Non-Competes: What Actually Happens When You Take the Other Job

You have signed a non-compete, you have a better offer, and the document says you cannot take it. Before you decide what to do, it is worth knowing that the answer is decided almost entirely by which state you live and work in, and that this is one of the few areas of American law where a reform in the last few years has moved decisively in the worker’s favor.

The federal piece is gone, and it is gone in a way that is easy to misread.

The federal ban that never took effect

The FTC finalized a rule in April 2024 that would have banned most non-competes nationwide, treating them as an unfair method of competition under Section 5 of the FTC Act. It never went into force. A federal district court in Texas set it aside nationwide on August 20, 2024 in Ryan LLC v. FTC, holding that the Commission lacked statutory authority to promulgate a competition rule of that scope. The FTC appealed, then reversed course: on September 5, 2025 the Commission voted 3–1 to dismiss its appeals and accept the vacatur, and the rule was formally removed from the Code of Federal Regulations effective February 12, 2026.

So there is no federal ban. Two things follow that are frequently missed:

• State law is not just the fallback — it is the whole answer. Enforceability now turns on your state’s statute and case law, your income, your occupation, and where you actually live and work.
• The FTC is not out of the picture. Losing a nationwide rule changed its tool from a blanket ban to case-by-case enforcement. In April 2026 the Commission issued a complaint and accepted a proposed consent order requiring Rollins, Inc., the pest-control company, to stop enforcing non-competes against more than 18,000 employees nationwide, and sent warning letters to 13 other pest-control employers. That order became binding when the Commission approved it on June 22, 2026. An unusually broad covenant can still draw federal attention even with no rule on the books — but the remedy now arrives case by case, months at a time, rather than as a rule that voids everything at once.

The four states where it usually does not matter

Four states void nearly all employee non-competes:

• California. Business & Professions Code § 16600 has long voided restraints on a lawful profession, and Edwards v. Arthur Andersen (2008) confirmed it voids employee non-competes even if narrowly drawn, unless a statutory exception applies. Two amendments effective January 1, 2024 went further: § 16600.1 makes it unlawful to include a non-compete in an employment agreement at all, and § 16600.5 provides that a void non-compete is unenforceable “regardless of where and when the contract was signed” — plus a private right of action for injunctive relief, actual damages, and attorney’s fees.
• Minnesota. Non-competes entered into on or after July 1, 2023 are void for employees and independent contractors, with narrow exceptions for the sale or dissolution of a business. The ban is not retroactive, so an older agreement is still judged the old way.
• North Dakota and Oklahoma. Long-standing statutory provisions void restraints on a lawful profession, subject mainly to ownership-transfer exceptions. Oklahoma still permits reasonable restrictions on soliciting the former employer’s established customers, which is the distinction that trips people up.

If you are in one of these states, the document in your drawer is generally not the obstacle it looks like. That does not mean the employer has no lever — see the non-solicitation and trade secret sections below — but the non-compete itself is usually the weakest part of the package.

The states where income decides

A growing group of states allows non-competes only above a compensation threshold. These figures are the 2026 thresholds, and they adjust most years — they are precisely the kind of number that should be checked against the current statute rather than recalled:

State	2026 threshold — who can be bound	Notes
Colorado	Workers above roughly $130,000	Non-solicitation has a lower threshold; the covenant must protect trade secrets and go no further than necessary
Washington	Workers above roughly $126,000; contractors above roughly $317,000	An outright ban takes effect June 30, 2027 under HB 1155
Illinois	Workers above $75,000 (rising in steps)	The Freedom to Work Act sets the floor; non-solicitation sits lower
Oregon	Workers above roughly $119,000	Capped at 18 months, with procedural requirements
Maine, Maryland, Virginia	Low-wage workers excluded	Maryland and Virginia add health-care-specific limits
District of Columbia	Roughly $162,000 for most workers	Medical specialists have a higher threshold; strict notice rules apply

The states that still enforce them, and how

Most remaining states apply a reasonableness test from the common law. Courts generally ask whether the restriction protects a legitimate business interest — trade secrets, confidential information, customer goodwill, or specialized training the employer paid for — and whether its duration, geography, and scope of prohibited activity are no broader than necessary.

Two features of that test matter to you:

Duration expectations have tightened. A year is common; two years is at the outer edge in many courts; three years is usually a fighting point.

What a court does with an overbroad clause varies by state, and the difference is large. Some states blue-pencil — strike the unreasonable term and enforce the rest. Some red-pencil — void the whole covenant if any term is unreasonable, which punishes employers who overreach. Others rewrite the covenant to what they think the parties would reasonably have agreed to. If your clause is overbroad, the doctrine your state follows determines whether you are free or still bound to a narrowed version.

Massachusetts: a different kind of statute

Massachusetts is worth reading separately because its Noncompetition Agreement Act, M.G.L. c. 149, § 24L, imposes requirements found almost nowhere else. For an agreement to hold up, it must generally:

• run no more than 12 months (up to 24 if the employee breached a fiduciary duty or took company property);
• provide garden leave — at least 50 percent of the employee’s highest annualized base salary over the prior two years, paid pro rata through the restricted period — or other mutually agreed consideration stated in the agreement;
• have been presented with the formal job offer or at least 10 business days before the start of employment;
• state expressly that the employee has the right to consult counsel; and
• be signed by both parties.

And it cannot bind certain workers at all: non-exempt employees, student interns, employees aged 18 or younger, and — the one that surprises people — anyone terminated without cause or laid off. That last carve-out is where a lot of older agreements die. Non-solicitation covenants are not covered by the Act and are judged under ordinary reasonableness, which is why they are usually the part that still bites.

The workaround that stopped working

For years the standard employer answer to a hostile state was a choice-of-law clause — the contract says Texas or Delaware law governs, and the employer sues there. Remote work has made this a live fight rather than a settled one.

Courts apply conflict-of-laws principles that let them override a chosen governing law where the state where the employee actually lives and works has a materially greater interest and applying the chosen law would violate a fundamental public policy of that state. States that ban non-competes treat mobility as exactly such a policy. California has written that conclusion into statute. If you are in a protective state and the contract names a permissive one, this is the argument — and it is a stronger argument now than it was a decade ago, though it is not automatic, and a parallel case filed early in the employer’s preferred forum can still shape the outcome.

The real risk is usually not the non-compete

Here is the part that changes how people should behave: in most disputes, the clause that actually creates exposure is not the non-compete. It is one of three others, and they are far more durable.

Non-solicitation. Barring you from soliciting the former employer’s customers or colleagues is scrutinized much less heavily than barring you from working at all. In many states a customer non-solicit is enforced where a non-compete would not be, especially when it is limited to accounts you personally handled. Employment agreements frequently pair a non-compete that will not survive with a non-solicit that will.

Confidentiality and NDAs. Enforceable nearly everywhere, including California — the state that voids non-competes expressly permits NDAs tied to genuine trade secrets. But an NDA drafted so broadly that it effectively prevents you from working in your field can be attacked as a de facto non-compete. The definition of confidential information is where to look.

Trade secrets. This is the exposure that does not depend on any contract clause at all. The federal Defend Trade Secrets Act and state trade secret statutes protect information that derives economic value from being secret and is subject to reasonable secrecy efforts. If you take a customer list, a pricing model, a training dataset or a playbook, you can be sued for misappropriation whether or not a non-compete is enforceable — and that claim does not care which state’s law governs the covenant.

That asymmetry is the practical lesson: the mobility restriction is often the weakest thing your employer holds, and the information restriction is the strongest. Which means the conduct that gets people sued is rarely “took the job.” It is “took the files.”

What to do before you sign the offer

1. Identify the governing state, and where you actually live and work. These can differ, and if they do the conflict-of-laws question is the one that decides the case.
2. Read all three clauses, not just the non-compete. Non-solicitation and confidentiality are the ones that survive. Note the definition of confidential information and whether it swallows the whole industry.
3. Check the statute, not your memory of it. Thresholds, effective dates and carve-outs change annually, and several states tightened rules in 2025 and 2026. Your state labor department or attorney general’s office publishes the current text.
4. Check the signing date. Minnesota’s ban is not retroactive and Washington’s full ban does not take effect until June 30, 2027. An agreement’s date can be the difference between void and enforceable.
5. Talk to an employment lawyer in your state before you accept — not after you are sued. Many offer free or low-cost initial consultations, and the useful moment to ask is while you still have a choice. Courts can enjoin a new job quickly; that is the harm that is hard to undo.
6. Leave clean. Return company devices, delete nothing, take nothing you would have to explain in a deposition. Contemporaneous records of what you did and did not take are worth more than any argument you can make later.

None of this is a reason to be reckless, and none of it is a reason to be paralyzed. The honest summary is that a non-compete is a real restriction in a large part of the country and close to a formality in another part, and the difference is not the wording of the document — it is the state, the money, the job, and whether you took anything with you on the way out.