Non-compete: who can be bound, by state
Four states void them, five tie them to a 2026 income threshold, three exclude low-wage workers, and the rest decide it in court. What each position reaches.
There is no federal ban. The FTC's rule was set aside in August 2024 and removed from the Code of Federal Regulations effective February 12, 2026, so what governs your agreement is state law — and the states divide into four groups rather than two.
The published 2026 positions. A threshold state is not a permissive state: clearing the income bar makes a covenant possible, not enforceable, and the duration and scope limits still apply.
| State | Position | 2026 threshold or scope |
|---|---|---|
| California | Void or close to it | Non-competes are void, and including one is itself unlawful |
| Minnesota | Void or close to it | Void for agreements entered into on or after July 1, 2023 |
| North Dakota | Void or close to it | Long-standing statutory void, subject mainly to ownership-transfer exceptions |
| Oklahoma | Void or close to it | Void, but soliciting established customers can still be restricted |
| Colorado | Only above an income threshold | Workers above roughly $130,000 |
| Washington | Only above an income threshold | Workers above roughly $126,000; contractors above roughly $317,000 |
| Illinois | Only above an income threshold | Workers above $75,000, rising in steps |
| Oregon | Only above an income threshold | Workers above roughly $119,000 |
| Maine | Low-wage workers excluded | Low-wage workers excluded |
| Maryland | Low-wage workers excluded | Low-wage workers excluded, plus health-care-specific limits |
| Virginia | Low-wage workers excluded | Low-wage workers excluded, plus health-care-specific limits |
| District of Columbia | Only above an income threshold | Roughly $162,000 for most workers |
| Any other state | Reasonableness test, decided by a court | A reasonableness test, applied by a court after the fact |
The article carries the statutory citations behind each row and the two things this table cannot compress: that a choice-of-law clause naming a permissive state is a weaker answer than it used to be, and that the clause which usually decides the case is not the non-compete at all but the non-solicitation or trade-secret claim sitting beside it.
There is no federal non-compete rule to look up. The FTC’s was set aside nationwide in August 2024, the appeals were dismissed in September 2025, and the rule left the Code of Federal Regulations on February 12, 2026. What is left is state law, and it does not divide into permissive and protective — it divides into four positions, which is what the lookup above sorts by.
The four positions
Void. California, Minnesota, North Dakota and Oklahoma void nearly all employee non-competes, subject mainly to ownership-transfer exceptions. Minnesota’s ban is not retroactive, so the signing date decides which regime applies. California goes furthest: since January 1, 2024 including a non-compete in an employment agreement is itself unlawful, and a void agreement is unenforceable regardless of where or when it was signed, with a private right of action attached.
Threshold. Colorado, Washington, Illinois, Oregon and the District of Columbia allow a non-compete only above an income figure. The figures for 2026 are in the table. Clearing the threshold makes a covenant possible, not enforceable — the duration and scope limits still apply, and Oregon caps the restricted period at 18 months on top of its threshold.
Exclusion. Maine, Maryland and Virginia work the other way round: rather than setting a bar to clear, they exclude low-wage workers from the reach of a non-compete. Maryland and Virginia add limits specific to health care.
Reasonableness. Most remaining states decide it after the fact, asking whether the restriction protects a legitimate business interest and whether its duration, geography and scope go no further than necessary. What a court does with an overbroad clause varies enormously — some blue-pencil it, some void the whole covenant, some rewrite it — and that doctrine often decides the outcome more than the clause does.
What the lookup will not tell you
- Whether your agreement is one. A non-solicitation clause is not a non-compete, is judged far less strictly, and routinely survives in states that will not enforce a non-compete. Many agreements pair a weak non-compete with a strong non-solicit for exactly that reason.
- Which state governs. The state you live and work in and the state named in the contract can differ, and when they do the conflict-of-laws question is the one that decides the case.
- Whether the number is still right. These thresholds adjust most years. Washington’s stops mattering on June 30, 2027, when its outright ban begins; until then it governs.
The risk that usually materialises is not the mobility clause. It is the confidentiality definition and the trade-secret claim, neither of which needs the non-compete to be enforceable. The statutes, the Massachusetts requirements and the six steps to take before signing are in Non-competes: what actually happens when you take the other job.
Frequently asked questions
- Is there a federal ban on non-competes?
- No. The FTC finalized a rule in April 2024 that would have banned most non-competes nationwide, but a federal district court in Texas set it aside in August 2024 before it took effect. The Commission dismissed its appeals in September 2025 and the rule was removed from the Code of Federal Regulations effective February 12, 2026. Enforceability is decided by state law.
- Which states void non-competes outright?
- California, Minnesota, North Dakota and Oklahoma void nearly all employee non-competes, subject mainly to exceptions for the sale of a business. California goes furthest: since January 1, 2024 it is also unlawful to include a non-compete in an employment agreement at all, and a void agreement is unenforceable regardless of where or when it was signed.
- Does a choice-of-law clause pointing at another state work?
- Less often than it used to. Courts will 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 that state's fundamental public policy. States that ban non-competes treat mobility as exactly such a policy.
- Are the thresholds on this page current?
- They are the 2026 figures, and they adjust most years — which is why they are the kind of number to check against the statute rather than recall. Washington's threshold, for instance, stops mattering on June 30, 2027, when the state's outright ban takes effect.
- If the non-compete is void, am I free?
- Free of that clause, usually not of the rest. Non-solicitation covenants are scrutinised far less heavily and routinely survive where a non-compete would not, and a trade-secret claim does not depend on any contract clause at all. The mobility restriction is often the weakest thing an employer holds; the information restriction is the strongest.
Sources
- Federal Trade Commission — Noncompete Rule, 16 C.F.R. Part 910: not in effect; enforcement stopped by district court order August 20, 2024; appeals dismissed September 5, 2025; rule removed from the Code of Federal Regulations effective February 12, 2026 (ftc.gov/legal-library/browse/rules/noncompete-rule)
- Ryan LLC v. FTC, No. 3:24-cv-00986 (N.D. Tex. Aug. 20, 2024) — the rule set aside nationwide on the ground that the FTC lacked statutory authority
- California Business & Professions Code §§ 16600, 16600.1 and 16600.5 — non-competes void; including one unlawful; void agreements unenforceable regardless of where or when signed, with a private right of action
- Edwards v. Arthur Andersen LLP, 44 Cal.4th 937 (2008) — section 16600 voids employee non-competes even if narrowly drawn, unless a statutory exception applies
- Minnesota Statutes § 181.988 — non-competes entered into on or after July 1, 2023 are void for employees and independent contractors, with exceptions for the sale or dissolution of a business
- Massachusetts General Laws chapter 149, § 24L — 12-month limit, garden leave, 10 business days to review, and exemptions for nonexempt employees and workers terminated without cause
- Washington HB 1155 (2026) — non-competes void for employees and independent contractors effective June 30, 2027; the current income threshold governs until then
- Defend Trade Secrets Act of 2016, 18 U.S.C. § 1836 et seq., and state Uniform Trade Secrets Act enactments — protection that does not depend on a non-compete being enforceable