Non-Compete Ban States: Complete 2026 Guide
Non-compete agreements have long stopped millions of workers from switching jobs or starting their own businesses. But the rules are changing fast. As of 2026, several states have banned or sharply limited non-competes, and federal action may be next.
States That Ban Non-Competes (2026)
| State | Status | Key Details |
|---|---|---|
| California | Banned | Complete ban since 1872. Business Code Section 16600. |
| North Dakota | Banned | Not allowed under Century Code 9-08-06. |
| Oklahoma | Banned | Usually not enforced under Title 15, Section 219A. |
| Minnesota | Banned | Banned effective July 1, 2023 for all employees. |
| Colorado | Limited | Banned for workers earning under $123,750/year (2026). |
| Washington | Limited | Banned for workers earning under $116,593/year. |
| Oregon | Limited | 18-month max duration, income threshold applies. |
| Illinois | Limited | Banned for workers earning under $75,000/year. |
| Maine | Limited | Banned for low-wage workers, 1-year max duration. |
| Maryland | Limited | Banned for workers earning under $15/hour or $31,200/year. |
| Texas | Enforced | Can be enforced if tied to a valid agreement. |
| Florida | Enforced | Strong employer protections, presumed valid if reasonable. |
FTC Non-Compete Ban: Current Status
Federal Rule Blocked
In August 2024, a federal judge in Texas blocked the FTC's nationwide non-compete ban. This rule would have gotten rid of nearly all non-competes. It is stuck in the courts, and appeals are still going on as of 2026.
The FTC says non-competes hold down wages by about $296 billion per year and make it harder for workers to move to better jobs. Even though the federal rule is blocked, this push has led many states to pass their own limits.
What Makes a Non-Compete Enforceable?
In states where non-competes are allowed, courts usually look for these things:
- A real business reason: Like protecting trade secrets, private info, or customer relationships
- Fair limits: The area and time period must be reasonable
- Something in return: You must get something of value (a job offer, promotion, or bonus)
- Not too extreme: It can't stop you from earning a living altogether
Typical "Reasonable" Limits
- Duration: 6 months to 2 years (longer rarely enforced)
- Geography: 10-50 miles, or specific customer lists
- Scope: Specific role/industry, not all employment
What To Do If You Have a Non-Compete
1. Check Your State
If you are in California, Minnesota, North Dakota, or Oklahoma, your non-compete likely cannot be enforced no matter what you signed.
2. Review the Terms
Even in enforcement-friendly states, overly broad non-competes get thrown out. Look for:
- Duration over 2 years (courts often throw these out)
- Nationwide geographic scope (usually excessive)
- Restrictions on unrelated industries
3. Negotiate Before Signing
The best time to negotiate is before you sign. Request:
- Shorter duration
- Smaller geographic radius
- Specific carve-outs for certain employers
- Garden leave (getting paid during the restricted period)
Pro Tip: Get It In Writing
If an employer verbally tells you "we never enforce these," get that in writing. Verbal promises mean nothing when they sell the company or new management takes over.
Industries Most Affected
- Healthcare: 45% of physicians have non-competes
- Technology: Common for engineers and executives
- Finance: Especially for client-facing roles
- Sales: Protecting customer relationships
- Fast Food: Yes, even sandwich makers have been restricted
Resources
- FTC Non-Compete Rule (Official)
- Your state's Department of Labor website
- Employment lawyers who focus on non-compete cases
Have a Contract with a Non-Compete?
Upload your employment agreement to SignSafe for a quick AI review. We'll flag limiting clauses, compare them to your state's law, and show you where you can negotiate.
Analyze Your Contract FreeLast updated: February 4, 2026. This article is for information only and is not legal advice. Talk to a lawyer in your state for help with your situation.