Non-compete enforceability map (2026)

The 2026 state of play#

Post-employment non-competes — clauses that restrict where you can work or what business you can operate after leaving a job — have been a fixture of American employment contracts for decades. Their enforceability has always varied by state, but the variation has accelerated sharply since 2022. The legal map as of mid-2026 looks materially different from the map of even five years ago, and workers navigating a severance agreement need an up-to-date picture before signing anything.

The core dynamic is a growing legislative split between jurisdictions that view non-competes as an anti-competitive restraint on worker mobility — and are legislating accordingly — and jurisdictions that continue to treat them as an ordinary contract right subject only to common-law reasonableness review. The first camp has been growing faster. California has long had a near-categorical ban; North Dakota and Oklahoma have had full bans for decades. Minnesota joined in July 2023. Colorado, Illinois, Washington, Virginia, Oregon, and Maine have enacted wage-threshold restrictions that void non-competes for workers below defined earning levels. Massachusetts requires paid garden leave or equivalent consideration during the non-compete period, which is a different regulatory model but achieves similar practical constraint.

In the remaining majority of states, non-competes are enforceable if they satisfy a multi-factor reasonableness test: the restriction must protect a legitimate business interest (trade secrets, confidential customer relationships, or specialized training); the geographic scope and duration must be reasonable relative to that interest; and the restricted activities must not sweep broader than necessary. Courts in these states have wide discretion. Some freely blue-pencil (rewrite) overreaching clauses; others apply a strict all-or-nothing construction. That distinction has enormous practical consequences: a Texas employee presented with a nationwide non-compete covering all competitive activity for two years faces a court that will likely rewrite the clause to something narrower rather than void it entirely, while a Wisconsin employee faces a court that has historically applied that state’s statute with relatively strict construction.

The FTC attempted in April 2024 to resolve this patchwork with a single federal rule. The rule was blocked before it could take effect and its status remains contested. State law governs in every case as of mid-2026, and knowing your state’s current posture is the essential first step in evaluating any non-compete clause in a severance agreement.

For workers in ban states, the important tactical point is not just that the non-compete is likely void — it is that its inclusion in a severance agreement does not automatically poison the rest of the agreement. The severability clause (almost always present) means a court can strike the invalid non-compete and leave the rest of the release intact. That dynamic affects negotiating strategy: you cannot threaten to walk away from the entire package simply because the non-compete is unenforceable, but you can demand its removal before signing as a matter of accuracy and personal clarity, and you can use its unenforceability as leverage to negotiate other concessions. See the non-compete release valuation scenario for a model of how to put a dollar figure on the leverage.

The four enforcement dimensions#

Regardless of which state’s law applies, non-compete enforceability analysis turns on four dimensions: whether the state has a statutory ban or limit, whether the court will blue-pencil an overreaching clause, what consideration the non-compete requires to be valid, and when the state last changed its rules. Each dimension is analytically distinct and can shift the outcome independently.

(a) Statutory ban or limit.The most decisive factor is whether the legislature has acted to restrict or prohibit post-employment non-competes. When a statute categorically voids a non-compete — as California’s Business and Professions Code § 16600 does — no amount of drafting sophistication can rescue the clause. The employer can write the most carefully tailored, narrowly scoped non-compete imaginable, and it is still void in California for a California-based employee, regardless of a choice-of-law clause pointing to another state (post-SB 699). When a statute restricts non-competes to higher-earning workers — as Colorado, Illinois, and Washington do — the analysis turns on whether you were above the applicable wage threshold at the time you signed, not at the time you are trying to enforce or escape the clause. When no statute addresses non-competes at all, common law governs.

(b) Blue-pencil doctrine.In states that apply a reasonableness test without a statutory ban, courts must decide what to do when they find a non-compete clause unreasonably broad. The blue-pencil doctrine permits a court to rewrite the clause — narrowing the geographic scope, shortening the duration, or limiting the restricted activities — to make it enforceable. Courts in Texas, Florida, Georgia, and many other states apply a robust blue-pencil power, which means employees in those states cannot rely on the employer’s overreach as a complete defense. A Texas employer that writes a nationwide, five-year non-compete knows a Texas court will likely reform it to a 12-month, regional restriction rather than void it entirely. In contrast, California, Minnesota, North Dakota, and Oklahoma apply a strict prohibition — there is nothing to blue-pencil when the statute voids the clause categorically. Wisconsin and North Carolina historically applied strict construction that limited or eliminated the blue-pencil power, though the practical effect varies by fact pattern.

(c) Consideration requirement.A non-compete must be supported by legal consideration — something of value exchanged for the promise not to compete. At the time of initial hiring, the job offer itself is typically sufficient consideration. The harder question arises when a non-compete is presented mid-employment (without a promotion or raise) or in a severance agreement to an employee who is already being terminated. Several states require independent consideration — something beyond continued employment or the receipt of severance — to support a non-compete. Illinois, under the Freedom to Work Act, requires at least two years of continued employment or independent consideration for a non-compete signed after initial hiring. Pennsylvania courts have grappled with the “Socko rule” requiring independent consideration. In contrast, Florida and Texas treat the severance payment itself as sufficient consideration for a post-employment non-compete signed as part of a separation agreement.

(d) Recency of change.Non-compete law has been moving quickly. Rules that were accurate in 2020 may be materially outdated. California’s SB 699 (effective January 1, 2024) and AB 1076 (also 2024) significantly extended the pre-existing ban to cover out-of-state agreements and imposed new notification requirements. Minnesota’s HF 3035 (effective July 1, 2023) converted that state from a reasonableness jurisdiction to a near-categorical ban. Colorado’s HB 22-1317 overhauled its non-compete statute in 2022, converting a vague common-law test to a specific wage-threshold regime. When reviewing any secondary source — including this guide — verify the effective date of the cited statute before relying on it. The table in Section 5 below includes a “Recent Change” column flagging jurisdictions where the law has shifted since 2022.

Bans and near-bans: the categorical prohibition states#

Five jurisdictions now operate with rules that amount to a categorical or near-categorical prohibition on post-employment non-competes for most workers. Understanding exactly what each prohibition covers — and what exceptions remain — is essential before treating a non-compete clause in a severance agreement as a nullity.

California. California Business and Professions Code § 16600 has voided contracts in restraint of trade since 1872. The California Supreme Court rejected a reasonableness exception in Edwards v. Arthur Andersen LLP (2008), confirming that California applies a near-absolute prohibition rather than a common-law reasonableness test. The limited statutory exceptions are: the sale of a business (where the seller agrees not to compete with the buyer), the dissolution or dissociation of a partnership, and the dissolution or sale of a limited liability company. These exceptions are narrow and do not cover ordinary employer-employee non-competes.

SB 699, signed in September 2023 and effective January 1, 2024, added § 16600.5, which makes it unlawful for an employer to attempt to enforce a non-compete against a California-based worker even if the agreement was entered into in another state and even if the agreement nominates another state’s law as controlling. This statute directly addresses the employer tactic of structuring employment contracts under Texas, Nevada, or Delaware law to evade California’s prohibition. Under § 16600.5, a California-based employee may sue for enforcement of this prohibition even if the non-compete was signed in a state that would find it valid. AB 1076 (also effective January 1, 2024) added a separate notice requirement: employers must individually notify California employees of any void non-compete provisions in their contracts.

If you are a California-based employee (working in California, regardless of where your employer is incorporated or headquartered), any post-employment non-compete in your severance agreement is void. Period. The employer cannot enforce it in a California court, and under SB 699, an attempt to enforce it is itself unlawful. You can decline to sign the non-compete clause without losing your entitlement to the remaining severance, provided the agreement has a standard severability clause. See the California severance guide for the full picture of state-specific rules.

North Dakota.North Dakota Cent. Code § 9-08-06 provides that every contract by which anyone is restrained from exercising a lawful profession, trade, or business of any kind is void — with only the same three narrow exceptions as California (sale of a business, partnership dissolution, LLC dissolution/sale). North Dakota courts have consistently enforced this prohibition. Because North Dakota has a small population relative to its geographic size, this rule receives less attention than California’s, but it is equally categorical.

Oklahoma. Oklahoma Statutes title 15, sections 217 and 218 take the same approach as California and North Dakota: contracts that restrain trade or prevent a person from pursuing a lawful profession are generally void. Oklahoma case law has historically applied this prohibition to post-employment non-competes with very limited flexibility. Some courts have carved out narrow trade-secret protection as a substitute framework, but a standard geographic/activity-based non-compete is unenforceable in Oklahoma.

Minnesota.Minnesota enacted HF 3035 in May 2023, codified primarily at Minn. Stat. § 181.988, effective July 1, 2023. The statute voids post-employment non-competes for most employees, with no income threshold — the ban applies to workers at any compensation level. Agreements entered into before July 1, 2023 are not retroactively voided, but any new non-compete or modification to an existing non-compete signed on or after that date is void under Minnesota law. The statute contains no exception for the sale of a business (unlike California), making it arguably the broadest categorical prohibition currently in effect. If you signed your severance agreement after July 1, 2023, any non-compete clause governed by Minnesota law is void.

Colorado.Colorado does not have a categorical ban, but its 2022 reform (HB 22-1317, codified at C.R.S. § 8-2-113) fundamentally restructured its non-compete regime. Under the revised statute, a post-employment non-compete is only enforceable against an employee whose annualized cash compensation meets or exceeds $130,014 (the 2026 threshold, adjusted annually by the Colorado Department of Labor). Below that threshold, the non-compete is void. Even above the threshold, the employer must provide the agreement to the prospective employee at least 14 days before the start of employment (or the date of signing, if mid-employment), and the agreement must be for the protection of trade secrets, technical or business information, or other legitimate business interests. Broader restriction — non-solicitation of customers or clients — requires meeting 60% of the non-compete threshold. Colorado courts may still blue-pencil overreaching agreements above the threshold, but below-threshold non-competes are categorically void without judicial modification.

The FTC non-compete rule: issued, blocked, and on appeal#

In April 2024, the Federal Trade Commission finalized a rule under 16 CFR Part 910 that would have prohibited most post-employment non-compete agreements nationwide. The rule was the most significant federal action on non-competes in U.S. history, and its issuance prompted immediate legal challenges from employers and business groups who argued the FTC lacked the statutory authority to promulgate it.

The rule would have applied to all workers regardless of industry, salary level, or type of non-compete, with a narrow exception for non-competes entered into in connection with the sale of a business by a substantial owner (defined as holding at least a 25% ownership interest). The FTC estimated that the rule would have affected roughly 30 million workers — roughly one in five American employees subject to some form of non-compete at the time.

The rule was challenged almost immediately in the Northern District of Texas, in the case Ryan, LLC v. FTC. On August 20, 2024, U.S. District Judge Ada Brown issued a final judgment setting aside the rule nationwide. The court held that the FTC exceeded its statutory authority under the FTC Act because the Act does not grant the agency substantive rulemaking power to regulate unfair methods of competition through categorical prohibitions. The ruling also cited the Supreme Court’s major questions doctrine, noting that a rule affecting one in five American workers on a matter of broad economic significance requires a clear congressional authorization that was not present in the FTC Act.

The FTC appealed the decision to the U.S. Court of Appeals for the Fifth Circuit, and that appeal was pending as of mid-2026. The Fifth Circuit is widely regarded as among the most skeptical circuits on agency rulemaking authority, and the Supreme Court’s 2024 decision in Loper Bright Enterprises v. Raimondo— which overruled Chevron deference — has further narrowed the legal foundation for the FTC’s position. Most practitioners expect the Fifth Circuit to affirm the district court. A reversal would likely set up further Supreme Court review.

ATS Tree Services, LLC v. FTC was a parallel challenge in the Eastern District of Pennsylvania that reached the opposite conclusion: that court found the FTC did have authority to issue the rule. The circuit split created by these conflicting district court decisions was one argument advanced in favor of Fifth Circuit review, though the August 2024 Ryan decision’s nationwide set-aside mooted the ATS case’s practical effect. Until appellate courts resolve the question definitively, the FTC rule has no operative force.

The practical significance for workers navigating a severance agreement in mid-2026 is this: the FTC rule does not protect you. State law is your only operative protection. If you are in a ban state, you are protected. If you are in a reasonableness state, you are subject to common-law and case-by-case adjudication. The FTC litigation’s most lasting effect may be on the state level: multiple state legislatures cited the FTC’s proposed rule as rationale for enacting their own non-compete restrictions, and that legislative momentum has continued regardless of the federal litigation’s outcome. The trend line in state law is strongly toward restriction. For workers in states that have not yet acted, the question is when — not whether — their legislature may follow Minnesota’s path.

State-by-state enforceability table (50 states + DC)#

The table below summarizes the enforceability posture for each of the 50 states and the District of Columbia as of mid-2026. “Statutory Ban” reflects whether a legislative enactment categorically prohibits or materially restricts non-competes; “Full ban (employees)” means the statute voids post-employment non-competes for almost all employees; “Wage-threshold ban” means the ban applies only below a defined income floor. “Blue-Pencil Allowed” indicates whether courts in that state will rewrite (reform) an overbroad clause rather than void it entirely. “Consideration Required” reflects whether the state imposes any special consideration requirement beyond what common law would require. Verify any citation before relying on it; state statutes change, and this table was compiled as of May 2026.

Wage thresholds are adjusted annually in several states (Colorado, Oregon, Washington). Verify current figures with the relevant state labor agency before relying on a threshold figure in a live negotiation. “Initial employment OK” means the offer of employment is sufficient consideration at hire; mid-employment or post-termination non-competes in those states may require independent consideration under case law.

When your non-compete is unenforceable: using the leverage correctly#

Knowing that a non-compete is likely unenforceable in your state is valuable information, but it requires translation into a practical negotiating strategy. Many employees make one of two mistakes: they either ignore the unenforceable clause entirely (missing leverage) or they overestimate how much the clause’s voidness shifts the balance (and overplay their hand, irritating a process that is already stressful). The correct approach lies between these extremes.

The first point to understand is what a void non-compete does not do. It does not void the rest of the severance agreement. Under a standard severability clause — which almost every severance agreement includes — a court finding the non-compete unenforceable simply strikes that clause and leaves the release, the consideration, the non-disparagement provisions, and everything else intact. This means that signing a severance agreement with a void non-compete does not legally protect you any less than signing the same agreement without one. You are giving up the same claims, receiving the same consideration, and incurring the same obligations under all the other clauses. The non-compete clause is simply severed.

But that analysis also means that the employer is not buying much by including the non-compete clause in a ban state. They know (or should know) the clause is unenforceable. Their primary reason for including it is inertia — standardized agreement templates that travel from state to state without adjustment — and occasionally a hope that you will treat the clause as a psychological deterrent even if it has no legal force. Signing an unenforceable non-compete does not make it enforceable. Courts in California, Minnesota, Oklahoma, and North Dakota will not enforce it regardless of the signature.

The leverage point is this: if the employer wants to include a non-compete clause in your severance agreement despite it being void in your state, that gives you a negotiation chip. You can decline to sign the clause, and in exchange for agreeing not to make an issue of it (or not to publicize the employer’s attempt to enforce a void clause, which could itself run afoul of California’s post-SB 699 rule), you can ask for something of genuine value. Common exchanges include: a higher severance payment, an extended COBRA subsidy, vesting acceleration of RSUs or options approaching a cliff, or the removal of an overly broad non-solicitation of customers clause (which may or may not be separately enforceable). These concessions are often worth significantly more than the non-compete clause is worth to the employer — especially in a ban state where they cannot enforce it anyway.

Garden leave is worth a separate discussion. Massachusetts’ Noncompetition Agreement Act requires employers who impose a non-compete to pay the employee at least 50% of their base salary during the non-compete period (typically one year), or provide mutually agreed-upon consideration — and the statute voids non-competes against employees who are laid off. If you are in Massachusetts and you are being laid off, the non-compete is void as a matter of statute: you cannot be laid off and simultaneously bound to a non-compete. If you were not laid off but are negotiating a separation, the garden-leave requirement means any non-compete in your severance must be accompanied by substantial continuing pay, which fundamentally changes the economic calculus for both sides.

One more tactical point: the inclusion of a void non-compete in a ban state is not just a nullity — in California (post-SB 699), the attempt to enforce it is unlawful. If your California employer demands you sign a non-compete clause and threatens to withhold severance if you refuse, they may be committing an unfair business practice under California law. That gives you — and potentially your attorney — a separate lever. The employer who understands California law will not press this point. The employer who does press it is either uninformed or gambling that you will not push back. Push back. For a worked example of how to value the leverage, use the non-compete release valuation scenario in our calculator. For a state-specific view of California’s overall severance rules, see the California severance guide.

In enforcing states (Texas, Florida, Georgia, and most of the Southeast and Midwest), the calculus is different. A non-compete that will be enforced — possibly reformed by a court to something narrower than written, but enforced — has real value to the employer and real cost to you. Here the leverage is to negotiate the clause narrower before signing. Push on four dimensions: (1) geographic scope, limiting restriction to the markets you actually touched, not a national or global footprint; (2) duration, pushing from 24 months down to 12 months, which is where courts often land in reformation anyway; (3) restricted activities, limiting the clause to your specific function rather than any role with any competitor; and (4) the consideration itself, making clear that the severance payment is the explicit consideration for the non-compete and arguing that a longer non-compete warrants a proportionally larger severance payment. Use the severance calculator to build the after-tax model before committing to a number.

State of residence vs. state of employment: choice-of-law conflicts#

The proliferation of remote work since 2020 has sharpened a long-standing problem in non-compete law: which state’s rules apply when the employee lives in one state, works remotely for an employer in another, and the severance agreement nominates a third state’s law as the governing law? The answer is not always obvious, and it matters enormously when the states at issue are on opposite ends of the enforceability spectrum.

Under traditional choice-of-law analysis (the Restatement Second of Conflict of Laws § 187), courts generally honor a contractual choice-of-law clause unless: (a) the chosen state has no substantial relationship to the parties or the transaction, or (b) applying the chosen state’s law would be contrary to a fundamental public policy of a state that has a materially greater interest in the determination of the issue. Non-compete enforceability is exactly the kind of issue that triggers the public policy exception in states with categorical bans. California, North Dakota, Oklahoma, and Minnesota have each declared, through legislation, that post-employment non-competes are contrary to the fundamental public policy of those states. That declaration is precisely the predicate for overriding a choice-of-law clause under § 187(2)(b).

California’s SB 699 codified this result into statute rather than leaving it to common-law conflict-of-laws analysis: a California court must apply California law to a California-based employee’s non-compete regardless of the choice-of-law clause. The question becomes who counts as a California-based employee. Courts and commentators have generally interpreted “California-based” to mean an employee who primarily performs work in California — which for a remote worker means where they actually work day-to-day, not where the employer is incorporated or where they were originally hired. An employee hired in Texas who later relocated to California and continued working remotely for the same employer is likely protected by California’s ban from the point of relocation, even if their original employment agreement specifies Texas law.

The reverse scenario is also common and more favorable to the employer: a California-incorporated company with offices in San Francisco whose employee relocates to Florida and continues working remotely. The employee is now in a state that has no categorical non-compete ban. Florida law would likely be the operative law if a dispute arose there. If the employment agreement specifies California law, the result might differ (since California law would still void the clause) — but the employee might find themselves pursuing relief in a Florida court, and Florida’s conflict-of-laws analysis might not give the same deference to California’s public policy. Outcome uncertainty is high in cross-border remote work situations.

Practical guidance for workers navigating this: identify both the state where you primarily perform work and the state nominated in the choice-of-law clause of your severance agreement. If they are different, and if the ban/no-ban status differs between them, you have a conflict-of-laws issue that warrants brief attention from an employment attorney who practices in the relevant jurisdictions. The cost of that consultation — typically $200–$400 for an hour — is small relative to the consequences of incorrectly assuming your state’s ban applies when it may not, or incorrectly assuming a foreign state’s law governs when your state’s ban would actually override it.

For workers in states that are not ban jurisdictions, the forum for any future enforcement action also matters. Employers typically sue to enforce non-competes in the state where their business is located, not where the employee lives. If a Texas employer is seeking to enforce a non-compete against a former employee now living in Kansas, they will likely file in Texas state court under Texas law. Kansas applies a reasonableness standard, but if the employer files in Texas, Texas law governs under Texas choice-of-law principles (and Texas choice-of-law rules generally enforce Texas-law clauses). The employee’s potential defense — that Kansas law should apply — is a complicated argument to make in a Texas court on short notice while also looking for a new job. Understanding this forum-shopping dynamic before signing is the reason the choice-of-law and forum-selection clauses in a severance agreement warrant careful attention alongside the non-compete clause itself. For the complete picture of how choice-of-law clauses interact with the rest of your severance agreement, see Reading your severance agreement, particularly the choice-of-law section.

Workers in states without a ban should also know that the federal WARN Act’s preemption analysis (relevant to states with their own WARN laws) is separate from non-compete conflict-of-laws analysis — different legal issue, different rule. If you are in a state with a mini-WARN law and the federal-only WARN states are relevant to your situation, see our federal-WARN-only states guide for the WARN picture. And for workers in states without a state income tax (which affects the after-tax value of the consideration tied to your non-compete), see the no-income-tax states overview.