Non-Compete Agreements: What Employees Need to Know
Worried about a non-compete clause? Learn the current federal status, state-law limits, and employment-rights issues to review before changing jobs.
What Is a Non-Compete Agreement?
A contract provision restricting an employee from working for a competitor or starting a competing business for a specified period after leaving. Typically defines geographic area, time period, and prohibited activities.
State Rules Are Changing
The FTC's nationwide Non-Compete Rule is not in effect and is not enforceable. The Commission acceded to vacatur in 2025, and a February 12, 2026 Federal Register rule removed the Non-Compete Rule from the Code of Federal Regulations. That federal status does not end the analysis: state statutes, state common law, contract language, and other workplace-rights protections may still affect whether a restriction can be used against an employee.
When Non-Competes May Be Unenforceable
Courts may refuse to enforce restrictions that are unreasonably broad geographically, excessively long, not supported by legitimate business interests, imposed without adequate consideration, or overly restrictive. A non-compete can also raise separate employment-law questions when it is used to punish protected activity, interfere with non-waivable employee rights, or chill workers from acting together about workplace conditions.
What to Do If You Have One
Review the exact language, the state named in the agreement, the job duties it restricts, any compensation or notice tied to the clause, and whether your employer has threatened discipline or legal action. Get individualized legal advice before accepting a new position or ignoring the clause; do not assume a restriction is unenforceable just because the FTC rule is not in effect.
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This article is general information, not legal advice. For a review of your situation, get a free consult with the YesLawyer team.
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