Are Noncompete Agreements Still Enforceable in 2026? A State-by-State Guide

On April 23, 2024, the FTC voted 3 to 2 to finalize a rule banning noncompete clauses for nearly every worker in the United States. The rule was sweeping. It would have voided existing noncompetes for all non-senior-executive workers, banned every new noncompete including those for senior executives, and defined a noncompete broadly enough to catch agreements that function as one even if they are not labeled that way. The intended effective date was September 4, 2024.

It never got there. The same day the rule was issued, a Texas tax-services firm called Ryan, LLC sued the FTC in federal court, and the U.S. Chamber of Commerce joined as a plaintiff. On August 20, 2024, in Ryan, LLC v. FTC, Judge Ada Brown granted summary judgment for the plaintiffs and set the rule aside with nationwide effect. The court held that the FTC lacked the statutory authority to issue the rule and that the rule was arbitrary and capricious under the Administrative Procedure Act. That order was not limited to the parties. It stopped the rule everywhere, before it ever took effect.

The FTC filed appeals in October 2024. Then the administration changed. In early 2025, the FTC under its new chair announced it would not pursue the blanket rule, and the appeals courts stayed the cases. On September 5, 2025, the FTC voted to formally accede to the vacatur, dismiss its appeal in Ryan, and withdraw its appeal in a companion case. The Fifth Circuit dismissed the appeal on September 8, 2025. On February 12, 2026, the FTC published a final rule removing the Non-Compete Clause Rule from the Code of Federal Regulations entirely.

With the federal rule gone, there is no national answer to the question this guide is built around. A noncompete that is dead on arrival in one state is fully enforceable across the border. The states fall into three broad camps, and the 50-state table further down sorts every one of them.

• Ban states. A handful of states refuse to enforce employment noncompetes at all, with narrow exceptions, usually for the sale of a business.
• Wage-threshold states. A growing group voids noncompetes for workers below a salary floor, on the theory that lower-paid workers have the least bargaining power and the least access to trade secrets.
• Reasonableness states. The majority enforce noncompetes that protect a legitimate business interest and are reasonable in time, geography, and scope. How forgiving that test is varies a lot.

One more layer cuts across all three camps: industry carve-outs. Even a state that broadly enforces noncompetes may ban them for physicians, or for broadcast employees, or for technology workers. Your profession can override your state's general rule. We come back to that below.

Start with the clearest cases. Four states ban employment noncompetes about as cleanly as a state can: California, Minnesota, North Dakota, and Oklahoma. California is the strictest. Its statute voids employment noncompetes, a 2024 amendment reaches agreements signed in other states if the employee works in California, and it gives employees a private right of action for damages and attorney fees. Minnesota banned noncompetes for agreements entered into on or after July 1, 2023. North Dakota and Oklahoma have long-standing statutory bans. All four still allow a noncompete tied to the genuine sale of a business.

Wyoming joined the list more recently. A statute effective July 1, 2025 voids most employment noncompetes signed on or after that date, though it carves out executive and management personnel, business sales, trade secret protection, and the recovery of relocation or training costs. Physicians are explicitly banned. The statute does not reach agreements signed before July 1, 2025.

Montana is the genuinely contested one. Its statute declares contracts in restraint of trade void, and in practice employment noncompetes there are broadly unenforceable. But the Montana Supreme Court applies a narrow reasonableness exception drawn from a separate statutory carve-out for the sale of business goodwill. Some surveys list Montana as a clean ban; others call it an effectively-enforced reasonableness state. The honest answer is that it is a near-ban whose exact classification is litigated. An employer in Montana should not count on a noncompete, but an employee should not assume one is automatically void either.

The table below covers all 50 states plus the District of Columbia. The next section walks through the wage-threshold group in detail, but the full breakdown, including every reasonableness state and its statute, is here.

The fastest-growing approach is not a ban. It is a salary floor. A wage-threshold state allows noncompetes but voids them for workers earning at or below a set figure. The logic is straightforward: a lower-paid worker has little bargaining power over the terms of a noncompete and rarely holds the trade secrets a noncompete is supposed to protect. Counting the District of Columbia, more than a dozen jurisdictions now use a threshold of some kind.

The figures are all over the map, because each state ties its threshold to a different benchmark:

• Washington uses $126,858.83 per year for employees, indexed annually and updated each September 30. Its independent-contractor threshold is far higher.
• Colorado sets $130,014 per year for noncompetes and only permits them to protect trade secrets.
• Illinois uses $75,000 per year, with a schedule that steps it up over time, reaching $90,000 by 2037.
• Oregon uses $116,427 per year for non-healthcare workers, adjusted annually by the Oregon Bureau of Labor and Industries. Because that figure moves every year, confirm the current number with BOLI rather than relying on a static citation.
• Maine ($63,840), New Hampshire ($30,160), and Rhode Island ($39,900) peg their thresholds to multiples of the federal poverty level or minimum wage, which keeps them comparatively low.
• The District of Columbia uses $162,164 per year for general workers in 2026, with a higher figure for medical specialists. The DC numbers track an annual notice from the Department of Employment Services, so verify the current-year figure before you cite it.

Some states protect workers without a dollar figure at all. Nevada bans noncompetes for employees paid solely on an hourly-wage basis. Virginia bans them for any worker who is non-exempt under the federal Fair Labor Standards Act, regardless of salary. Massachusetts has no dollar floor but categorically excludes non-exempt employees, workers under 18, student workers, and anyone fired without cause, on top of a 12-month cap and a garden-leave pay requirement. For those states, the checker above tells you the answer turns on your job classification, not your paycheck.

Your profession can override your state's general rule. The clearest example is healthcare, where the last two years have produced a wave of physician-specific restrictions even in states that otherwise enforce noncompetes freely.

Physicians and other healthcare workers. Indiana banned physician noncompetes with hospitals and hospital systems for agreements signed on or after July 1, 2025. Oregon voided noncompetes for medical licensees, including physicians, nurse practitioners, and physician assistants, effective June 9, 2025. Colorado banned them for physicians, physician assistants, dentists, and registered nurses as of August 6, 2025. Massachusetts bans physician, nurse, and psychologist noncompetes by profession-specific statute. Texas and Louisiana take a middle path, capping physician noncompetes rather than banning them: Texas limits them to one year and a five-mile radius, and Louisiana caps contract terms and exempts rural hospital physicians. Even states with no physician statute, like Pennsylvania and Delaware, see courts scrutinize healthcare noncompetes harder than most.

Broadcast employees. On-air and broadcast staff are protected in several states. Arizona and Connecticut exempt broadcasters from enforcement. The District of Columbia imposes a blanket ban on noncompetes for broadcast employees regardless of pay. Utah caps the duration of broadcast-employee noncompetes below a weekly pay line.

Technology workers. Hawaii is the standout here: a business whose majority revenue comes from software or IT development cannot use noncompetes or non-solicitation agreements against its employees at all.

In a reasonableness state, a noncompete is not enforceable just because both sides signed it. A court will only enforce one that clears a multi-part test. The wording differs by state, but the building blocks are consistent.

• A legitimate business interest. The employer has to be protecting something real: trade secrets, confidential information, customer relationships, or specialized training it paid for. Stopping ordinary competition is not a legitimate interest. A noncompete that exists only to keep a worker from leaving will fail.
• A reasonable duration. Courts routinely enforce six months to two years and grow skeptical past that. Some states cap it directly: Massachusetts, Washington, and Oregon limit non-physician noncompetes to 12 months.
• A reasonable geography and scope. The restriction should reach only the territory and the kind of work where the worker could actually use the employer's protected information. A nationwide ban on a regional salesperson, or a bar on an entire industry for a narrow specialist, tends to fail.
• Adequate consideration. The worker has to get something of value for signing. A noncompete handed to a new hire on day one is usually supported by the job itself. One presented to an existing employee may need separate consideration: a raise, a bonus, a promotion. In Illinois, the statute spells this out, requiring at least two years of employment or another professional or financial benefit.

What happens when a noncompete is too broad depends on a doctrine that splits the states three ways, and it matters more than people realize.

• Blue-pencil states let a court strike the unreasonable language and enforce what is left. Georgia is a blue-pencil state.
• Red-pencil states let a court go further and actively rewrite the terms to make them reasonable. South Carolina and West Virginia follow the red-pencil approach.
• Strict-construction states do neither. Wisconsin is the cleanest example: if any part of the covenant is unreasonable, the entire agreement is void, with no judicial repair. That makes an overbroad Wisconsin noncompete a high-stakes gamble for the employer.

People use the word noncompete loosely, and that costs them. A non-compete is one specific tool. There are two others that do related jobs, survive in far more states, and are often the better fit.

• A noncompete restricts where you can work after you leave. It is the broadest restriction and the most often struck down. It is the only one of the three that a ban state actually outlaws.
• A non-solicitation agreement is narrower. It stops you from poaching the former employer's customers or employees, but it does not stop you from taking a job with a competitor. Because it restrains less, courts uphold it more readily, and most states that limit noncompetes still allow non-solicitation agreements, sometimes at a lower wage threshold.
• A non-disclosure agreement, or NDA, protects confidential information and trade secrets. It does not restrict your employment at all. You can take any job you want; you just cannot take the protected information with you. NDAs hold up almost everywhere, and what an NDA actually covers is worth understanding before you sign one alongside a noncompete.

Here is the practical takeaway. Even California and Minnesota, which ban noncompetes, generally still enforce non-solicitation agreements and NDAs. So an employer that wants real protection in a ban state has not lost its options, it has lost one option. And an employee who is handed a noncompete in a ban state should still read any non-solicitation or confidentiality language carefully, because that part may bind even when the noncompete does not. A well-drafted employment contract usually carries all three types of clause, and which ones actually hold depends on the state. For a fuller look at how those clauses sit alongside pay, duties, and termination terms, see our breakdown of the terms every employment contract should cover.

With the federal rule gone, both sides of a noncompete have a clear set of moves.

If you are an employer: stop relying on a single national template. A noncompete that works in Florida is void in California and may be unenforceable in Minnesota. Audit your agreements state by state, drop noncompetes for workers below your state's wage threshold, and check whether a profession carve-out, especially in healthcare, reaches your staff. In many cases a tighter non-solicitation agreement plus a solid NDA protects what you actually need to protect, and survives in far more states. Watch the FTC too: the categorical rule is dead, but the agency is still bringing individual enforcement actions. The noncompete reversal is not the only federal rule that shifted under small-business owners lately; if you run an LLC, our guide to whether your LLC still owes a BOI report covers a similar on-again, off-again change worth a quick check.

If you are an employee: do not assume your noncompete is either airtight or worthless. Find your state in the table above. If you are in a ban state, an employment noncompete is very likely unenforceable. If you are below a wage threshold, the same is true. If you are in a reasonableness state, the agreement still has to pass the legitimate-interest and reasonableness test, and an overbroad one may fail. A signed noncompete is a starting point for analysis, not the end of one. Before you accept new terms or leave for a competitor, get the agreement in front of an employment lawyer in your state.