The FTC's 2024 rule banning nearly all non-compete agreements was struck down in court, and on February 12, 2026 the FTC formally removed it from the Code of Federal Regulations. There is no federal non-compete ban. Enforcement now depends primarily on state law, along with where the employee works and the specific terms of the agreement. California, Minnesota, North Dakota, and Oklahoma void nearly all employee non-competes outright. A growing group of states, including Washington, Colorado, Illinois, Massachusetts, Oregon, and Tennessee, only enforce them above a salary threshold. Washington's legislature went further, passing a law that will void existing non-competes retroactively beginning June 30, 2027. Whether a specific agreement holds up now comes down to state law, compensation, and the specific terms, not a federal standard.
Key Takeaways:
Is there a federal ban on non-competes right now? No. The FTC's 2024 rule was vacated in court, the agency dropped its appeal in 2025, and the rule was formally removed from the federal code in February 2026.
Which states ban non-competes outright? California, Minnesota, North Dakota, and Oklahoma treat nearly all employee non-competes as void, regardless of what the agreement says.
What is a salary threshold state? A growing group of states, including Washington, Colorado, Illinois, Massachusetts, Oregon, and Tennessee, only enforce non-competes for employees earning above a set income level.
What is changing soon? Washington passed a law that will void existing non-competes retroactively beginning June 30, 2027, applying the change to agreements already signed.
What should someone do with an existing non-compete? Check the law in the state where the work actually happens, not where the company is headquartered, and talk with an employment attorney before assuming an agreement is either binding or worthless.
Everyone assumed the FTC's non-compete ban was coming. The agency voted for it in 2024. Employers spent the next two years bracing for it, treating it as close to inevitable. Then a federal court blocked the rule before it ever took effect.
The appeal dragged through 2025. Nobody was talking about it anymore. In February 2026, the FTC quietly pulled the rule off the books entirely, and the ban everyone had been bracing for simply stopped existing.
The fight over non-competes didn't end. It just moved somewhere else. States have been legislating around the edges of this question for years, and with the federal option closed off, state law is now where the practical answer lies. The same non-compete, for the same title, at the same company, can be completely void in one state and fully enforceable in the next one over.
That patchwork is the part worth understanding, whether the agreement in question is one an employee signed on their way in or one an employer is drafting for the next hire.
Is There Still a Federal Non-Compete Ban
No. The FTC issued a rule in April 2024 that would have voided nearly all existing employee non-competes and banned new ones nationwide, with a narrow carve-out for senior executives above a set income level. A federal court in Texas blocked the rule in August 2024. The FTC appealed to the Fifth Circuit, then withdrew that appeal in September 2025 rather than continue defending the rule, and the Fifth Circuit formally dismissed the case days later. On February 12, 2026, the FTC published a final action removing the rule from the Code of Federal Regulations entirely. There is nothing left to revive without starting the rulemaking process over from scratch, a timeline Foley & Lardner's 2026 overview of the noncompete landscape lays out in full.
The FTC hasn't stepped away from the issue completely. The agency has continued case by case enforcement, including an April 2026 order requiring a national pest control company to stop enforcing non-compete restrictions against more than 18,000 employees. That kind of targeted action is different from a categorical ban, and it means non-competes remain a live enforcement issue even without one.
Which States Ban Non-Competes Outright
California, Minnesota, North Dakota, and Oklahoma treat virtually all employee non-competes as void, according to a 2026 state-by-state non-compete tracker. If the work happens in one of these states, a signed non-compete generally isn't enforceable no matter how it's written, and an employer trying to enforce one is taking on real legal risk rather than a routine contract dispute.
Which States Only Enforce Non-Competes Above a Salary Threshold
A growing block of states, including Washington, Colorado, Illinois, Massachusetts, Oregon, and Tennessee, allow non-competes but only for employees earning above a set income level. Below that threshold, the agreement typically isn't enforceable even if the employee signed it willingly and the company operates in a state that otherwise permits these clauses. The specific number varies by state and changes periodically, so a threshold that made an agreement enforceable two years ago may no longer clear the bar today.
Most remaining states allow non-competes without an income threshold but require that the terms be reasonable in scope, duration, and geography. A non-compete that blocks someone from working in an entire industry nationwide for five years is a very different legal proposition than one limited to a specific role, a defined region, and twelve months.
What Washington's New Law Signals for Everyone Else
Washington passed a law that will void existing non-competes retroactively beginning June 30, 2027. Employers will be required to notify current and former employees of the change by October 2027. Separate agreements like confidentiality terms, trade secret protections, and properly structured non-solicitation clauses are carved out and remain a different legal category entirely.
Whether other states follow that model is an open question, but the direction has been consistent for several years now. State by state, the trend has moved toward narrower non-compete enforcement, not broader, and employers relying on a single company-wide template are increasingly likely to be enforcing something that only holds up in some of the states where their people actually work.
Hover a state for details. As of mid-2026. No federal non-compete ban is in effect; enforcement depends on state law, the terms of the agreement, and where the employee works.
If You Have a Non-Compete and You're Considering a Move
The state where the employee works can be critical to determining whether a non-compete is enforceable, even when the employer is headquartered elsewhere or the agreement was signed under another state's law. That distinction changes the answer in ways worth walking through directly.
Living in Minnesota, working remotely for a company headquartered in Texas. Take someone living in Minnesota, one of the four states that voids nearly all employee non-competes, working remotely for a company headquartered in Texas, which permits non-competes under a reasonableness standard. If the work is actually performed from Minnesota, a non-compete signed with that Texas employer is generally unenforceable there, even though Texas itself allows non-competes and even though the agreement was signed under Texas's laws. The employee's location can matter more than the employer's when a court evaluates which state's law applies.
Working in Texas now, planning to relocate to Minnesota for a new job. This is where timing matters. Someone working in Texas today, under a non-compete signed there, is likely bound by it for as long as the work is performed in Texas. Once that person relocates and starts working from Minnesota, the same agreement becomes very difficult for the former employer to enforce going forward, since Minnesota courts generally won't apply it to work performed inside the state. The move itself is often what changes the answer, not anything about the agreement changing.
Salary crossing a threshold after signing. In states that use salary thresholds, whether a non-compete is enforceable can depend on the employee's compensation at the relevant time, and the statute may specify how that threshold is calculated. An agreement signed years ago can therefore be affected by later changes in compensation, depending on the state's law.
None of these scenarios are a substitute for reading the actual document. A void non-compete doesn't automatically void everything else in an offer letter. Confidentiality terms, trade secret protections, and non-solicitation clauses are typically separate provisions and often survive even when the non-compete itself doesn't. An employment attorney in the state where the work happens is the only reliable way to get a real answer for a specific situation.
If You're an Employer Managing Agreements Across State Lines
A workforce spread across several states means a single non-compete template almost never produces the same outcome twice. The same clause that holds up for an employee in Texas can be void for a colleague doing the identical job from California, and a company relying on one template to cover both is likely enforcing something real in one state and nothing at all in the other.
Reviewing agreements against the specific state each employee works from, rather than the state on the offer letter or the company's headquarters, is the only way to know which agreements actually hold up.
Overly broad terms carry their own risk beyond simply being unenforceable. Some states penalize employers for writing a non-compete too broadly in the first place, rather than just narrowing it down to something reasonable after the fact. A non-compete covering an entire industry, an unreasonable multi-year term, or a geography far larger than the role justifies is a liability in those states, not a safety net.
Non-solicitation and confidentiality agreements tend to survive legal scrutiny in far more states than a broad non-compete does, which makes them the more durable tool for protecting client relationships and proprietary information when a non-compete itself is unlikely to hold.
Where This Leaves Both Sides
Non-compete law didn't get simpler in 2026. It got more clearly state by state, which means the right answer for any specific agreement depends on where the work happens, what the person earns, and how the agreement is actually written, not on a single federal standard everyone can point to. That's true whether the question is being asked by someone deciding if they can take the next offer or by a company deciding whether its agreements would actually hold up if tested.
This article is general information, not legal advice. A specific non-compete question should go to an employment attorney licensed in the relevant state.
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