Non-compete agreements live in a patchwork of state law that shifted dramatically between 2024 and 2026. After the FTC announced a federal ban in April 2024, federal courts vacated the rule within months, and the agency dropped its appeal in September 2025. State law is once again the only framework that governs enforceability, and the answer depends entirely on where the employee works. For employers with multi-state operations, the result is a compliance puzzle: the same clause enforceable in Florida is unenforceable in California, and even states that allow non-competes increasingly limit them by salary threshold or industry.
What Non-Competes Typically Restrict A standard non-compete prohibits a departing employee from working for competitors, starting a competing business, or soliciting customers and coworkers within a defined geographic area and time window. Restrictions commonly run 6 to 24 months and cover a specific competitive market rather than a whole industry.
Courts weigh three factors when deciding whether a restriction is reasonable: geographic scope, duration, and the legitimate business interest being protected. Over-broad non-competes (global restriction, five years, protects nothing specific) get struck down or judicially narrowed in nearly every state that still enforces them.
Which States Refuse to Enforce Non-Competes California, Minnesota, Oklahoma, and North Dakota refuse to enforce non-competes in most employment contexts. California's ban is the strongest: under a 2024 statute, the state voided existing non-competes and required employers to notify affected workers. Colorado, Illinois, Washington, Oregon, and Massachusetts permit non-competes only above specific salary thresholds, most of which reset annually with inflation.
What About Non-Solicitation Clauses? Non-solicitation clauses, which restrict soliciting customers or coworkers without barring employment with a competitor, are enforceable in more states than true non-competes. California still restricts customer non-solicitation clauses, but courts in most other states enforce narrow, time-limited versions. For employers worried about losing key talent or client relationships, non-solicitation is often a more defensible alternative.
The 2026 Enforceability Map Employers using a single standard non-compete template nationwide face real risk. A clause enforceable in Texas is void in California. A clause enforceable against executives in Massachusetts is unenforceable against the same role paid under the state's $75,000 threshold. The practical fix is state-specific templates that match local law, paired with a review every time an employee moves or the company opens in a new state.
Courts in states that permit non-competes are also increasingly willing to strike the whole clause rather than judicially modify it down to something reasonable. The drafting tolerance that existed a decade ago is much narrower now.
Drafting a Non-Compete Agreement That Holds Up in 2026 Write state-specific templates. Tie the restriction to a legitimate interest you can articulate in one sentence (protecting trade secrets, protecting customer relationships built at company expense, not just preventing competition). Keep duration short (6 to 12 months covers most legitimate interests). Narrow the geographic scope to the actual competitive market. Provide consideration beyond continued employment in the states that require it. Review the FTC's vacated rule record for historical context, but focus compliance work on state law. Pair the non-compete with a clear employee handbook section so employees understand the restrictions before they sign, and keep at-will employment language aligned so the two documents don't contradict each other.
.svg)
.svg)
