Non-Compete Laws by State: Five Bans, a Dozen Salary Thresholds, the Health-Care Carve-Outs and Florida Going the Other Way
With the federal rule withdrawn, the 2025 and 2026 legislative sessions produced more non-compete law than any before them. Here is where every state stands.
Key points
- No federal ban: the FTC's 2024 rule was vacated, the appeal dropped and the rule withdrawn in September 2025; the agency now acts case by case.
- Five states void non-competes outright; eleven more void them below an income threshold; Massachusetts, Oregon, Illinois and Colorado impose notice and duration rules.
- Health-care non-competes are the fastest-moving front, with bans or strict limits enacted in Arkansas, Colorado, Texas, Pennsylvania and Maryland in 2025; Florida moved the other way with the CHOICE Act.
NEW YORK — Two years ago employers were bracing for a single national rule. Today they face fifty-one. The Federal Trade Commission's 2024 non-compete ban never took effect — a Texas court set it aside, and the agency formally abandoned it in September 2025 — and the states have filled the space with the busiest two sessions of non-compete legislation on record. The result is a map with bans at one end, Florida's new enforcement-friendly regime at the other, and most states somewhere in between, with income thresholds, notice periods and a widening set of exemptions for doctors and nurses.
"The practical rule for a multistate employer is that your non-compete is enforceable in the state where the employee lives, not the state where you drafted it," an employment partner in Chicago told The Counsel.
The federal picture
The FTC rule, adopted on a 3–2 vote in April 2024, would have voided nearly every existing non-compete and barred new ones. In Ryan LLC v. FTC, decided in August 2024, a federal court in Texas held that the Commission lacked authority to issue substantive unfair-competition rules and set the rule aside nationwide. The FTC appealed, but after the change of administration it dismissed the appeal and, in September 2025, withdrew the rule. What remains is enforcement under Section 5 of the FTC Act against individual employers: a 2025 consent order barred a pet-cremation company from imposing non-competes on its workers, and the agency has sent warning letters to health-care employers and staffing firms. The National Labor Relations Board's general counsel, who in 2023 had declared most non-competes unlawful under federal labor law, was replaced and the memorandum rescinded. There is, in short, no federal rule — only federal attention.
States that ban non-competes
| State | Rule | Exceptions | Notes |
|---|---|---|---|
| California | Void | Sale of business; dissolution of partnership or LLC | Since 2024, void regardless of where signed; employer must not enter or attempt to enforce; private right of action |
| North Dakota | Void | Sale of business; partnership dissolution | Oldest ban, from the 1860s Field Code |
| Oklahoma | Void | Sale of business; non-solicitation of established customers permitted | — |
| Minnesota | Void for agreements after July 1, 2023 | Sale or dissolution of business | Choice-of-law and forum clauses requiring out-of-state adjudication unenforceable against Minnesota residents |
| Wyoming | Void for agreements after July 1, 2025 | Executive and management personnel and their professional staff; trade-secret protection; sale of business; recovery of relocation or training costs | Physician non-competes also voided with patient-notice carve-out |
States with income thresholds
| State | Non-compete void for workers earning below | Other limits |
|---|---|---|
| Illinois | $75,000 (rising in steps to $90,000 by 2037); non-solicits $45,000 | 14 days' notice; advice to consult counsel; attorney's fees for prevailing employee |
| Oregon | About $116,000 in 2025, indexed | 12 months maximum; written notice two weeks before start; signed copy within 30 days of termination |
| Washington | About $123,000 in 2025, indexed; contractors about $309,000 | Over 18 months presumptively unreasonable; disclosure before acceptance; laid-off workers must be paid base salary during restriction |
| Colorado | About $127,000 in 2025, indexed; customer non-solicits at 60 percent of that | Separate notice document; trade-secret purpose required; criminal and civil penalties |
| District of Columbia | About $158,000 in 2025, indexed | 14 days' notice; 365 days maximum |
| Virginia | Below the state average weekly wage (about $76,000 in 2025) and, since July 2025, any worker entitled to overtime | Posting requirement; civil penalties |
| Maryland | 150 percent of the state minimum wage | Health-care limits separately |
| New Hampshire | 200 percent of the federal minimum wage | Copy before acceptance of offer |
| Maine | 400 percent of the federal poverty line | Notice before offer; effective one year after signing or six months after start |
| Rhode Island | 250 percent of the federal poverty line | Non-exempt workers, students and under-18s excluded |
| Nevada | Hourly workers | Courts must blue-pencil; laid-off workers protected |
Procedural states
- Massachusetts. Twelve months maximum; garden leave at half pay or other agreed consideration; ten business days' notice; void for non-exempt employees, students and laid-off workers; must be signed by both parties and advise the right to counsel.
- Louisiana. Two years maximum; must list the parishes or municipalities covered; physician non-competes limited further.
- Utah. One year maximum for post-employment restrictions.
- Idaho, Georgia, Texas. Statutes favor enforcement for key employees but require reasonable scope; Texas's health-care limits are a separate regime.
Florida: the counter-trend
Florida's CHOICE Act, in force since July 2025, is the only recent statute written to make non-competes easier to enforce. For "covered employees" — those earning more than twice the annual mean wage in their county — it authorizes non-competes of up to four years and "garden leave" agreements of the same length, and it requires courts to preliminarily enjoin a covered employee who breaches, placing the burden on the employee to show by clear and convincing evidence that the covenant should not be enforced. The Act applies to employees who work primarily in Florida or whose employer's principal place of business is there, which has drawn companies to designate Florida law in agreements with remote workers — a designation other states' courts have begun to refuse.
Health care
| State | Rule for practitioners |
|---|---|
| Arkansas | Physician non-competes void (2025) |
| Colorado | Non-competes void for physicians, dentists, advanced practice registered nurses and certified nurse anesthetists in patient care (August 2025) |
| Texas | Physicians, dentists, nurses, physician assistants: one year, five miles, buyout capped at one year's salary; must be in writing (September 2025) |
| Pennsylvania | Health-care practitioners: one year maximum; void if practitioner dismissed without cause; patient notice (2025) |
| Maryland | Void for health-care workers earning $350,000 or less; one year and ten miles above that (2025) |
| Indiana | Void for primary care physicians; buyout and notice rules for others |
| Wyoming | Physician non-competes void (2025) |
| Louisiana | Physician non-competes limited to three to five years depending on practice type, with notice |
The practical rule for a multistate employer is that your non-compete is enforceable in the state where the employee lives, not the state where you drafted it.
An employment partner, to The Counsel
What employers should do
- Map agreements to employee location, not to the employer's state; most threshold and ban statutes apply to residents and in-state workers regardless of choice-of-law clauses.
- Apply thresholds annually. Indexed figures change each January; an agreement valid when signed may fall below the line.
- Follow notice rules exactly. Illinois, Oregon, Colorado, Massachusetts and the District of Columbia void agreements for a missed notice period.
- Separate health-care practitioners into state-specific templates; a general form will be void in at least eight states.
- Prefer narrower tools — confidentiality, customer non-solicitation, trade-secret protection — which survive in nearly every state and which the FTC has not challenged.
- Watch the FTC's case list. Health-care, staffing and low-wage employers remain its stated priorities.
Which states ban non-compete agreements?
California, North Dakota, Oklahoma, Minnesota and, since July 2025, Wyoming, each with sale-of-business exceptions and, in Wyoming, an executive carve-out.
What happened to the FTC's non-compete rule?
Vacated in Ryan LLC v. FTC in August 2024; the FTC dismissed its appeal and withdrew the rule in September 2025, and now enforces against individual employers under Section 5.
Which states set salary thresholds?
Illinois, Oregon, Washington, Colorado, D.C., Virginia, Maryland, New Hampshire, Maine, Rhode Island and Nevada, with thresholds from the minimum wage to about $158,000.
Are physician non-competes enforceable?
Banned or strictly limited in Arkansas, Colorado, Texas, Pennsylvania, Maryland, Indiana, Wyoming and Louisiana, with more states considering bills.
The Counsel will update this guide as 2027 indexed thresholds are published. Workers asked to sign a non-compete should check their state's threshold and notice rules before signing; an agreement that fails them is void from the start.
Daniel Okafor
Daniel covers the Second Circuit, securities litigation and antitrust trials.
This report is for general information only and is not legal advice. Readers should consult a licensed attorney about their own circumstances. Statutory thresholds are indexed and change annually.