutes also carve out noncompetes signed in connection with the sale of a business.

The rise and fall of the FTC rule

1. April 23, 2024 — Rule adopted. The FTC voted to ban nearly all new noncompetes and render most existing ones unenforceable, with a narrow exception for senior executives' existing agreements. The effective date was set for September 4, 2024.
2. August 20, 2024 — Rule set aside. In Ryan, LLC v. FTC, the U.S. District Court for the Northern District of Texas held the rule exceeded the agency's statutory authority and was arbitrary and capricious, and set it aside nationwide before it ever took effect.
3. September 2025 — Appeal abandoned. Under new leadership, the Commission voted to dismiss its appeals and accede to the vacatur; the Fifth Circuit dismissed the appeal in early September 2025.
4. February 2026 — Rule removed. The FTC formally removed the noncompete rule from the Code of Federal Regulations, effective February 12, 2026, closing the chapter.
5. Ongoing — Case-by-case enforcement. The FTC's noncompete enforcement page reflects its current approach: targeting specific noncompetes it considers unfair methods of competition — especially broad restrictions on rank-and-file workers — rather than banning the practice wholesale.

States that ban noncompetes outright

Five states now void most employment noncompetes regardless of pay, and a sixth is scheduled to join them:

• California — the oldest and broadest ban, with recent legislation adding penalties for employers who try to impose or enforce void covenants, even ones signed out of state.
• North Dakota and Oklahoma — longstanding statutory bans with narrow sale-of-business exceptions.
• Minnesota — banned noncompetes for agreements entered on or after July 1, 2023.
• Wyoming — a 2025 law voids most noncompetes signed on or after July 1, 2025, with exceptions for executive and management personnel, trade-secret protection, and business sales.
• Washington — legislation signed March 23, 2026 replaces the state's salary-threshold system with a near-total ban on noncompetes effective June 30, 2027, and it is written to reach existing agreements, not just new ones.

Salary-threshold and partial-restriction states

The largest group of reform states allows noncompetes only for workers above an earnings line, on the theory that low- and mid-wage workers lack bargaining power. Because most thresholds adjust annually, treat these 2026 figures as a snapshot:

Whether a worker is overtime-eligible — the trigger in Rhode Island and Virginia — depends on the exemption rules explained in our wage and hour law guide. Other states add procedural guardrails instead of dollar lines: Massachusetts requires garden-leave pay or other consideration and caps duration, while several states (Maine, Massachusetts, Washington pre-ban, Colorado, Illinois) require advance written notice before or at the job offer.

Outliers: Florida's CHOICE Act and industry-specific rules

Not every state is tightening. Florida's CHOICE Act, effective July 1, 2025, moved the other way for high earners: for covered employees making more than about twice the annual average wage of their county, qualifying agreements are presumed enforceable, extended durations are permitted, and the burden shifts to the employee to defeat the covenant.

Meanwhile, a separate trend restricts noncompetes for particular professions — most commonly physicians, nurses, and other health care workers. States including Alabama, Arkansas, Connecticut, Delaware, Indiana, Louisiana, Maryland, Massachusetts, New Mexico, Pennsylvania, Tennessee, and Texas impose health-care-specific limits, several of them enacted in 2025. Employers hiring across state lines face genuine conflict-of-law problems: a covenant valid where the company sits may be void where the employee lives, and states like California invite their residents to sue over out-of-state covenants. These clauses also surface constantly in exit paperwork, which is why they belong on the review checklist in our article on severance agreements.

Frequently asked questions

Is the FTC noncompete ban in effect?

No. The rule was set aside by a federal court in August 2024 before its effective date, the FTC dismissed its appeal in September 2025, and the rule was removed from the CFR effective February 12, 2026. No federal regulation currently bans noncompetes, though the FTC can still challenge specific agreements case by case.

I signed a noncompete years ago. Which law applies now?

Usually the law of the state with the strongest connection to your employment — often where you live and work — though many agreements contain choice-of-law clauses selecting the employer's state. Some statutes, like California's and Washington's 2027 ban, are written to reach existing or out-of-state agreements. This is a genuinely unsettled area; jurisdiction-specific advice matters.

Can my employer make me sign a noncompete to keep my current job?

In many states, yes, continued employment counts as sufficient consideration — but a growing number disagree or add conditions. Several states require advance notice, and some require new value (a raise, a bonus, garden-leave pay) for midstream covenants. Refusing to sign can be lawful grounds for termination in employment-at-will states, so weigh the tradeoff carefully.

Are non-solicitation and confidentiality agreements affected by these bans?

Mostly no. Ban and threshold statutes typically target noncompetition covenants specifically, while allowing reasonable non-solicits and confidentiality terms — though some states (Illinois, Colorado, D.C.) regulate non-solicits too. Trade secret law protects confidential business information independently of any contract.

Keeping up as the map keeps shifting

The safest assumption in 2026 is that whatever you knew about noncompete law two years ago is partly out of date. Workers evaluating an offer or an exit should identify which state's law applies, check whether a ban or threshold covers them, and never assume a signed covenant is enforceable as written — courts in many states narrow or void overbroad terms. Employers should inventory their agreements by state, watch effective dates (Washington's June 30, 2027 ban most urgently), and consider whether narrower tools would survive scrutiny better than broad noncompetes.

Because thresholds adjust each January and legislatures keep acting, verify current figures with your state's statute or labor agency before relying on them. For adjacent topics — classification, wages, discrimination, and separation — see our employment law hub.

Sources & further reading

• FTC — Press Release: FTC Files to Accede to Vacatur of Non-Compete Clause Rule (Sept. 2025)
• FTC — Noncompete Enforcement Page
• Foley & Lardner — Noncompete Agreements in 2026: A Federal and State Overview
• Littler — Wyoming Bans Non-Compete Covenants with Some Exceptions
• Holland & Knight — Washington State Bans Non-Compete Agreements (2026)