Courts · Law · Policy · Practice
Employment

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With the federal rule withdrawn, the 2025 and 2026 legislative sessions produced more non-compete law than any before them.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.

Daniel Okafor
Daniel OkaforFederal courts correspondent, New York
Published
8 min read
An employment contract and pen on a desk, illustrating non-compete laws by state
Photograph: The Counsel

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  • No federal ban: the FTC's 2024 rule was vacated, the appeal dropped and the rule withdrawn in September 2025; the agency now acts case by case.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

StateRuleExceptionsNotes
CaliforniaVoidSale of business; dissolution of partnership or LLCSince 2024, void regardless of where signed; employer must not enter or attempt to enforce; private right of action
North DakotaVoidSale of business; partnership dissolutionOldest ban, from the 1860s Field Code
OklahomaVoidSale of business; non-solicitation of established customers permitted—
MinnesotaVoid for agreements after July 1, 2023Sale or dissolution of businessChoice-of-law and forum clauses requiring out-of-state adjudication unenforceable against Minnesota residents
WyomingVoid for agreements after July 1, 2025Executive and management personnel and their professional staff; trade-secret protection; sale of business; recovery of relocation or training costsPhysician non-competes also voided with patient-notice carve-out

States with income thresholds

StateNon-compete void for workers earning belowOther limits
Illinois$75,000 (rising in steps to $90,000 by 2037); non-solicits $45,00014 days' notice; advice to consult counsel; attorney's fees for prevailing employee
OregonAbout $116,000 in 2025, indexed12 months maximum; written notice two weeks before start; signed copy within 30 days of termination
WashingtonAbout $123,000 in 2025, indexed; contractors about $309,000Over 18 months presumptively unreasonable; disclosure before acceptance; laid-off workers must be paid base salary during restriction
ColoradoAbout $127,000 in 2025, indexed; customer non-solicits at 60 percent of thatSeparate notice document; trade-secret purpose required; criminal and civil penalties
District of ColumbiaAbout $158,000 in 2025, indexed14 days' notice; 365 days maximum
VirginiaBelow the state average weekly wage (about $76,000 in 2025) and, since July 2025, any worker entitled to overtimePosting requirement; civil penalties
Maryland150 percent of the state minimum wageHealth-care limits separately
New Hampshire200 percent of the federal minimum wageCopy before acceptance of offer
Maine400 percent of the federal poverty lineNotice before offer; effective one year after signing or six months after start
Rhode Island250 percent of the federal poverty lineNon-exempt workers, students and under-18s excluded
NevadaHourly workersCourts 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

StateRule for practitioners
ArkansasPhysician non-competes void (2025)
ColoradoNon-competes void for physicians, dentists, advanced practice registered nurses and certified nurse anesthetists in patient care (August 2025)
TexasPhysicians, dentists, nurses, physician assistants: one year, five miles, buyout capped at one year's salary; must be in writing (September 2025)
PennsylvaniaHealth-care practitioners: one year maximum; void if practitioner dismissed without cause; patient notice (2025)
MarylandVoid for health-care workers earning $350,000 or less; one year and ten miles above that (2025)
IndianaVoid for primary care physicians; buyout and notice rules for others
WyomingPhysician non-competes void (2025)
LouisianaPhysician 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

  1. 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.
  2. Apply thresholds annually. Indexed figures change each January; an agreement valid when signed may fall below the line.
  3. Follow notice rules exactly. Illinois, Oregon, Colorado, Massachusetts and the District of Columbia void agreements for a missed notice period.
  4. Separate health-care practitioners into state-specific templates; a general form will be void in at least eight states.
  5. Prefer narrower tools — confidentiality, customer non-solicitation, trade-secret protection — which survive in nearly every state and which the FTC has not challenged.
  6. Watch the FTC's case list. Health-care, staffing and low-wage employers remain its stated priorities.
Frequently asked questions
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 Okafor

Federal courts correspondent, New York

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.