The short answer: Everyone heard “non-competes are banned” — they’re not. The FTC’s 2024 rule was killed in court, the FTC dropped its appeals, and the rule was scrubbed from the books. What replaced it: state law, and only state law — California, North Dakota, and Oklahoma void most non-competes outright; Minnesota and Colorado banned nearly all of them in 2023; Wyoming joined in 2025 and Washington signed a ban effective 2027. And the FTC isn’t gone — it now sues over specific overbroad non-competes one case at a time, most recently a pest-control company covering more than 18,000 workers. Before you sign one or ask anyone to sign one, find out what your state actually allows.
Non-competes often arrive stapled to the offer letter — which is exactly when people sign them without reading. Offer Letters: Red Flags Before You Sign covers the other four things hiding in that packet.
This guide is educational, not legal advice. Non-compete enforceability is state-specific and fact-specific — nothing here tells you whether a particular agreement is enforceable.
What actually happened to the FTC rule
The short version of a long fight:
- April 2024 — the FTC issued a rule banning nearly all non-competes nationwide. Headlines everywhere said non-competes were dead.
- August 20, 2024 — a federal court in Texas (Ryan LLC v. FTC) vacated the rule nationwide, holding the FTC lacked authority to issue it.
- September 2025 — the FTC formally dropped its appeals and acceded to the vacatur (FTC press release, verified October 2026).
- February 2026 — the rule was removed from the Code of Federal Regulations.
The rule is dead. It is not coming back in its 2024 form. Anyone telling you “the FTC banned non-competes” is two years out of date.
The twist: the FTC still sues — one company at a time
Here’s what replaced the blanket rule: case-by-case enforcement under Section 5 of the FTC Act, targeting specific non-competes the Commission considers unreasonable. The track record, in order:
- September–November 2025 — a pet-cremation company’s non-competes barred (~1,800 workers; final order November 2025).
- February 2026 — “no-hire” agreements at a building-services company (final order February 2026).
- April–June 2026 — a pest-control company’s non-competes covering more than 18,000 workers nationwide; the FTC’s final consent order (June 22, 2026) requires the company to stop enforcing them, plus warning letters to 13 other pest-control companies (FTC, verified October 2026).
No FTC non-compete actions have been announced since the June 2026 order (verified October 2026). The pattern is clear: the FTC isn’t banning non-competes categorically anymore — it’s picking off the most overbroad ones, especially those binding rank-and-file workers with no access to real trade secrets.
State law is the whole game now
With no federal rule, enforceability is purely a state question — and the states are moving in both directions:
States that void (nearly) all non-competes: – California, North Dakota, Oklahoma — longstanding bans; most employee non-competes void outright (California’s is in Business & Professions Code §16600). – Minnesota and Colorado — near-total bans enacted in 2023. – Wyoming — added 2025: SF0107, signed March 19, 2025, effective July 1, 2025, voids non-competes in employment contracts entered on or after that date (with exceptions for sale-of-business, trade secrets, and certain executive arrangements) (Wyoming Legislature bill summary, verified October 2026). – Washington — added 2026: HB 1155 signed in the 2026 session, effective June 30, 2027, voids noncompetition covenants including forfeiture-for-competition provisions (secondary reporting — Foley & Lardner, Seyfarth — as the final statutory text wasn’t directly retrievable; verify before relying on specifics).
Moving the other way: Virginia expanded its ban to all FLSA-nonexempt employees effective July 1, 2025 — while Florida’s CHOICE Act (effective July 1, 2025) strengthened non-compete enforceability above income thresholds. The map is not converging; it’s fragmenting.
Everywhere else: most states enforce “reasonable” non-competes — reasonable in duration, geography, and scope — and many courts will “blue-pencil” (rewrite) an overbroad clause rather than throwing it out entirely. “Reasonable” is litigated case by case, which is lawyer territory.
The practical point: a non-compete that’s ironclad in Florida may be void in California and a federal enforcement target if it’s slapped on 18,000 hourly workers. There is no national answer anymore. Check your state — and recheck it annually, because this roster keeps changing.
For owners: when a non-compete is worth the paper
Ask what you’re actually protecting:
- Genuine trade secrets or customer relationships an ex-employee could take to a direct competitor? A narrowly drawn non-compete (or better, a non-solicitation + confidentiality agreement) may be worth it — in a state that enforces them.
- “We just don’t want them working nearby”? That’s exactly the kind of restriction courts trim and the FTC targets. It protects nothing and risks everything.
- Rank-and-file workers with no confidential information? The FTC’s enforcement pattern says these are the cases it brings. The 18,000-worker pest-control action is the warning.
Narrower alternatives that draw less fire:
- Non-solicitation agreements — don’t poach our clients/employees for X months. Enforceable in far more states, including several that void non-competes.
- Confidentiality / NDA agreements — don’t take or use our proprietary information. Narrow, defensible, and usually uncontroversial.
- Garden leave — we pay you not to compete for a defined period. Expensive for the employer, which is precisely why courts respect it: you’re buying the restriction, not just imposing it.
For workers: before you sign
- Find out your state’s rule first. A non-compete void in California is still presented to California workers regularly — presented doesn’t mean enforceable, but it does mean intimidating.
- Read the scope, not the title. Duration, geography, and which competitors: a 2-year, 50-mile ban on joining “any business that does what we do” is a different animal than a 6-month ban on joining three named competitors.
- Ask what happens to it if you’re fired. Some agreements bind you even if you’re terminated without cause. That’s negotiable before you sign and nearly non-negotiable after.
- The FTC’s estimate when it issued the 2024 rule was that roughly 1 in 5 U.S. workers were bound by a non-compete — attributed to the agency’s rulemaking, not asserted as current fact. The point stands regardless of the exact number: these clauses are far more common than most signers realize.
Methodology
The FTC timeline (rule vacatur August 2024; appeal dismissal September 2025; CFR removal February 2026) and the enforcement actions (Gateway, Adamas, Rollins with dates and worker counts) are from FTC press releases and case pages verified in October 2026; no FTC non-compete actions after the June 2026 Rollins final order were found. The state roster reflects verified primary sources where retrievable (Wyoming’s enrolled bill summary) and attributed secondary reporting where the primary text wasn’t directly fetched (Washington HB 1155, Virginia expansion, Florida CHOICE Act) — each flagged as such. The “1 in 5 workers” figure is the FTC’s own rulemaking estimate, attributed, not asserted. This page is educational, not legal advice — non-compete enforceability turns on state law and specific facts.
Sources
- FTC non-compete actions hub — ftc.gov (case timelines), verified October 2026
- FTC Rollins action (April 2026) — ftc.gov (>18,000 workers), verified October 2026
- FTC Rollins final order (June 2026) — ftc.gov, verified October 2026
- FTC Gateway final order (Nov 2025) — ftc.gov (~1,800 workers), verified October 2026
- Wyoming SF0107 enrolled summary — wyoleg.gov (ban effective July 1, 2025), verified October 2026
- Washington HB 1155 — secondary reporting (Foley & Lardner, Seyfarth analyses; final text not directly retrieved — verify before relying on specifics)
Frequently asked questions
I signed a non-compete in 2023 when the FTC rule was announced. Is it void? No — the rule never took effect (it was vacated before its effective date). Your agreement’s enforceability is governed by your state’s law, then and now.
My employer says non-competes are “standard” and “everyone signs.” Is that true? They’re common, not universal — and “standard” doesn’t mean enforceable. In ban states, “everyone signs” includes a lot of void agreements.
Can my employer enforce a non-compete if I was laid off? Depends on the state and the agreement’s terms. Some states and courts look skeptically on enforcing restrictions against workers the employer chose to let go. Read the termination provisions — then get advice.
What’s the difference between a non-compete and a non-solicitation agreement? A non-compete says where you can work; a non-solicitation says who you can contact (clients, employees) after leaving. Non-solicitation clauses are enforceable in far more jurisdictions and draw far less regulatory attention.
I’m an owner in a ban state. How do I protect client relationships? Non-solicitation + confidentiality agreements, well-drawn and consistently enforced. They’re the standard toolkit where non-competes are void — and they’re more likely to survive a challenge everywhere else, too.