Whether non-competes are enforceable depends almost entirely on which state you’re in, because the federal attempt to ban them is dead. The Federal Trade Commission issued a nationwide ban in April 2024. A federal court in Texas blocked it before it took effect, the FTC withdrew its appeal in September 2025, and the rule was formally removed from the federal regulations in early 2026. That leaves a patchwork. Four states ban most non-competes outright. A growing group restricts them by income. The rest enforce them if they’re “reasonable,” and reasonable means whatever that state’s courts have said it means.
Where non-competes are simply void
California, North Dakota, Oklahoma, and Minnesota prohibit non-competes for most employees by statute. In those states, the clause in your contract is generally unenforceable regardless of how it’s written, with narrow exceptions like the sale of a business. California goes further and bars employers from even asking employees to sign one. Washington has passed a ban that takes effect in 2027. If you work in one of these states, the question isn’t whether the clause is reasonable. It’s whether it exists at all.
States that limit non-competes by pay
A second group allows non-competes only above an income threshold. Illinois, Colorado, Oregon, Virginia, Maryland, and Washington all use some version of this approach, with thresholds that adjust over time. Below the line, the agreement is void. Above it, courts still apply a reasonableness test. Several of these states also add procedural requirements, such as advance notice before the job starts or a separate signed acknowledgment. Miss a procedural step and the clause can fail even for a high earner.
The reasonableness test everywhere else
In the majority of states, courts ask three questions. Is the restriction no longer than necessary, usually meaning a year or two? Is the geographic area no wider than where the employee actually worked? And does the employer have a legitimate interest to protect, like trade secrets or customer relationships, rather than just a desire to keep you from competing? A two-year, nationwide ban on a regional sales rep will usually fail. A one-year restriction on a senior engineer with access to source code will usually hold. Some states let a judge rewrite an overbroad clause to something enforceable. Others throw the whole thing out.
Are non-competes enforceable after a layoff?
This is where the law is least settled. A handful of states won’t enforce a non-compete against an employee who was terminated without cause. Most will, on the theory that the contract doesn’t distinguish how the employment ended. Some agreements pay “garden leave” during the restricted period, which makes enforcement more likely. Being laid off does not automatically void the clause, though it often makes an employer less inclined to spend money enforcing it.
What enforcement actually looks like
An employer that wants to enforce a non-compete usually sends a cease-and-desist letter first, often to the new employer as well. If that doesn’t work, it seeks an injunction in court. Injunctions require showing likely success on the merits and irreparable harm, and judges scrutinize the clause at that stage. The FTC, meanwhile, still challenges individual agreements it views as unfair under Section 5 of the FTC Act, focusing on broad restrictions imposed on lower-wage workers. The NLRB has taken the position that some non-competes interfere with organizing rights. Neither is a defense you can raise yourself, but both shape how aggressively employers push.
The bottom line
Non-competes are enforceable in most states if they’re narrow and protect a real business interest, unenforceable in four states regardless of drafting, and subject to income floors in a growing list of others. The nationwide ban that would have wiped them out never took effect. The clause in your contract may be worthless or it may be binding, and the only way to know is to read it against the law of the state where you actually work.
Frequently asked questions
No. A federal court blocked the 2024 rule before it took effect, the FTC withdrew its appeal in September 2025, and the rule was removed from federal regulations in early 2026.
California, North Dakota, Oklahoma, and Minnesota prohibit non-competes for most employees by statute. Washington has passed a ban that takes effect in 2027.
Courts look at whether the duration is short, typically one to two years, whether the geography matches where you worked, and whether the employer has a legitimate interest like trade secrets or customer relationships.
In most states yes, though a few will not enforce one against an employee terminated without cause. A layoff often makes an employer less inclined to spend money enforcing it.
A non-compete restricts where you can work. A non-solicitation clause only bars you from approaching specific customers or coworkers, and courts enforce it more readily.
Some states require something extra in return, such as a raise or promotion, for a mid-employment agreement. Others treat continued employment as enough.
Courts often apply the law where you actually work, especially when the named state would allow something your home state bans. Several states void such clauses outright.
Often yes. Employers regularly narrow the time, geography, or scope, or release it entirely at separation, particularly as part of a severance discussion.
Expect a cease-and-desist letter, sometimes sent to your new employer too, and possibly a court request to stop you from working. Damages and attorney fees can follow.
They can, and courts apply similar reasonableness rules. Some state statutes cover contractors explicitly, while others reach only employees.
Keep reading: Employment and labor attorneys · Business and corporate litigation attorneys
Ready to meet your legal match?
Right case, right lawyer, zero awkward first dates. Tell us what happened and we’ll introduce you to attorneys who actually fit.
Get MatchedThis article is general information about non-compete agreements and is not legal advice. Laws differ by state and change over time, and the facts of your situation matter. For guidance on your own circumstances, consult a licensed attorney in your state.