Are non-competes enforceable?

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Short answer: It depends on your state and the specific terms of your agreement. California, North Dakota, Oklahoma, and Minnesota broadly void employee non-competes. Several other states (Illinois, Massachusetts, Washington, Colorado, Oregon, DC) impose salary thresholds and procedural requirements. Most other states apply a reasonableness test on duration, geography, and activity scope. The FTC issued a national ban in April 2024, but it was blocked in federal court in August 2024 and remains on appeal.

The state-by-state landscape

Non-compete law is governed entirely by state law (with a federal overlay that's currently in flux, more below). State law falls into four tiers:

Tier 1: broadly void. Employee non-competes are unenforceable regardless of scope.

California (Cal. Bus. & Prof. Code § 16600). The 2024 amendments (SB 699 and AB 1076) further strengthened this and even void out-of-state non-competes signed by employees who later work in California.
North Dakota (N.D. Cent. Code § 9-08-06)
Oklahoma (Okla. Stat. tit. 15, §§ 217-219)
Minnesota (Minn. Stat. § 181.988), for agreements signed on or after July 1, 2023

Tier 2: strict standards with salary thresholds or procedural requirements. Non-competes are enforceable but only under specific conditions.

Illinois: salary threshold of $75,000+ for non-competes (Illinois Freedom to Work Act, 820 ILCS 90). Plus the Fifield consideration rule: continued employment for less than 2 years is generally insufficient consideration.
Massachusetts: 12-month maximum duration, garden leave requirement (50% of base salary or other consideration), procedural requirements including notice and right to counsel (MA G.L. c. 149 § 24L).
Washington: salary threshold of $116,594.17 for employees, $291,485.43 for contractors (2024 figures, indexed annually) under RCW 49.62.
Colorado: salary threshold of $124,500 (2024) for non-competes; only enforceable to protect bona fide trade secrets (C.R.S. § 8-2-113).
Oregon: salary threshold tied to median family income, ~$108K (2024) (ORS 653.295).
DC: banned for employees earning under $150,000 (DC Code § 32-581.01).

Tier 3: standard reasonableness test. Most other states apply a balancing test on duration, geography, and activity scope, plus legitimate business interest. Includes NY, NJ, PA, TX, GA, FL, NC, CT, OH, MI, IN, WI, IA, MO. Enforceability varies significantly within this tier.

Tier 4: industry-specific limits. Some restrictions apply across all tiers:

Attorney non-competes: void under ABA Model Rule 5.6 and state equivalents
Physician non-competes: heavily restricted in many states (MA bans them entirely)
Brokers: Protocol for Broker Recruiting (industry agreement) lets clients follow registered representatives moving between member firms

For a state-specific deep dive, see California non-compete law 2026 and Massachusetts non-compete law.

The reasonableness test

In Tier 3 states, courts apply a balancing test asking whether the restrictions are:

Reasonable in duration: 6 months is generally fine; 12 months is heavily scrutinized; 24 months is rarely upheld outside senior executive or sale-of-business contexts.
Reasonable in geography: limited to areas where the employer actually competes and where the employee actually worked. National or continental geographic scope is presumptively overbroad for most roles.
Reasonable in activity scope: limited to genuinely competitive activity. "Working in any capacity at a competitor" is broader than "providing the same services to the same customer accounts."
Necessary to protect a legitimate business interest: trade secrets, customer goodwill, specialized training, or the employer's investment in customer-facing development. General competitive concern is not a legitimate interest.
Not unduly harsh on the employee: courts consider whether enforcement would prevent the employee from earning a living.

When a non-compete fails the reasonableness test, courts in some states (Florida, Georgia, Nevada, Texas, Ohio) will reform the agreement to make it reasonable. Courts in other states (North Carolina, Virginia, Wisconsin) apply strict blue-pencil rules: they can only strike out unreasonable provisions, not rewrite them. A handful of states will void the entire clause if any part is unreasonable.

The consideration problem

Even where state law allows non-competes, the agreement must be supported by consideration: something the employee received in exchange for signing. The rules vary:

At hire: the job offer itself is sufficient consideration. Non-competes signed at the start of employment are generally enforceable on the consideration prong (subject to scope and state law).
Mid-employment: states vary. Illinois requires substantial additional consideration; continued employment for at least 2 years is sometimes sufficient (Fifield v. Premier Dealer Services, 2013 IL App). Some states accept continued employment alone; others require new compensation, equity, or promotion tied specifically to signing.
At separation (as part of severance): the severance itself can serve as consideration, but the scope must be reasonable and the agreement must be properly documented.

If you signed a non-compete mid-employment and received nothing new in exchange beyond continued employment, the agreement may be void for lack of consideration depending on your state.

The federal layer

In April 2024, the Federal Trade Commission issued a final rule banning most employer-employee non-competes nationwide. The rule would have voided existing non-competes for all but a narrow category of senior executives.

In August 2024, the United States District Court for the Northern District of Texas (Ryan LLC v. FTC) issued a final judgment setting aside the rule. The court held that the FTC lacks statutory authority to issue substantive competition rules. The decision is on appeal to the Fifth Circuit.

Until the appellate decision and any subsequent Supreme Court review, the FTC rule is not in effect. State law continues to govern.

Separately, the National Labor Relations Board (NLRB) has taken the position that broad non-competes may violate Section 7 of the NLRA for non-supervisory employees. This affects severance-bundled non-competes especially.

What this means for you

If your non-compete is in a Tier 1 state and you work there, it's almost certainly unenforceable. Document your state of employment carefully and save records.

If your non-compete is in a Tier 2 state, check the threshold and procedural requirements first. Many agreements fail the procedural prong (missing notice, missing garden leave, drafted before the relevant statute) which voids the substantive restriction.

If your non-compete is in a Tier 3 state, the enforceability turns on the specific scope. Overbroad agreements often get blue-penciled to narrower terms. Reasonable agreements typically hold up. A specific analysis of your clause against state case law is the only way to know where you stand.

In every case, fear of enforcement is itself the enforcement mechanism. Many employers send aggressive cease-and-desist letters but never actually file suit, because the litigation cost outweighs the expected outcome. Knowing where your agreement actually stands changes the calculus significantly.

What to do next

If you want a delivered analysis of your specific non-compete, with cited authority for your state and a clear verdict per clause, we deliver one in 24 hours for $199. See Non-Compete Review.

Sources

FTC Non-Compete Rule, 16 CFR Part 910 (April 2024)
Ryan LLC v. FTC (N.D. Tex., Aug 2024)
Cal. Bus. & Prof. Code § 16600 (and 2024 amendments)
820 ILCS 90 (Illinois Freedom to Work Act)
MA G.L. c. 149 § 24L (Massachusetts Noncompetition Agreement Act)
RCW 49.62 (Washington)
Fifield v. Premier Dealer Services, 2013 IL App (1st) 120327
McLaren Macomb, 372 NLRB No. 58 (2023)

Get your contract reviewed

If you want a delivered review of your specific document with cited authority and counter language, see https://trycounteroffer.com/non-compete.

Last updated: Sun May 31 2026 00:00:00 GMT+0000 (Coordinated Universal Time)

Counteroffer is a contract analysis service, not a law firm. This page is informational, not legal advice.