Non-Compete Agreements: Are They Enforceable?
A non-compete can limit where you work next — but whether it is enforceable depends heavily on your state, and the FTC’s nationwide ban is not in effect.
Last reviewed: May 26, 2026 by the BizLeaseCheck Editorial Team
General information, not legal advice.
Overview
A covenant not to compete restricts an employee from working for a competitor or starting a competing business for a period of time after leaving. It is the restrictive covenant with the greatest effect on your future, and the one with the most uncertain enforceability.
Enforceability turns almost entirely on state law and the reasonableness of the scope, duration, and geography — so the same clause can be fully enforceable in one state and void in another.
Topics to check
Some states broadly void employee non-competes. California, for example, makes contracts that restrain a lawful profession, trade, or business void by statute, and reads that rule broadly to void employment non-competes no matter how narrowly tailored, unless a statutory exception applies. Other states bar non-competes below a wage threshold, and many states enforce non-competes only if they are reasonable in scope, duration, and geography and protect a legitimate business interest.
Because of this variation, a non-compete’s enforceability is a question for a licensed attorney in the governing-law state — do not assume it is either ironclad or worthless.
California Bus. & Prof. Code § 16600 (CA Legislative Information)In 2024 the FTC issued a rule that would have banned most employee non-competes nationwide. A federal court set that rule aside in August 2024, and the FTC later moved to accede to the vacatur, so the rule is not in effect and is not being enforced.
Practically, that means non-competes are still governed by state law — there is no nationwide federal ban — and you should evaluate any non-compete under the law of the governing-law state.
FTC — Noncompete Rule (status)Look at the restricted activities (is it any competitor, or only direct competitors in your specific role?), the duration (6–12 months is more defensible than multiple years), and the geography (a defined region versus "nationwide" or "anywhere the company does business"). Narrower covenants are both easier to live with and more likely to be enforced where non-competes are allowed.
Where you can, negotiate to narrow the scope, shorten the term, limit it to genuine competitors, or replace it with a non-solicitation and confidentiality obligation, which restrict less of your future.
Covenant not to compete (Cornell LII Wex)Key takeaways
- Non-compete enforceability is highly state-specific — some states void them, others enforce reasonable ones.
- California voids employment non-competes by statute, no matter how narrowly tailored, absent an exception.
- The FTC’s 2024 nationwide non-compete ban was set aside by a court and is not in effect.
- Scope, duration, and geography drive both enforceability and how much it restricts you.
- Negotiate to narrow it, or substitute a non-solicit and NDA — and confirm enforceability with a state attorney.
Official resources
Legal-review notes
Guide confidence marker: Needs lawyer verification.
- Non-compete enforceability varies dramatically by state and turns on the exact scope, duration, and geography; confirm with a licensed attorney in the governing-law state.
- The status of federal and state non-compete rules can change; verify the current law before relying on it.
Frequently asked questions
Are non-compete agreements enforceable?
It depends on your state. Some states (such as California) void employee non-competes by statute; others enforce them only if reasonable in scope, duration, and geography and tied to a legitimate business interest. There is no nationwide federal ban, so enforceability is a state-law question for a licensed attorney.
Did the FTC ban non-competes?
The FTC issued a rule in 2024 that would have banned most employee non-competes, but a federal court set it aside in August 2024 and the FTC moved to accede to the vacatur. The rule is not in effect, so non-competes remain governed by state law.
How long can a non-compete last?
There is no single national limit. Where non-competes are enforceable, courts look at reasonableness — a 6–12 month term tied to a defined role and region is far more defensible than a multi-year, nationwide restriction. The enforceable length varies by state.