Signing a non-compete doesn't automatically mean you're locked out of your industry for years. Whether that clause holds up depends almost entirely on which state you work in — and the rules have shifted significantly since the FTC's attempt at a nationwide ban collapsed.
The federal ban is officially, formally dead
In April 2024, the FTC finalized a rule banning nearly all non-competes nationwide. A Texas federal court blocked it in August 2024 (Ryan LLC v. FTC), and in September 2025 the FTC withdrew its appeal entirely. As of February 12, 2026, the FTC formally removed the rule from the Code of Federal Regulations — there is no realistic prospect of it returning as written. The FTC has shifted to case-by-case enforcement under Section 5 of the FTC Act instead, targeting specific agreements it considers unfair — it has already forced one company to release around 1,800 employees from overly broad non-competes, so the agency isn't entirely out of this space, just no longer pursuing a blanket rule.
The three-tier state landscape
- Outright bans: California, Minnesota, North Dakota, and Oklahoma treat employee non-competes as void, full stop. California in particular allows employees to sue for damages if an employer even attempts to enforce one.
- Salary-threshold states: a rapidly growing group — now 13+ states plus DC — voids non-competes below a specific income level. As of 2026, examples include Colorado (~$127,000), Oregon (~$116,000), Illinois ($75,000), and Washington DC (~$162,000, the highest in the country). These thresholds adjust for inflation and vary meaningfully by state — don't assume one figure applies everywhere.
- Reasonableness states: most others, including Texas and Florida, still enforce non-competes if they're reasonably limited in duration (commonly 1-2 years) and geographic scope. Florida's 2025 CHOICE Act actually moved the other way, allowing employer-friendly agreements up to 4 years for high earners — not every state is trending toward more restriction.
One major upcoming shift worth knowing: Washington State enacted a near-total ban on employee non-competes that voids existing agreements effective June 30, 2027 — a bigger change than a simple salary threshold, and a sign this landscape keeps moving.
What to actually check on your own agreement
- Which state's law actually governs — check the "choice of law" clause. If you work remotely from a protective state (like California) but the contract tries to apply a more permissive state's law, many protective states will disregard that clause if it conflicts with their own public policy.
- Your actual compensation against your state's threshold, if you're in a threshold state — many employees are simply below the line and don't realize it.
- The duration and geographic scope — even in "reasonableness" states, an agreement lasting many years or covering an unreasonably wide area is a real weakness to raise.
If you believe your non-compete is void
Before assuming you're free to act, get this confirmed by an employment attorney in your state — the stakes of guessing wrong are high. If your agreement is clearly void under your state's statute and your employer still threatens legal action, a declaratory judgment action (asking a court to formally rule the clause unenforceable) can pre-empt the dispute — employers are often reluctant to litigate a case that could create an unfavorable precedent affecting every other employee's agreement.
See also: non-competes aren't the only area where your rights hinge on which state you're in — your state probably has its own data-privacy law now, not just California's CCPA.