Non-Compete Enforceability by State: The Current U.S. Landscape

Ask whether non-compete agreements are enforceable in the United States, and the honest answer is: it depends entirely on which state you're standing in. There is no federal non-compete law today — a rule that would have created one was finalized, then struck down, then formally abandoned. In its absence, the fifty states have gone in sharply different directions: a handful now void non-competes almost entirely, a growing group bans them only below a wage threshold, and the rest still apply a case-by-case reasonableness test that can uphold or kill the exact same clause depending on how it's drafted. This guide maps that current landscape — not a rewrite of the general worldwide explainer, but the specific, fast-moving U.S. state-by-state picture as it stands today.

States That Void Non-Competes Outright

Four states currently treat employee non-competes as void as a matter of course, with only narrow exceptions:

• California has the strictest and most closely watched rule. Business and Professions Code §16600 voids nearly all employee non-competes, and two 2023 laws sharpened it further: AB 1076 required employers to notify current and former employees by February 14, 2024 that any non-compete clause in their contract was void, and SB 699 reaches beyond California's own borders — it voids a non-compete against a California employee regardless of where or when the agreement was signed, and creates a private right of action letting an employee sue an employer that tries to enforce one, with damages, injunctive relief, and attorney's fees available to a prevailing employee.
• North Dakota (N.D. Cent. Code §9-08-06) and Oklahoma (15 Okla. Stat. §219A) have voided employment non-competes for decades, each with narrow exceptions tied to selling a business or dissolving a partnership; Oklahoma additionally allows a narrow non-solicitation restriction on a former employer's established customers.
• Minnesota banned non-competes effective July 1, 2023 (Minn. Stat. §181.988), for contracts entered into on or after that date — the ban is not retroactive, so a Minnesota non-compete signed before mid-2023 may still be analyzed under the state's older reasonableness rules.

Washington State will become the newest member of this group, but not yet: Governor Bob Ferguson signed a sweeping, retroactive ban (ESHB 1155) on March 23, 2026, that voids virtually all non-competition covenants, including "customer non-servicing" and forfeiture-for-competition clauses — but it does not take effect until June 30, 2027, with employer notice obligations following on October 1, 2027. Until that date, Washington's existing wage-threshold rule (below) continues to apply.

Wyoming enacted a 2025 law that is often lumped in with the outright bans but is meaningfully narrower: effective July 1, 2025, it voids most non-competes going forward, but non-competes remain enforceable for "executive and management personnel" and their professional staff, and for agreements tied to a business sale; physician non-competes are void outright as a separate rule. A Wyoming non-compete is not automatically dead the way a California one is — whether it survives depends heavily on the employee's role.

A Common Misconception: Montana

Montana's restraint-of-trade statute (Mont. Code Ann. §28-2-703) uses language superficially similar to California's void-non-compete rule, which leads some summaries to mistakenly group Montana with the ban states. It shouldn't be. Since a mid-1980s shift in its case law, the Montana Supreme Court has permitted reasonable non-competes, putting Montana much closer to the common-law reasonableness states discussed below than to the four true "void" states above.

Wage-Threshold States: Banned Below a Number, Allowed Above It

A separate and growing category doesn't ban non-competes across the board — it bans them only for employees earning below a specific wage, on the theory that lower-paid workers have the least bargaining power and the least access to the kind of trade secrets a non-compete is meant to protect. These thresholds are typically adjusted every year, so any dollar figure is a snapshot, not a permanent rule:

• Colorado voids non-competes for workers earning below its state-adjusted threshold (set at $130,014 for 2026), with a separate, lower threshold for non-solicitation-only agreements (60% of the same figure).
• Illinois, under the Freedom to Work Act, sets separate thresholds for non-competes ($75,000 for 2026) and non-solicitation agreements ($45,000 for 2026), with both figures scheduled to keep rising in stages through 2037.
• Oregon voids non-competes below its own annually indexed threshold ($116,427 for 2026).
• Washington, D.C. bars non-competes below a general threshold ($162,164 for 2026) with a materially higher figure for "medical specialists" ($270,274 for 2026), both adjusted annually, and requires written disclosure of the restriction no later than when the job offer is accepted.
• Washington State, until its full 2027 ban takes effect, currently voids non-competes below its own state threshold, adjusted annually.
• Several other states — including Maine, Rhode Island, Virginia, and Maryland — also apply their own wage-based thresholds, each set at a different figure and adjusted on its own schedule; because these numbers move every year and differ meaningfully by state, check the current figure with the relevant state labor agency rather than relying on a number printed in any general guide, including this one.

Two states take a related but different approach rather than a flat dollar figure. Massachusetts's Noncompetition Agreement Act doesn't set a wage floor at all — instead it requires "garden leave" pay (at least 50% of the employee's highest annualized base salary from the prior two years, paid throughout the restricted period) or other mutually agreed consideration, caps most non-competes at one year, and requires ten days' written notice before an employer tries to enforce one after termination. Nevada doesn't use a dollar threshold either — it bans non-competes for employees paid solely on an hourly basis, limits enforcement following a layoff to the severance period, and shifts attorney's fees onto an employer that tries to enforce a non-compete a court finds void.

The Federal Rule That Rose and Fell

For a period, it looked like all of this state-by-state variation might become moot. The Federal Trade Commission finalized a rule on April 23, 2024 that would have banned most non-competes nationwide, regardless of state law. It never took effect. A federal court in Ryan LLC v. FTC vacated the rule nationwide on August 20, 2024, holding the FTC lacked the statutory authority to issue it. The FTC initially appealed to the Fifth Circuit, but under new leadership the Commission reversed course: on September 4, 2025, it voted to drop the appeal and formally accede to the vacatur, and in February 2026 the rule was formally removed from the Code of Federal Regulations. As of today, there is no federal non-compete rule in effect, in any form — the FTC has instead said it will pursue non-competes case by case under its existing authority rather than through a blanket rule, and a separate bill in Congress (the Workforce Mobility Act) that would restrict non-competes by statute remains stalled in committee. Non-compete law, for now, is exactly what it was before 2024: a matter of state law, state by state.

Everywhere Else: The Common-Law Reasonableness Test

In the roughly two dozen states without a ban or a wage threshold, courts fall back on the traditional common-law test: a non-compete is enforceable only if it protects a legitimate business interest — trade secrets, confidential information, or genuine client relationships, not simply the avoidance of ordinary competition — and is reasonable in geographic scope, duration, and the activities it restricts. A restriction covering a wider territory than the employer actually operates in, or lasting longer than necessary to let the interest fade (commonly two years or less, though this varies), is vulnerable to challenge even in a state with no statutory ban at all.

States differ sharply on what happens when a court finds a clause overbroad. Some states — commonly cited as Florida and Texas — will "blue-pencil" the clause, narrowing an overreaching restriction to something reasonable and enforcing what's left, which is more favorable to employers drafting cautiously. Other states — commonly cited as Arkansas, Georgia, Nebraska, Virginia, and Wisconsin — decline to rewrite an unreasonable clause at all and instead void it in its entirety, a "red pencil" approach that puts far more pressure on getting the original drafting right. Because this split is decided by each state's case law rather than a single national rule, an employer operating across several of these states cannot assume the same non-compete language will be treated the same way in each one.

A Fast-Moving Area of Law

Non-compete law is one of the most legislatively active corners of U.S. employment law: trackers such as Beck Reed Riden's widely cited 50-state non-compete survey counted roughly 101 non-compete bills pending across 34 states as of early 2026. Several states enacted new restrictions in just the first half of 2026 alone — Tennessee added a $70,000 wage floor effective July 1, 2026, and Louisiana barred non-competes for interns and apprentices effective August 1, 2026. A significant share of recent state activity specifically targets non-competes for physicians and other licensed healthcare workers, a sector where several states have moved to restrict or ban them even while leaving the general rule for other employees unchanged. Given this pace of change, treat every figure and rule in this guide as accurate as of its publication date, and confirm the current rule in the specific state that matters to you before signing or enforcing anything.

Sources & Further Reading

• Cal. Bus. & Prof. Code §§16600, 16600.1, 16600.5; California AB 1076 and SB 699 (2023)
• N.D. Cent. Code §9-08-06; 15 Okla. Stat. §219A; Minn. Stat. §181.988; Wyoming SF 107 (2025); Washington ESHB 1155 (2026)
• Colo. Rev. Stat. §8-2-113; Illinois Freedom to Work Act (820 ILCS 90); Or. Rev. Stat. §653.295; D.C. Ban on Non-Compete Agreements Amendment Act
• Federal Trade Commission, non-compete rule rulemaking docket and September 2025 accession to vacatur; Ryan LLC v. FTC, N.D. Tex. (2024)
• Beck Reed Riden LLP, 50-State Noncompete Survey (updated periodically)

Practical Next Steps

Start by identifying which category your state falls into — outright ban, wage threshold, or common-law reasonableness — since that alone determines what question actually matters for your situation. If your state uses a wage threshold, confirm the current figure directly with the state labor agency rather than an older printed source, since these numbers change annually. If you're being asked to sign a new non-compete, or your employer is trying to enforce an existing one, the state-specific rules above are a starting point, not a substitute for a consultation with an employment lawyer licensed in that state, particularly given how quickly this area of law is moving. For the general, worldwide framework this guide builds on, see What Is a Non-Compete Agreement? and, for the related question of when a U.S. dismissal itself is unlawful, At-Will Employment Exceptions in the U.S.: A State-by-State Guide.

This article is general legal information, not legal advice. Non-compete law varies by state and changes frequently — confirm the current rule in the applicable state and consult a lawyer licensed there before signing, relying on, or attempting to enforce a non-compete agreement.