Non-compete laws by state (2026): where non-competes are banned, limited or enforceable
The FTC's national non-compete ban was vacated and removed from the Code of Federal Regulations on 12 February 2026, so non-compete enforceability is now set entirely by the states. 4 states void employee non-competes outright, a growing group enforce them only above an income threshold, and most others enforce them if reasonable.
A non-compete is a contract term that limits where an employee can work after they leave. In 2024 the Federal Trade Commission tried to ban most employee non-competes nationwide, but a federal court struck the rule down, the FTC dropped its appeals in September 2025, and the rule was formally removed from the Code of Federal Regulations on 12 February 2026. Enforceability is therefore a matter of state law. Four states, California, Minnesota, North Dakota and Oklahoma, make employee non-competes void. A growing group only allow them above an annual income threshold, such as Washington, Oregon, Illinois and Colorado. Most remaining states enforce a non-compete if it is reasonable in scope, time and geography. Florida moved the other way in 2025, strengthening enforcement for higher earners under its CHOICE Act.
The big picture
The FTC's national non-compete ban was removed from the Code of Federal Regulations on 12 February 2026, leaving enforceability entirely to the states. As of 1 July 2026, 4 states void employee non-competes outright, 16 enforce them only above an income threshold or with significant statutory limits, 1 recently strengthened enforcement, and the rest enforce a non-compete only if it is reasonable.
Position as at 1 July 2026. Source.
Is there still a federal ban on non-competes?
No. The FTC's 2024 rule that would have banned most employee non-competes was struck down by a federal court, the FTC voted in September 2025 to drop its appeals and accept the rule being vacated, and the rule was removed from the Code of Federal Regulations on 12 February 2026. Non-competes are now governed entirely by state law, with the FTC pursuing only case-by-case enforcement.
Which states ban employee non-competes?
Four states make employee non-competes void as a matter of law: California, Minnesota (for agreements entered on or after 1 July 2023), North Dakota and Oklahoma. Some still allow narrower protections, such as reasonable customer non-solicitation in Oklahoma.
What is an income-threshold state?
A growing group of states only enforce a non-compete if the employee earns above a set annual figure, which usually rises each year. Examples for 2026 include Washington (about $126,859), Oregon (about $119,541), Colorado (about $130,014 for the highly-compensated test) and Illinois ($75,000). Below the threshold, the non-compete is void.
How does this work if you hire through an EOR?
When Teamed is your Employer of Record, employment agreements for your US team are issued under the correct state's law, so any restrictive covenants are drafted to what that state actually allows, rather than a template that may be void where the employee works. That keeps agreements enforceable where they can be, and compliant everywhere.
Non-compete by state
51 jurisdictions
| Source | |||||
|---|---|---|---|---|---|
| California | Banned | Void: banned for employees | – | Cal. Bus. & Prof. Code § 16600, 16600.1, 16600.5 | source |
| Minnesota | Banned | Void: banned (agreements on/after 1 Jul 2023) | – | Minn. Stat. § 181.988 | source |
| North Dakota | Banned | Void: banned for employees | – | N.D. Cent. Code § 9-08-06 | source |
| Oklahoma | Banned | Void: banned (customer non-solicit allowed) | – | Okla. Stat. tit. 15 § 219A | source |
| Florida | Strengthened | Strengthened: CHOICE Act (high earners) | 2x county mean wage (covered employees) | Fla. Stat. §§ 542.41–542.45 (CHOICE Act); § 542.335 | source |
| Colorado | Limited | Void unless highly-compensated worker | $130,014/yr (2026) | C.R.S. § 8-2-113 | source |
| District of Columbia | Limited | Void unless highly-compensated ($150k) | $150,000/yr ($250k medical specialists) | D.C. Code § 32-581.01 et seq. | source |
| Illinois | Limited | Void below $75,000/yr income threshold | $75,000/yr (2026) | 820 ILCS 90 (Freedom to Work Act) | source |
| Louisiana | Limited | Void unless statutory carve-out met; 2-yr cap | 2-year cap; parishes/municipalities named | La. Rev. Stat. § 23:921 (physician limits per Act 273, 2024) | source |
| Maine | Limited | Void at/below $63,840/yr (400% FPL) | $63,840/yr (2026) | Me. Rev. Stat. tit. 26 § 599-A | source |
| Maryland | Limited | Void below wage threshold (150% min wage) | $49,920/yr (2026) | Md. Code, Lab. & Empl. § 3-716 | source |
| Massachusetts | Limited | Limited: garden leave; no FLSA non-exempt | Non-exempt excluded | Mass. Gen. Laws ch. 149 § 24L | source |
| Nevada | Limited | Limited; banned for hourly-only workers | Hourly-only barred | Nev. Rev. Stat. § 613.195 | source |
| New Hampshire | Limited | Void for low-wage (up to 200% min wage) | $30,160/yr (2026) | N.H. Rev. Stat. § 275:70-a | source |
| Oregon | Limited | Void unless above income threshold | $119,541/yr (2026) | Or. Rev. Stat. § 653.295 | source |
| Rhode Island | Limited | Void for low-wage (250% FPL) & non-exempt | $39,900/yr (2026) | R.I. Gen. Laws § 28-59-1 et seq. | source |
| Tennessee | Limited | Void below $70,000/yr (eff 1 Jul 2026) | $70,000/yr (from 1 Jul 2026) | Tenn. Code Ann. § 50-1-701 et seq. (HB 1034) | source |
| Utah | Limited | Reasonable; 1-yr statutory cap | 1-year max | Utah Code § 34-51-101 et seq. | source |
| Virginia | Limited | Void for low-wage & overtime-eligible (2025) | $78,364.52/yr (2026) | Va. Code § 40.1-28.7:8 | source |
| Washington | Limited | Void unless above income threshold | $126,858.83/yr (2026) | Wash. Rev. Code § 49.62 | source |
| Wyoming | Limited | Banned with exceptions (eff 1 Jul 2025) | Exec/mgmt & sale-of-business carve-outs | Wyo. Stat. § 1-23-108 (SF 107) | source |
| Alabama | Enforceable | Enforceable if reasonable (statute) | – | Ala. Code § 8-1-190 et seq. | source |
| Alaska | Enforceable | Enforceable if reasonable (common law) | – | Common law (Data Mgmt. v. Greene, 757 P.2d 62) | source |
| Arizona | Enforceable | Enforceable if reasonable (common law) | – | Common law (disfavored, strictly construed) | source |
| Arkansas | Enforceable | Enforceable if reasonable (statute) | – | Ark. Code § 4-75-101 | source |
| Connecticut | Enforceable | Enforceable if reasonable; physician limits | – | Conn. Gen. Stat. § 20-14p (physicians, APRNs, PAs); common law | source |
| Delaware | Enforceable | Reasonable; physician non-competes void | – | 6 Del. C. § 2707 (physician non-competes void); common law | source |
| Georgia | Enforceable | Enforceable if reasonable (RCA statute) | – | O.C.G.A. § 13-8-50 et seq. | source |
| Hawaii | Enforceable | Reasonable; banned for tech workers | – | Haw. Rev. Stat. § 480-4(d) (tech-worker ban); common law | source |
| Idaho | Enforceable | Enforceable if reasonable (statute) | – | Idaho Code § 44-2701 et seq. | source |
| Indiana | Enforceable | Reasonable; physician limits (2025) | – | Ind. Code § 25-22.5-5.5 (physicians); common law | source |
| Iowa | Enforceable | Enforceable if reasonable (common law) | – | Common law (three-factor reasonableness test) | source |
| Kansas | Enforceable | Enforceable if reasonable (common law) | – | Common law (reasonable, not adverse to public welfare) | source |
| Kentucky | Enforceable | Enforceable if reasonable (common law) | – | Common law (reasonable; consideration required) | source |
| Michigan | Enforceable | Enforceable if reasonable (statute) | – | Mich. Comp. Laws § 445.774a | source |
| Mississippi | Enforceable | Enforceable if reasonable (common law) | – | Common law (Frierson v. Sheppard Building Supply) | source |
| Missouri | Enforceable | Enforceable if reasonable (common law) | – | Mo. Rev. Stat. § 431.202; common law | source |
| Montana | Enforceable | Reasonableness read into statute; not a ban | – | Mont. Code Ann. § 28-2-703 to -705 | source |
| Nebraska | Enforceable | Enforceable if reasonable (common law) | – | Common law (no reformation of overbroad covenants) | source |
| New Jersey | Enforceable | Enforceable if reasonable (common law) | – | Common law (Solari/Whitmyer test) | source |
| New Mexico | Enforceable | Reasonable; healthcare-worker limits | – | N.M. Stat. § 24A-4-1 et seq. (healthcare); common law | source |
| New York | Enforceable | Enforceable if reasonable (common law) | – | Common law (BDO Seidman v. Hirshberg) | source |
| North Carolina | Enforceable | Enforceable if reasonable (common law) | – | Common law; N.C.G.S. § 75-4 (must be in writing) | source |
| Ohio | Enforceable | Enforceable if reasonable (common law) | – | Common law (Raimonde v. Van Vlerah, 42 Ohio St.2d 21) | source |
| Pennsylvania | Enforceable | Reasonable; healthcare-practitioner limits | – | Common law; Act 74 of 2024, 63 P.S. § 3501 et seq. (healthcare, eff. 1 Jan 2025) | source |
| South Carolina | Enforceable | Enforceable if reasonable (common law) | – | Common law (strictly construed; no blue pencil) | source |
| South Dakota | Enforceable | Reasonable; 2-year statutory cap | 2-year statutory cap | S.D. Codified Laws § 53-9-11 | source |
| Texas | Enforceable | Enforceable if reasonable (statute) | – | Tex. Bus. & Com. Code § 15.50–15.52 | source |
| Vermont | Enforceable | Enforceable if reasonable (common law) | – | Common law | source |
| West Virginia | Enforceable | Enforceable if reasonable (common law) | – | Common law | source |
| Wisconsin | Enforceable | Enforceable if reasonable (statute) | – | Wis. Stat. § 103.465 | source |
Frequently asked questions
Did the FTC ban non-competes?
It tried. The FTC finalised a rule in 2024 to ban most employee non-competes, but a federal court set it aside, the FTC dropped its appeals in September 2025, and the rule was removed from the Code of Federal Regulations on 12 February 2026. There is no federal ban in force.
Are non-competes enforceable in my state?
It depends on the state. Four states void them for employees, several only enforce them above an income threshold, and most enforce them if reasonable in scope, time and geography. Find your state in the tracker for its current position and the primary source.
What is the difference between a non-compete and a non-solicit?
A non-compete limits where someone can work after leaving. A non-solicit limits their contacting former customers or colleagues. Some states that restrict non-competes still allow reasonable non-solicitation agreements.
Can Teamed handle non-competes for our US hires?
Yes. As the legal employer, Teamed issues employment agreements under the right state's law, so restrictive covenants match what each state allows. Teamed's HR and legal experts can advise on what is enforceable where.
US employment law is set state by state, and it keeps moving. When Teamed is your legal employer, this is our job in every state: compliant offers, postings and policies that meet each state’s rules, so you can hire across the US without setting up 50 payrolls or reading 50 statutes.
