The FTC Noncompete Ban Is Not in Force—State Law Still Decides

Some US noncompete agreements remain enforceable. The FTC’s nationwide Noncompete Rule did not void them: a district court stopped the agency from enforcing the rule on August 20, 2024, and the FTC took steps to dismiss its appeal on September 5, 2025. The agency’s current rule summary states that the rule is not in effect and is not enforceable.

Enforceability therefore turns principally on applicable state law and the particular agreement, with a separate check for any government order directed at the employer. Before joining a competitor or starting a business, a worker needs to identify the controlling state rules, test the covenant against them and determine whether a federal or state order changes the result.

Identify the state law that may control

Do not assume the employer’s headquarters supplies the answer. Relevant connections can include where the worker lived and performed the old job, where the proposed work will occur, and which law and forum the contract selects. For remote, relocating or multistate workers, those connections may point in different directions and require a conflicts-of-law analysis.

The variation among states is substantial. The Economic Innovation Group’s state tracker reports four states with full employment-context bans and 34 states plus the District of Columbia with statutory restrictions, while cautioning that its map does not capture every limit created by court decisions. Even a “full ban” category can contain exceptions, including covenants connected with the sale of a business.

Effective dates matter too. Determine when the covenant was signed, renewed or materially amended and whether the relevant state reform covers older agreements or only later ones. A promotion, equity award, separation agreement or contract amendment may contain a newer restrictive covenant governed by a different rule.

Run the complete agreement through a state-first checklist

Review the whole contract and every amendment, not only the paragraph labeled “noncompete.” Definitions of competitors, remedies, governing law and forum selection may appear elsewhere and can determine what the restriction actually reaches.

1. Worker category: Check whether the state distinguishes employees from independent contractors or has separate rules for executives, healthcare professionals, broadcasters or other occupations. Determine whether the covenant arose from ordinary employment or a business sale.
2. Compensation: Compare the worker’s earnings with the correct statutory threshold for the relevant year and category. Washington’s official 2026 threshold notice, for example, sets $126,858.83 for employees and $317,147.09 for independent contractors, demonstrating why an older salary figure cannot safely answer the question.
3. Notice and consideration: Determine whether the employer provided the covenant by any required deadline and supplied whatever consideration state law demands. The rule may differ between an agreement presented before hiring and one signed after work begins.
4. Duration: Establish when the restricted period begins, how long it lasts and whether another provision purports to extend it. State law may impose a cap, a presumption or a broader reasonableness test.
5. Geography: Map the practical territory. Language covering every office, customer area or national market may reach much farther than a simple mileage figure suggests.
6. Restricted activity: Compare the clause with the planned job or business. A ban on any position with a competitor is broader than a restriction limited to services performed, customers served or confidential knowledge acquired.
7. Protected interest and remedy: Identify the interest the employer claims and whether the court may narrow an overbroad covenant. The New York attorney general’s guidance, for example, says enforceability depends on legitimate employer interests, employee hardship, public harm, duration and geography, and explains that a court may reject or narrow unreasonable terms.

Check for an order covering the employer

The failed nationwide rule did not end case-specific federal antitrust enforcement. On June 22, 2026, the FTC finalized its Rollins consent order, requiring the company to stop enforcing noncompetes against more than 18,000 employees nationwide and to notify covered current and former workers that they may compete, including by starting a business.

That order does not cancel agreements at unrelated employers. Search federal and state case records under the employer’s exact legal name and known parent, subsidiary or former names. If a judgment, consent order or settlement appears, read its definitions, covered-worker provisions and effective date; a warning letter or investigation alone is not equivalent to a binding final order.

Match the legal test to the move you plan to make

Translate the proposed move into concrete facts: the new employer or business, duties, location, customers, products and start date. Compare those facts with the covenant’s definitions, territory, restricted activities and duration. Also review separate customer- and employee-nonsolicitation, confidentiality, invention-assignment and trade-secret provisions, because an unenforceable noncompete does not automatically erase other obligations.

Preserve the signed agreement, amendments, compensation records, job descriptions, termination documents and communications about restrictions. A written release from the former employer may resolve uncertainty, but silence should not be treated as consent. Do not take confidential files or customer lists regardless of the noncompete’s status.

If the planned move presents a credible risk of a demand letter or injunction, the decisive question is not whether noncompetes are generally “legal” in a state. It is whether this covenant, applied to this worker and this activity, satisfies the controlling law and remains outside any binding order covering the employer—a question that may require advice from counsel licensed in the relevant state.

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