Non-Compete Agreements Under Siege: FTC Rulemaking and State Law Developments

A Cornerstone Cracks

For thirty years, Northwind Instruments—a fictional but entirely representative company that designs precision sensors—relied on a single tool to protect what it had built. Every engineer signed a non-compete on the first day, a one-page form that had not been meaningfully revised since the Clinton administration. It felt like a seatbelt: simple, universal, always there.

Then Northwind's head of product resigned to join a direct competitor, and the general counsel discovered that the seatbelt had quietly turned into a noose around the company's own neck. The departing engineer worked remotely from California, where the non-compete was not merely unenforceable but void by statute—and void, under recent amendments, even though she had signed it years earlier in another state under another state's law. The agreement had been presented on her first day of work, which several states now treat as a fatal procedural defect. And the sweeping "you may not work for any competitor anywhere, in any capacity" language that once felt protective now read like a textbook example of the overreach courts have begun striking down on sight. Northwind had not lost its legitimate interest in its sensor designs or its customer relationships. It had simply discovered that the instrument it trusted to protect them had stopped working—and that it had stopped working some time ago, without anyone noticing.

Northwind's predicament is the predicament of American employers generally. The non-compete agreement—for decades a cornerstone of strategy for protecting trade secrets, customer goodwill, and competitive advantage—is under assault from nearly every direction at once. The Federal Trade Commission tried to abolish it outright with a nationwide ban. State legislatures are steadily narrowing its reach through income thresholds, notice requirements, industry carve-outs, and categorical prohibitions. Courts are scrutinizing agreements they once might have rubber-stamped. And an entire ecosystem of alternative protective mechanisms has emerged to fill the void. The stakes are not abstract: by the U.S. Treasury Department's 2016 estimate, roughly 18% of American workers—about 30 million people—were bound by non-competes, and nearly 40% had been subject to one at some point in their careers. For an employer, the loss of a key employee to a rival can mean the loss of trade secrets, customer goodwill, and years of investment in specialized training, all in a single resignation email.

This article maps the new landscape and the strategy for navigating it, following Northwind through the choices a post-ban world demands. It traces the FTC's ban from inception to demise, dissecting the statutory-authority debate that doomed it. It surveys the state patchwork that now governs employer practice, from outright bans to inflation-indexed wage thresholds. It explains the common-law reasonableness test and the blue-pencil problem that determines whether an overbroad agreement gets saved or struck. And it details the alternatives—garden leave, forfeiture-for-competition clauses, enhanced non-solicitation and confidentiality agreements, and the Defend Trade Secrets Act—that sophisticated employers now deploy to protect their interests without betting everything on a single restraint. For the closely related discipline of protecting the underlying information, our work on trade secrets in the age of remote work and cloud computing and building a trade secret protection program from scratch are natural companions.

The Bargain at the Heart of Every Non-Compete

To understand why non-competes are in trouble, start with what they are: a deliberate restraint of trade that the common law tolerates only grudgingly. A non-compete bars a former employee from working for competitors—or starting a competing business—for a defined period after the employment ends. The agreement asks a court to do something courts dislike doing: to prevent a person from earning a living in their chosen field. Courts have therefore always policed these agreements with a skeptical eye, enforcing them only where they are reasonable and "no greater than necessary to protect the employer's legitimate business interests."

That last phrase carries enormous weight, because it means a non-compete is only as good as the interest it protects. Across nearly every jurisdiction, three interests are reliably "legitimate": an employer's trade secrets and confidential information; its customer relationships and goodwill; and its investment in specialized employee training. A handful of others appear in some jurisdictions and not others—protection against "disintermediation," the risk that a departing employee cuts the employer out and deals directly with its customers (recognized as a legitimate interest in HR Staffing Consultants LLC v. Butts, 627 F. App'x 168, 172 (3d Cir. 2015)), and protection of an employee's genuinely unique or extraordinary skills. What is not a legitimate interest, anywhere, is the bare desire to suppress competition. A covenant that exists only to keep a talented person off the open market is unenforceable by definition, and the modern wave of skepticism is in large part a recognition that far too many non-competes were exactly that.

The reasonableness test that follows from this premise has three dimensions, and an agreement must satisfy all of them. Duration must be reasonable; most courts uphold limits up to two years and grow markedly hostile beyond three. Several states have written presumptions into statute—Utah caps employee non-competes at one year (Utah Code § 34-51-201); Florida treats six months or less as presumptively reasonable and more than two years as presumptively unreasonable (Fla. Stat. § 542.335(1)(d)); Washington presumes anything over eighteen months unreasonable absent clear and convincing evidence (RCW 49.62.020(2)). Geographic scope must track the employer's actual market, though Texas measures scope by the employee's own activities rather than the employer's, and Louisiana demands that the agreement name each restricted parish or municipality (La. Rev. Stat. § 23:921(C)). And the scope of restricted activity must connect to the protectable interest—which is where so many agreements fail. A clause forbidding a former employee from working "in any capacity" for any company in the same industry is the classic overreach, because it bars conduct (say, a sensor engineer taking a sales job at a rival) that threatens no protected interest at all.

E-commerce has scrambled the geographic dimension in interesting ways. Where a business operates worldwide over the internet, a worldwide restriction may be perfectly reasonable; as the Third Circuit observed, "a per se rule against broad geographic restrictions would seem hopelessly antiquated" in a digital economy (Victaulic Co. v. Tieman, 499 F.3d 227, 237 (3d Cir. 2007)). Sophisticated drafters increasingly abandon geography altogether in favor of restrictions defined by the customer set—barring the employee from soliciting specific accounts rather than from setting foot in a territory. That is a theme we return to below, because it is also how the most defensible non-solicitation clauses are now built.

Hovering over all of this is a recurring tension the cases never fully resolve: the same speed that makes information valuable also makes restraints on it harder to justify. In fast-moving technical fields, a customer list or a pricing model can go stale in months, and courts have used that fact to shorten or strike covenants that look reasonable on paper. In EarthWeb, Inc. v. Schlack, 71 F. Supp. 2d 299 (S.D.N.Y. 1999), a one-year restriction in the internet-content business was held too long because the underlying information's competitive value decayed far faster than that. The lesson for an employer like Northwind is uncomfortable but clarifying: the more dynamic your industry, the shorter the restraint a court will tolerate, and the more you should be protecting the information directly rather than fencing off the person who knows it.

The FTC's Ban: Rise, Fall, and Afterlife

The federal government's most aggressive intervention began on July 9, 2021, when President Biden's Executive Order on Promoting Competition encouraged the FTC to curtail "the unfair use of non-compete clauses" (Exec. Order No. 14036, § 5(g)). The administration's case rested on a straightforward and largely accurate premise: non-competes had metastasized far beyond their original justification. What once bound senior executives with genuine access to trade secrets now bound construction laborers, hotel housekeepers, summer-camp counselors, and sandwich-shop employees—people whose access to anything resembling protectable information was nil. The economic literature suggested these covenants suppressed wages, entrenched incumbents, and chilled the job-hopping that drives innovation.

The legal foundation for a ban was Section 5 of the FTC Act, which prohibits "unfair methods of competition" (15 U.S.C. § 45), paired with Section 6(g), which authorizes the Commission to "make rules and regulations for the purpose of carrying out" the Act. Whether those provisions conferred substantive rulemaking authority—the power to issue binding regulations defining, once and for all, what counts as an unfair method of competition—was the question on which everything would turn. The FTC had never successfully asserted such authority in its century of existence.

The Commission issued its proposed rule on January 5, 2023 (88 Fed. Reg. 3482), and after sifting more than 26,000 public comments, finalized the Non-Compete Clause Rule on April 23, 2024, by a party-line 3–2 vote. Codified at 16 C.F.R. Part 910, the rule was breathtaking in scope. It declared it an unfair method of competition to enter into or enforce a non-compete with any worker. It barred all new non-competes after the effective date, including with senior executives. It barred enforcement of existing non-competes with anyone other than "senior executives"—defined narrowly as workers earning more than $151,164 in genuine policy-making positions, fewer than 1% of the workforce. And it required employers to send affirmative notice to bound workers that their agreements would no longer be enforced. Critically, the rule's functional definition reached past traditional non-competes to capture forfeiture-for-competition provisions and any non-solicitation or confidentiality agreement so broad that it "function[ed] to prevent" a worker from taking competitive employment. It carved out only two things: existing senior-executive agreements, and garden leave—reflecting the Commission's view that paying a worker during a restricted period is categorically different from an unpaid post-employment restraint.

The legal challenges landed within hours. Ryan LLC, a Dallas tax-services firm, sued in the Northern District of Texas the day the rule issued, with the U.S. Chamber of Commerce close behind. On August 20, 2024, Judge Ada Brown granted summary judgment for the plaintiffs and set the rule aside with nationwide effect in Ryan, LLC v. FTC. The opinion rested on two independent grounds. First, the court held that Section 6(g) is a "housekeeping" provision empowering the Commission to make procedural rules, not substantive ones binding regulated parties—an interpretation reinforced by the statute's structure and history, and by the major-questions doctrine, which counsels that an agency claiming to decide a question of "vast economic and political significance" must point to clear congressional authorization (West Virginia v. EPA, 597 U.S. 697 (2022)). A nationwide ban voiding tens of millions of contracts was, the court reasoned, exactly such a question, and Section 6(g)'s spare language was not the clear authorization the doctrine demands. Second, even setting authority aside, the court found the rule arbitrary and capricious under the Administrative Procedure Act: it was unreasonably overbroad, swept in agreements posing no competitive harm, rested on inconsistent and inconclusive empirical evidence, and failed to seriously consider less drastic alternatives—such as targeting low-wage or unconscionable non-competes rather than banning the entire category.

The FTC appealed to the Fifth Circuit, and a parallel case proceeded in the Eleventh. Then the 2024 election intervened. The Commission's new leadership had dissented from the rule in the first place on precisely the authority grounds that Ryan vindicated. On September 5, 2025, the FTC voted 3–1 to dismiss its appeals in both Ryan and Properties of the Villages v. FTC and to accede to the rule's vacatur. Chairman Andrew Ferguson, joined by Commissioner Melissa Holyoak, issued a statement declaring the rule's "illegality was patently obvious" and reaffirming that the Commission had lacked the statutory authority to issue a substantive competition rule in the first place. The rule was dead—not stayed, not narrowed, but vacated and abandoned by the agency that wrote it.

So the headline is settled: no federal ban on non-compete agreements exists or is forthcoming. But the regulatory impulse did not evaporate—it changed shape. In the very act of abandoning the rule, the FTC made clear it would continue to police non-competes through case-by-case enforcement against agreements it views as unfair methods of competition, and it has begun doing so. In September 2025 the Commission brought an enforcement action against Gateway Services, a pet-cremation company, alleging that it had imposed non-competes on virtually its entire workforce—including hourly drivers and crematory operators with no access to anything secret—and simultaneously proposed a consent order barring the practice. Non-competes also remain exposed to challenge under the Sherman Act and Section 5 in genuinely anticompetitive uses, and state attorneys general and private plaintiffs are increasingly active.

The shift to case-by-case enforcement deserves a moment's reflection, because it changes the risk calculus in a subtle but important way. A nationwide rule, had it survived, would at least have given employers a single bright line. Its demise returns the field to a regime of uncertainty in which the FTC, state attorneys general, and private litigants each police non-competes through individual actions under antitrust and unfair-competition theories. The Gateway action telegraphs the FTC's target: blanket non-competes imposed on an entire workforce regardless of role or access—precisely the overreach that drove the rulemaking. An employer that uses non-competes selectively, for the handful of employees who genuinely hold competitive information, and scopes them reasonably, faces little realistic exposure. An employer that papers its entire staff with identical broad restraints invites it. The end of the rule did not bless indiscriminate non-compete use; it simply moved the policing from a categorical prohibition to a fact-specific inquiry in which the reasonableness and tailoring of each agreement—and the legitimacy of the interest it protects—become the questions that determine exposure. For Northwind, in other words, the death of the federal rule is less a reprieve than a redirection: the threat now comes from fifty state capitals and a still-watchful FTC rather than from one nationwide regulation.

It is worth noting, too, how rarely a federal antitrust challenge to an ordinary employment non-compete actually succeeds. These covenants are vertical restraints (employer-to-employee), analyzed under the rule of reason, and a plaintiff must show harm to competition in a relevant market—not merely harm to the individual employee. That is a high bar. In Consultants & Designers, Inc. v. Butler Service Group, Inc., 720 F.2d 1553 (11th Cir. 1983), the court found no antitrust violation in a restraint on technical "job shoppers" precisely because the plaintiff could not show market-wide competitive harm. The antitrust theory bites only in unusual settings—where an employee is highly specialized and in short supply, or where a dominant employer uses non-competes to entrench market power, as in the FTC's 2012 action against Renown Health, which had acquired roughly 88% of the cardiologists in Reno and was ordered to release some of them from their covenants. The practical upshot is that the front line of non-compete law is, and will remain, state law.

The State Patchwork: Fifty Regimes, No Map

With federal preemption off the table, non-competes are creatures of state law, and the variation is genuinely extreme—outright bans, income thresholds, industry carve-outs, procedural traps, and divergent rules about whether and how a court will fix an overbroad agreement. An employer with a distributed workforce must navigate all of them simultaneously, and the law is moving fast enough that a compliant agreement can drift into illegality without a word being changed.

Near-total bans. A small but growing group of states voids non-competes almost entirely. California's prohibition is the oldest, broadest, and most aggressively enforced: Business and Professions Code §§ 16600–16607 render post-employment non-competes void except in connection with the sale of a business or dissolution of a partnership or LLC. The California Supreme Court reaffirmed the breadth of this policy in Edwards v. Arthur Andersen LLP, 44 Cal. 4th 937 (2008), rejecting even a "narrow restraint" exception. Recent legislation has sharpened the sword further. Effective January 1, 2024, AB 1076 codified Edwards and required employers to notify current and former employees that their non-competes were void, while SB 699 extended the prohibition to make non-competes unlawful regardless of where or when the contract was signed—so an employee who relocates to California may invoke California's ban against a non-compete signed in Texas, under Texas law, for a Texas employer. That extraterritorial reach is what makes California a national concern for any employer (like Northwind) with remote workers who might move there. North Dakota (N.D.C.C. § 9-08-06) and Oklahoma (Okla. Stat. tit. 15, § 217) have long voided non-competes, though Oklahoma permits narrow customer-non-solicitation restrictions (§§ 219A–219B). Minnesota joined the ban column with a comprehensive prohibition effective July 1, 2023. And the column keeps growing: Wyoming enacted a general non-compete ban effective July 1, 2025, voiding non-competes except in defined circumstances such as a business sale, protection of trade secrets, recovery of relocation and training expenses, and agreements with executives and key personnel.

Income thresholds. A larger group of states permits non-competes only above a wage floor, on the sensible theory that a low-wage worker rarely holds the kind of information that justifies a restraint. The thresholds vary widely, and—a trap many employers miss—most adjust annually for inflation, which means a covenant enforceable when signed can become unenforceable the next year if the employee's pay slips below the newly indexed figure. The representative 2025 figures below should be treated as a live compliance obligation rather than a one-time check:

Categorical prohibitions—and the healthcare wave. Beyond thresholds, states increasingly bar non-competes for entire occupations, with physicians and other healthcare providers the dominant focus out of concern for patient access and continuity of care. The trend is not new—the American Medical Association's ethics guidance discourages physician non-competes, and Murfreesboro Medical Clinic, P.A. v. Udom, 166 S.W.3d 674 (Tenn. 2005), held essentially all physician non-competes void as against public policy—but the pace accelerated sharply through 2025. Several states void physician covenants outright (Delaware, 6 Del. C. § 2707; Massachusetts, M.G.L. c. 112, § 12X; Rhode Island, R.I. Gen. Laws § 5-37-33; New Hampshire, N.H. RSA § 329:31-a; South Dakota, SDCL 53-9-13). Others impose conditions: Texas enforces physician non-competes only if they preserve patient access to records, allow continued treatment of patients with acute illness, and offer a reasonably priced buyout (Tex. Bus. & Com. Code § 15.50(b)); Connecticut caps them at one year or fifteen miles and voids them where the physician is terminated without cause (Conn. Gen. Stat. § 20-14p). And the 2025 cohort was busy: Pennsylvania's Fair Contracting for Health Care Practitioners Act, effective January 1, 2025, voids new healthcare-practitioner non-competes longer than one year and voids them entirely where the practitioner is dismissed; Montana extended its restrictions to reach nurses, advanced-practice nurses, physician assistants, and naturopaths, then by a second 2025 law all licensed physicians; Maryland and Indiana broadened their physician bans effective July 1, 2025; and Texas and Tennessee tightened their existing regimes. Technology workers receive targeted protection in Hawaii, which bars software and IT firms from imposing non-competes (Haw. Rev. Stat. § 480-4(d)). Many states categorically exempt hourly workers, tipped employees, interns, students, and broadcast employees. The 2026 legislative pipeline remains full.

Procedural traps. Even where a non-compete is substantively enforceable, procedural missteps can void it—which is exactly what undid one of Northwind's agreements. A growing number of states require advance notice of non-compete terms: Colorado and New Hampshire before acceptance; Maine before the offer is even extended; Illinois and the District of Columbia fourteen days in advance; Massachusetts at the earlier of the formal offer or ten business days before the start date; Washington before or at the time of hire. Present the agreement on the first day of work in any of these states, as Northwind did, and it may be void no matter how reasonable its substance. States also disagree sharply about consideration for agreements signed after employment begins. Illinois, following Fifield v. Premier Dealer Services, Inc., 993 N.E.2d 938 (Ill. App. 2013), and the Freedom to Work Act, treats two years of continued at-will employment as the floor for adequate consideration unless the employer provides something independent (820 ILCS 90/5). Kentucky (Charles T. Creech, Inc. v. Brown, 433 S.W.3d 345 (Ky. 2014)) and Pennsylvania (Socko v. Mid-Atlantic Systems of CPA, Inc., 126 A.3d 1266 (Pa. 2015)) hold that continued at-will employment alone is not enough. Wisconsin holds it is enough regardless of timing (Runzheimer International, Ltd. v. Friedlen, 862 N.W.2d 879 (Wis. 2015)). And Texas requires consideration "connected to" the interest being protected—typically a promise to provide confidential information or specialized training—a requirement satisfied by an implied promise to supply confidential information under Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844 (Tex. 2009). Several states also cap duration outright, and Massachusetts and Washington bar enforcement against employees terminated without cause or laid off—a point we return to below.

The picture, then, is not a map but a mosaic, and the tiles keep shifting. The single most important operational consequence is that one-size-fits-all restrictive-covenant programs are obsolete. An agreement perfectly enforceable in Florida may be void in California, unenforceable without garden-leave pay in Massachusetts, missing required consideration in Illinois, and procedurally defective in Colorado. We treat the cross-jurisdictional drafting problem in depth in our guides to employee invention assignment agreements and drafting enforceable non-disclosure agreements for technology transactions; the same discipline applies here.

Judicial Trends: Heightened Scrutiny and the Blue-Pencil Problem

Even in employer-friendly jurisdictions, courts increasingly refuse to enforce non-competes they find overbroad—and they are quicker than ever to find overbreadth. In December 2024 the Delaware Supreme Court in Sunder Energy, LLC v. Jackson declined to enforce a non-compete against a minority, non-voting member of a business, citing inadequate consideration and unreasonable scope; the case is notable precisely because Delaware is generally hospitable to restrictive covenants. The Northern District of Illinois in Medix Staffing Solutions, Inc. v. Dumrauf, 2018 WL 1859039 (N.D. Ill. Apr. 17, 2018), struck a covenant barring employment "in any capacity" at a same-industry company as untethered to any protectable interest—the precise defect that pervaded Northwind's legacy form. The throughline is unmistakable: non-competes must be narrowly tailored to identified legitimate interests, not deployed as generalized prohibitions, and the era in which a court would quietly enforce a sloppy boilerplate restraint is ending.

That lesson is sharpened by the blue-pencil problem—the question of how much a court will rewrite an overbroad agreement to save it. The answer varies enormously, and the variation is consequential enough to be outcome-determinative. At one pole sit the reformation states, where courts may (or must) modify an overbroad restraint to make it reasonable. Florida's statute requires reformation (Fla. Stat. § 542.335(1)(c)); Nevada mandates it where statutory conditions are met (NRS § 613.195(5)); Texas requires courts to reform unreasonable duration or scope, but bars the employer from recovering damages for any breach occurring before reformation (Tex. Bus. & Com. Code § 15.51(c))—a meaningful penalty for overdrafting. In the middle sit strict blue-pencil states, which permit a court only to strike offending words, not to add or rewrite them. The Indiana Supreme Court drew this line cleanly in Heraeus Medical, LLC v. Zimmer, Inc., 135 N.E.3d 150 (Ind. 2019), holding that blue-penciling permits deletion alone—even where the agreement's own reformation clause purports to authorize more. Illinois cautions courts against "wholly rewriting contracts" while granting discretion based on the fairness of the original restraints and the employer's good faith (820 ILCS 90/35). And at the far pole sit states that simply refuse to modify employment non-competes at all: in Nebraska (Gaver v. Schneider's O.K. Tire Co., 856 N.W.2d 121 (Neb. 2014)), South Carolina (Poynter Investments v. Century Builders of Piedmont, 694 S.E.2d 15 (S.C. 2010)), and Wisconsin (Wis. Stat. § 103.465), an overbroad covenant is simply void, full stop—no second chances.

Consider a clarifying hypothetical. Suppose Northwind drafts a two-year, nationwide non-compete forbidding a mid-level engineer from working "in any role" for any sensor company. In Florida, a court would likely reform it—perhaps to one year, a defined region, and the engineering function—and enforce the trimmed version. In Indiana, a court could strike the words "in any role" if they were severable, but could not add a tailored substitute. In Wisconsin, the whole covenant would fall, and Northwind would walk away with nothing. Same agreement, same facts, three completely different outcomes. The practical lesson writes itself: draft reasonably from the outset, because relying on judicial reformation as a safety net is, increasingly, a bet against the house.

A further variable that courts weigh—sometimes dispositively—is how the employment ended. Massachusetts and Washington render non-competes unenforceable against employees terminated without cause or laid off (M.G.L. c. 149, § 24L(c); RCW 49.62.020). Illinois bars enforcement against employees laid off due to circumstances like the COVID-19 pandemic unless the employer pays base compensation during the restricted period (820 ILCS 90/10). Even without a statute, courts treat involuntary termination as bearing on enforceability: New York courts have held restrictive covenants enforceable only where the employer shows continued willingness to employ the covenanting party, and Pennsylvania (Shepherd v. Pittsburgh Glass Works, LLC, 25 A.3d 1233 (Pa. Super. 2011)) and Mississippi courts have treated the circumstances of termination as part of the reasonableness calculus. The intuition is one of basic fairness: an employer that fires a worker and then asks a court to bar her from working elsewhere is asking the court to enforce a restraint while simultaneously cutting off the livelihood it restrains. Provisions that purport to apply "regardless of the reason for termination" face mounting skepticism, and a well-drafted modern covenant often expressly excludes layoffs and without-cause terminations from its reach.

The Defend Trade Secrets Act: Protection Without a Restraint

Here is the most liberating insight in this entire area of law, and the one Northwind's general counsel most needed: the interests a non-compete protects can usually be protected by other means. The most powerful of those means is the Defend Trade Secrets Act of 2016 (DTSA), which amended the Economic Espionage Act (18 U.S.C. §§ 1831–1839) to create a federal civil cause of action for trade-secret misappropriation that depends on no non-compete whatsoever. Where a non-compete protects information indirectly—by fencing off the person who knows it—a trade-secret claim protects the information directly, and it travels with that information wherever the employee goes, including to California.

The DTSA defines a "trade secret" expansively to reach all forms of "financial, business, scientific, technical, economic, or engineering information"—formulas, designs, prototypes, methods, processes, programs, and code—provided two conditions are met: the owner took "reasonable measures" to keep the information secret, and the information "derives independent economic value, actual or potential, from not being generally known" and "not being readily ascertainable" by others (18 U.S.C. § 1839(3)). Misappropriation means acquiring a trade secret by "improper means" (theft, bribery, misrepresentation, breach of a duty to maintain secrecy), or disclosing or using one acquired that way (§ 1839(5)–(6)). Crucially, reverse engineering and independent derivation are not improper means—a competitor is free to figure out Northwind's design honestly. The remedies are robust: injunctive relief; actual loss plus unjust enrichment, or a reasonable royalty; exemplary damages up to double for willful and malicious misappropriation; and attorneys' fees in appropriate cases (§ 1836(b)(3)). The statute of limitations runs three years from discovery (§ 1836(d)). And because the DTSA is federal, it opens the federal courthouse regardless of the amount in controversy—a meaningful advantage in New York, the lone state that has never adopted a version of the Uniform Trade Secrets Act and whose common law affords no attorneys' fees.

Two features of the DTSA deserve special emphasis, because each can quietly determine whether a claim succeeds.

The first is the reasonable-measures requirement, which is often the most fiercely contested element in trade-secret litigation. Courts evaluate the totality of an owner's security—physical access controls, technical safeguards like encryption and access logging, need-to-know policies, confidentiality training, exit procedures, and document marking—against a standard of proportionality rather than perfection. The measures must fit the sensitivity of the information; there is no fixed checklist. What the cases punish is carelessness. In Yellowfin Yachts, Inc. v. Barker Boatworks, LLC, 898 F.3d 1279 (11th Cir. 2018), an employer lost trade-secret protection over its customer information because it had encouraged the departing employee to keep that information on his personal phone and laptop, never marked it confidential, and let him refuse to sign a confidentiality agreement. In Farmers' Edge Inc. v. Farmobile, LLC, 970 F.3d 1027 (8th Cir. 2020), protection evaporated where the owner had shared the information with a third-party contractor under no confidentiality agreement at all. And in DM Trans, LLC v. Scott, 38 F.4th 608 (7th Cir. 2022), an employer was denied injunctive relief in part because it neither asked nor ensured that departing employees deleted protected data from their personal devices. The remote-work era has made this element harder to satisfy, which is precisely why it rewards a deliberate program—a subject we develop at length in building a trade secret protection program from scratch and protection of trade secrets.

A confidentiality provision in an employment agreement can itself help demonstrate reasonable efforts—and recent appellate authority has been encouraging for employers on exactly this point, holding that a well-drafted confidentiality clause can suffice to plead reasonable efforts at least at the motion-to-dismiss stage. But surviving the pleadings is not the same as prevailing. The contractual paper and the operational program must work together: the clause signals intent, while the day-to-day security—encryption, access logs, marking, training, exit procedures—carries the evidentiary burden at summary judgment and trial. Neither stands alone.

The second feature is a compliance trap that an astonishing number of employers overlook. The DTSA grants immunity to any employee, contractor, or consultant who discloses a trade secret in confidence to a government official or an attorney solely to report or investigate a suspected violation of law, or who files it under seal in litigation (18 U.S.C. § 1833(b)(1)–(2)). And the statute requires the employer to give notice of that immunity in "any contract or agreement with an employee that governs the use of a trade secret or other confidential information," entered into or amended after May 11, 2016 (§ 1833(b)(3)). The notice may appear in the agreement itself or by cross-reference to a policy document. Here is the trap: if an employer omits the notice, it does not forfeit the underlying trade-secret protection—but it does forfeit the right to recover exemplary damages or attorneys' fees in a DTSA action against any individual who never received it (Xoran Holdings LLC v. Luick, 2017 WL 4039178 (E.D. Mich. Sept. 13, 2017)). "Employee" is defined broadly to include independent contractors and consultants, who generally cannot be covered by cross-reference to an internal policy and must receive the notice in their own agreements. Every confidentiality, NDA, employment, consulting, equity, and separation agreement entered into or amended since May 2016 should contain this notice. It is a single paragraph with outsized consequences—and it is exactly the sort of detail a fifteen-year-old non-compete form, like Northwind's, will be missing.

A related but limited backstop is the inevitable disclosure doctrine, under which some courts will enjoin a departing employee from a competitive role if that role would inevitably require disclosure of the former employer's trade secrets—even absent proof of actual taking. Its availability is jurisdiction-dependent and contested. Illinois recognizes it (Strata Marketing, Inc. v. Murphy, 740 N.E.2d 1166 (Ill. App. 2000)); California rejects it outright as incompatible with its policy against non-competes (Whyte v. Schlage Lock Co., 101 Cal. App. 4th 1443 (2002)); New York applies it only rarely and disfavors it (Marietta Corp. v. Fairhurst, 754 N.Y.S.2d 62 (3d Dep't 2003)); and Texas has not adopted it (Cardoni v. Prosperity Bank, 805 F.3d 573 (5th Cir. 2015)). Even where recognized, the DTSA itself constrains the doctrine: a federal injunction may not be based "merely on the information the person knows" but must rest on evidence of threatened misappropriation (18 U.S.C. § 1836(b)(3)(A)). Inevitable disclosure is best understood as a supplementary argument in the right jurisdiction—never the foundation of a protection program.

The Post-Ban Toolkit: Alternatives to the Non-Compete

As traditional non-competes face mounting restrictions, employers are turning to a suite of alternatives that achieve much of the same protection with fewer legal vulnerabilities. The best programs do not pick one—they layer several, matched to the role and location of each employee.

Garden leave has emerged as perhaps the most promising alternative, and it is the one piece of the old order the FTC's vacated rule expressly blessed. Under a garden-leave arrangement, an employee who resigns (or is terminated) gives advance notice—typically thirty to ninety days—during which the employee remains employed and fully paid but is relieved of duties, excluded from the workplace and company systems, and barred from contacting customers and colleagues. The legal elegance lies in the continuing employment relationship: because the employee is still on the payroll, she remains bound by the duty of loyalty and cannot lawfully work for a competitor, while her confidential knowledge grows stale and her customer relationships are quietly reassigned. Courts treat garden leave far more favorably than a conventional non-compete precisely because the employee is paid and the period is short. In Aitken v. USI Insurance Services, LLC, 2021 WL 755475 (D. Or. Feb. 26, 2021), a court granted a TRO enforcing a sixty-day paid garden leave, calling the burden on the broker "minimal" given the short duration and full pay. Massachusetts effectively requires garden leave (or other agreed consideration) to support an enforceable non-compete—pegging the floor at 50% of the employee's highest base salary over the preceding two years (M.G.L. c. 149, § 24L(b)(vii))—and Illinois excludes true garden leave from its non-compete prohibition (820 ILCS 90/5). Two cautions: garden leave's enforceability rests on the employee staying employed, so courts will generally not specifically enforce it by forcing someone to keep working (Bear, Stearns & Co. v. Sharon, 550 F. Supp. 2d 174 (D. Mass. 2008)), and a "paid non-compete" that takes effect after employment ends is not true garden leave at all—it faces the same scrutiny as any other non-compete because the duty of loyalty has already terminated. The cost is real, but that cost is a built-in discipline: paying full salary for no work is expensive enough that rational employers reserve garden leave for the few people who truly warrant it.

Forfeiture-for-competition clauses have drawn intense attention after a pair of recent Delaware decisions, and they may be the most important development in restrictive-covenant law since the FTC rule fell. Unlike a non-compete, which prohibits competition, a forfeiture provision lets the employee compete if she chooses but conditions retention of certain benefits—stock options, deferred compensation, unvested equity—on not competing during a defined period. The underlying "employee choice doctrine" treats agreements that merely condition benefits very differently from agreements that bar employment: the former are seen as ordinary contract terms rather than restraints on trade. In LKQ Corporation v. Rutledge, No. 110, 2024 (Del. Dec. 18, 2024), the Delaware Supreme Court held that forfeiture-for-competition provisions in employee equity-award agreements are enforceable without the reasonableness review applied to non-competes, extending the employee-choice doctrine beyond the partnership context to ordinary "key employees" with restricted stock units. The court reasoned that such provisions "do not restrict competition or an employee's ability to work," are not enforceable by injunction, and "do not deprive the public of the employee's services"—they simply make the employee choose between the benefit and the competition. The Seventh Circuit, applying Delaware law, reached a parallel conclusion. The strategic appeal is obvious: a properly structured forfeiture clause governed by Delaware law gives the employer real deterrence without asking a court to enforce a disfavored restraint. The catch is that viability depends heavily on the governing state's law—California and some other ban states may treat a forfeiture clause as the functional equivalent of a prohibited non-compete, refusing to let employers achieve indirectly what they cannot do directly.

Enhanced non-solicitation agreements generally fare better than non-competes because they restrict only specific conduct—soliciting particular customers, or recruiting particular colleagues—rather than barring competitive employment outright. Courts enforce non-solicits more readily than pure non-competes. But "more readily" is not "automatically." To survive, a customer non-solicitation clause should be limited to customers the employee actually serviced or had material contact with during a defined look-back period (typically one to two years), and an employee non-solicitation clause should target active recruitment rather than all contact. The vulnerabilities are real: California refuses to enforce customer non-solicitation agreements on the same public-policy grounds that void non-competes, and the FTC's vacated rule had warned that a non-solicit so broad that it "function[s] to prevent" competitive employment could itself be treated as a prohibited non-compete. Drafting precision is everything.

Confidentiality agreements are the most universally enforceable restrictive covenant, accepted in virtually every jurisdiction, California included. The key is specificity: an effective NDA identifies the categories of protected information—trade secrets, customer lists, pricing strategies, technical specifications, proprietary code—rather than relying on a catch-all, and spells out obligations both during and after employment, including the return of materials. There is one hard limit, and it is the same limit that governs every tool in this section: an NDA cannot function as a backdoor non-compete. One drafted so broadly that it effectively bars an employee from using her general skills and industry knowledge risks being struck down on the very grounds that void overbroad non-competes. We treat the craft of these agreements in detail in drafting enforceable non-disclosure agreements for technology transactions.

Finally, invention-assignment provisions ensure that intellectual property developed during employment belongs to the employer—subject to the statutes in California, Delaware, Illinois, Minnesota, North Carolina, Washington, and others that protect inventions an employee develops entirely on her own time without company resources. These provisions are a quiet but essential complement to a confidentiality program, and we cover them fully in employee invention assignment agreements.

Putting It Together: Northwind's Redesign

It helps to see how these tools combine, because the answer to Northwind's problem is not a single replacement for the broken non-compete—it is a layered program calibrated to where its people actually work and what they actually know. Walk through the redesign.

For Northwind's most senior engineers and product leaders—the handful with genuine access to sensor designs and strategic roadmaps—Northwind adopts garden leave, building a notice period into their employment terms so that a resignation triggers a paid restricted period during which the departing leader stays on the payroll, off the competitive field, while sensitive designs age and customer relationships transition to successors. Because garden leave keeps the employee employed, it works even in California, where a conventional non-compete would be void. And because paying full salary for no work is expensive, the cost itself disciplines Northwind into reserving the tool for the few who warrant it.

For employees who receive equity, Northwind layers in a forfeiture-for-competition provision tied to unvested options and deferred compensation, governed by Delaware law where that choice is honored—conditioning the benefits on not competing while leaving the employee free to walk away from the benefits and compete if she prefers. Under LKQ v. Rutledge, a properly structured clause of this kind stands a strong chance of enforcement without the reasonableness gauntlet a non-compete must run.

For the broader engineering team, Northwind relies on carefully scoped non-solicitation and confidentiality agreements: customer non-solicitation limited to accounts the employee actually serviced within a defined look-back; employee non-solicitation aimed at active recruitment; and confidentiality terms that name the specific categories of protected sensor data rather than sweeping broadly enough to bar the employee from using general engineering skills. Every one of these agreements now carries the DTSA whistleblower-immunity notice that the legacy form lacked—preserving Northwind's right to exemplary damages and fees.

Underneath all of it, Northwind builds the operational trade-secret program that does not depend on any agreement being enforceable. It classifies its sensor designs; restricts access to a need-to-know group with logged, role-based permissions; encrypts and marks the sensitive files; trains engineers on their confidentiality obligations at onboarding and periodically thereafter; deploys mobile-device management on company hardware; and runs structured exit interviews with forensic device imaging. This is the layer that makes the DTSA claim viable—because, as Yellowfin and Farmers' Edge teach, the reasonable-measures element is won or lost in exactly these operational details.

The result is a program that protects Northwind's actual interests—its designs and its customer relationships—through a portfolio of mechanisms matched to each employee's role and location, rather than through a single broadly drafted non-compete that the new landscape has rendered both legally fragile and, in California, entirely void. When the next key engineer resigns, Northwind's protection will not rise or fall on whether one restraint happens to be enforceable where she lives. It will rest on the layered combination of paid restraint where appropriate, conditional benefits where she holds equity, narrowly tailored covenants, a trade-secret claim that travels with the information, and the security program that made that claim viable in the first place.

Responding to a Key Departure: The First 48 Hours

A protection program is only as good as the response when it is tested, and in restrictive-covenant disputes, speed is the dominant imperative. Quick action does three things at once: it demonstrates the legitimacy of the employer's interest, minimizes ongoing damage, and—most concretely—preserves evidence before it is lost or altered. Delay does the opposite: it undercuts the "irreparable harm" showing that injunctive relief requires, and it can trigger a laches defense that bars equitable relief entirely.

The single most important technical step is to forensically image the departing employee's devices before anyone turns them on. This is not paranoia; it is preservation. Powering up a computer and opening files alters metadata, flushes temporary storage, and can overwrite the very artifacts—creation dates, file-transfer logs, deleted-file remnants—that prove misappropriation. Untrained handling has sunk cases. So the protocol is: disable the employee's system and building access (after confirming that disabling will not delete or alter data), engage a forensic vendor to image the hard drive and any phones, tablets, or removable media, review building-access logs and printer-spool records for late-night activity or bulk printing, and issue a written litigation-hold notice the moment litigation is reasonably anticipated. A demand letter threatening suit can itself trigger the duty to preserve (Sonrai Systems, LLC v. Romano, 2021 WL 1418405 (N.D. Ill. 2021)), so both sides must get their holds in place early. We address the broader discovery mechanics in [a practical discovery refresher](/documents/a_practical_discovery_refresher---mastering_the_tools_rules_ and_pitfalls_of_federal_civil_litigation).

With evidence secured, the employer faces a strategic fork. A cease-and-desist letter to the former employee can resolve the matter without litigation, flush out useful facts about the new role, and build a record of the employer's reasonableness for any future court. But the letter is double-edged. Send a copy to the new employer, and you put it on notice—strengthening a later tortious-interference claim if it keeps the employee—but you also risk a defamation or tortious-interference claim against you if the letter proves inaccurate or gets the employee fired (Silguero v. Creteguard, Inc., 187 Cal. App. 4th 60 (2010)). Worse, a telegraphed threat can prompt the employee to win the "race to the courthouse" by filing a declaratory-judgment action in a friendlier forum—California courts, for instance, are famously reluctant to enforce non-competes even under another state's law. In genuinely urgent cases, the right move may be to skip the letter and file immediately, seeking a TRO.

If litigation becomes necessary, the employer typically pleads some combination of breach of contract, breach of the duty of loyalty, tortious interference (against the new employer, if it knew of the agreement), and trade-secret misappropriation under the DTSA and state law. To obtain a preliminary injunction, the employer must satisfy the familiar four-part test: likelihood of success on the merits, irreparable harm not remediable by money damages, a favorable balance of the equities, and consistency with the public interest (ADP, LLC v. Rafferty, 923 F.3d 113 (3d Cir. 2019)). Florida lightens the load by presuming irreparable injury from breach of an enforceable restrictive covenant (Fla. Stat. § 542.335(1)(j)); most states require the employer to prove it with admissible evidence, usually affidavits from customers or coworkers with first-hand knowledge. The DTSA also offers an extraordinary ex parte civil seizure remedy for cases where even a TRO would be inadequate (18 U.S.C. § 1836(b)(2))—a powerful but rarely granted tool reserved for genuine flight-and-destruction risk. Whether to litigate at all is itself a strategic judgment, weighing the strength of the evidence, the value of the information, the enforceability of the covenants under the governing state's law, and the cost and distraction of proceedings. The recurring theme is that the strongest litigation position belongs to the employer whose protection rested on a documented trade-secret program rather than on a restraint that may not hold.

The Remote-Work Complication

No development has scrambled non-compete enforcement more than the normalization of remote work, and it sits at the very heart of Northwind's original problem. When an employee hired in one state works remotely from another, which state's law governs the non-compete? If a New York employee relocates to California, does California's prohibition—which now applies regardless of where the contract was signed—void the agreement overnight? These are not law-school hypotheticals; they are the daily reality of any employer with a distributed workforce, and the honest answer is that they are genuinely uncertain.

The general thrust of the law is that the state where the employee actually lives and works has a strong claim to apply its own policy, and the states most protective of employee mobility have written their statutes to reach agreements signed elsewhere precisely so that an employer cannot evade them through clever drafting. California's extraterritorial provisions (SB 699) are the leading example, and California reinforces them from another direction: Labor Code § 925 prohibits employment contracts from requiring a California employee to litigate outside California or under another state's law. Massachusetts similarly bars choice-of-law provisions that would circumvent its non-compete statute and channels disputes to Suffolk County. The lesson is that choice-of-law and forum-selection clauses are not the escape hatch employers wish they were. They help at the margins, but a court applying the law of the employee's home state will frequently disregard a clause selecting a more employer-friendly jurisdiction, especially where that state's policy is strong and the contacts are thin.

The implications for program design are significant. An employer must track not merely where an employee was hired but where that employee currently works, and must recognize that a relocation can flip the enforceability of an existing agreement without anyone signing anything. A non-compete valid when a Texas employee signed it in Texas may become void the day she begins working remotely from California. This is why a sophisticated program ties its enforceability analysis to current work location, revisits agreements when employees move, and—above all—does not stake critical information on any single restraint. The one tool that travels with the employee regardless of where she relocates is the trade-secret claim, backed by the operational program that makes it viable. For Northwind, whose departing product head worked remotely from California, the lesson is foundational: in a distributed workforce, the employee's location is a variable the protection program must be built to absorb, not a fixed assumption it can rely on. The deeper treatment of how remote and cloud-based work reshapes information security lives in our companion piece on trade secrets in the age of remote work and cloud computing.

What Comes Next: AI and the Legislative Pipeline

Two forces will shape this area over the next several years.

The first is artificial intelligence in the workplace, which raises trade-secret questions the existing doctrine never anticipated. Can an employee use a generative AI system to extract, synthesize, or exfiltrate protected information in ways traditional access controls cannot detect? If an employee feeds proprietary data into a third-party large language model as part of her work, does that data lose its trade-secret status—because it has arguably been disclosed without reasonable measures to preserve secrecy? Do AI-generated outputs derived from proprietary inputs constitute trade secrets in their own right, and who owns them? These questions sit at the intersection of employment law, intellectual property, and emerging technology, and the answers are still forming. For adjacent analysis, see our work on AI-generated inventions and copyright infringement claims against generative AI. The practical near-term advice is concrete: govern AI tool usage by policy, restrict the ingestion of trade secrets into systems the employer does not control, and treat AI exfiltration as a first-class threat in the monitoring layer of any trade-secret program.

The second is continued state legislative activity, which shows no sign of slowing. Bills remain pending in numerous states for the 2026 sessions; several recent measures were stopped only by gubernatorial vetoes; and the healthcare and wage-threshold trends continue to expand the categories of workers who cannot be bound at all. At the federal level, the Workforce Mobility Act—which would bar non-competes except in connection with a business sale, but through legislation rather than agency rulemaking—has attracted cross-party interest, even as its prospects remain uncertain. The collapse of the FTC rule did not relieve the pressure on non-competes. It merely confirmed that the pressure will come from legislatures and courts, one jurisdiction at a time.

Frequently Asked Questions

Is the FTC non-compete ban still in effect? No. The Non-Compete Clause Rule never took effect. A federal court set it aside nationwide in Ryan, LLC v. FTC on August 20, 2024, and the FTC formally abandoned it on September 5, 2025, dismissing its appeals and acceding to vacatur. There is no federal ban, and none is imminent. The FTC has, however, signaled that it will challenge particular non-competes it views as anticompetitive through case-by-case enforcement, as it did against Gateway Services in September 2025.

Does that mean my non-competes are safe? Not necessarily—and this is the central point of confusion. The death of the federal rule simply returns the question to state law, which is in many states more hostile to non-competes than the FTC rule would have been. Whether a given non-compete is enforceable depends on the law of the state where the employee works, the reasonableness of the agreement's duration, geography, and scope, the adequacy of consideration, compliance with any notice requirements, and whether the employee was terminated involuntarily.

Which states ban non-competes outright? California, North Dakota, Oklahoma, and Minnesota impose near-total bans, and Wyoming added a general ban effective July 1, 2025. California's is the most aggressive, voiding non-competes regardless of where or when they were signed and barring out-of-state forum and choice-of-law clauses for California employees. Many additional states bar non-competes below an income threshold or for specific occupations—most prominently physicians and healthcare providers.

An employee signed a non-compete in Texas but now works remotely from California. Is it enforceable? Very likely not. California's recent legislation (SB 699) makes non-competes void as to California employees regardless of where or when signed, and California courts are reluctant to enforce out-of-state non-competes even under another state's law. The employee's current work location frequently controls, which is why employers must track relocations as a live compliance event.

What is "garden leave" and why is it more enforceable? Garden leave keeps a departing employee on the payroll, fully paid but relieved of duties, for a notice period (often 30–90 days) during which she cannot work for a competitor. Because the employment relationship continues, the employee remains bound by the duty of loyalty, and courts treat the arrangement far more favorably than an unpaid post-employment restraint. The FTC's vacated rule expressly exempted garden leave, and Massachusetts effectively requires it (at 50% of base salary) to support an enforceable non-compete.

Is a forfeiture-for-competition clause the same as a non-compete? No, and the distinction matters enormously. A non-compete prohibits competition; a forfeiture clause lets the employee compete but conditions retention of benefits—equity, deferred compensation—on not competing. Under the "employee choice doctrine," many courts (notably the Delaware Supreme Court in LKQ v. Rutledge (2024)) enforce these clauses without the reasonableness review applied to non-competes. But ban states like California may treat a forfeiture clause as a disguised non-compete.

Can I protect trade secrets without any non-compete at all? Yes—and increasingly you must. The Defend Trade Secrets Act gives employers a federal cause of action for misappropriation that depends on no restrictive covenant, with remedies including injunctions, damages, exemplary damages, and attorneys' fees. The catch is the "reasonable measures" requirement: the protection exists only if you actually safeguard the information through access controls, encryption, marking, training, and exit procedures. Build the program first; the claim follows.

What is the DTSA whistleblower notice, and do I really need it? Yes. The DTSA requires employers to include a notice of the statute's whistleblower-immunity provisions in any agreement governing the use of trade secrets or confidential information entered into or amended after May 11, 2016. Omitting it does not forfeit your trade-secret protection, but it does forfeit your right to recover exemplary damages or attorneys' fees against any employee or contractor who never received it. Add it to every confidentiality, NDA, employment, consulting, equity, and separation agreement.

Conclusion: The Siege and the Citadel

The era of the routine, broadly drafted, first-day-of-work non-compete is ending, and it is not coming back. The FTC's ban failed in court and was formally abandoned in September 2025, but the political, judicial, and legislative forces arrayed against non-competes are not receding. State legislatures keep tightening restrictions; courts keep scrutinizing enforcement and refusing to rescue overbroad drafting; and workers, better informed of their rights, are increasingly willing to challenge agreements they view as overreaching.

For employers, this calls for redesign, not retreat. The information and relationships non-competes were built to protect—trade secrets, customer goodwill, team cohesion, the return on years of training—remain as valuable as ever. What has changed is that the tools for protecting them have multiplied and matured. Garden leave, forfeiture-for-competition clauses, narrowly tailored non-solicitation agreements, specific and enforceable confidentiality obligations, the Defend Trade Secrets Act, and disciplined operational trade-secret hygiene can collectively accomplish what a single broadly drafted non-compete once attempted—often more effectively, and with far greater legal durability.

The employers who navigate this landscape best will be those who, like a redrawn Northwind, invest in understanding the requirements of every jurisdiction where their people work, tailor their agreements accordingly, build a trade-secret program that does not depend on post-employment enforcement, and respond to departures with speed and discipline. The non-compete is under siege. But the citadel it was meant to defend—the company's hard-won information and relationships—can still be held. The defenders simply have to stop relying on a single wall and start building in depth.

For guidance on developing a restrictive-covenant and trade-secret strategy tailored to your organization's jurisdictional footprint and competitive risks, contact our employment or intellectual property and technology practice.

Related Articles

• Building a Trade Secret Protection Program From Scratch
• Protection of Trade Secrets
• Trade Secrets in the Age of Remote Work and Cloud Computing
• Employee Invention Assignment Agreements: Drafting for Enforceability Across Jurisdictions
• Drafting Enforceable Non-Disclosure Agreements for Technology Transactions
• Cybersecurity Incident Response and IP Protection: Preventing Trade Secret Loss During Data Breaches
• Legal Protection of Software: Copyrights, Patents, Trade Secrets, and Contracts

Selected Authorities

Statutes & regulations: 15 U.S.C. § 45 (FTC Act § 5); 15 U.S.C. § 1 (Sherman Act § 1); 18 U.S.C. §§ 1831–1839 (DTSA/EEA), §§ 1833(b), 1836(b)(2)–(3), 1839(3), (5)–(6); FTC Non-Compete Clause Rule, 16 C.F.R. Part 910 (vacated); Cal. Bus. & Prof. Code §§ 16600–16607; Cal. Lab. Code §§ 925, AB 1076, SB 699; N.D.C.C. § 9-08-06; Okla. Stat. tit. 15, §§ 217, 219A–219B; M.G.L. c. 149, § 24L; M.G.L. c. 112, § 12X; Fla. Stat. § 542.335; Tex. Bus. & Com. Code §§ 15.50–15.51; 820 ILCS 90 (Illinois Freedom to Work Act); RCW 49.62; Utah Code § 34-51-201; Haw. Rev. Stat. § 480-4(d); Conn. Gen. Stat. § 20-14p; Wis. Stat. § 103.465; NRS § 613.195; Pennsylvania Fair Contracting for Health Care Practitioners Act (eff. Jan. 1, 2025); Wyoming non-compete ban (eff. July 1, 2025).

Cases: Ryan, LLC v. FTC (N.D. Tex. Aug. 20, 2024) (setting aside the rule); FTC accession to vacatur and dismissal of appeals (Sept. 5, 2025); West Virginia v. EPA, 597 U.S. 697 (2022); LKQ Corp. v. Rutledge, No. 110, 2024 (Del. Dec. 18, 2024); Sunder Energy, LLC v. Jackson (Del. 2024); Heraeus Medical, LLC v. Zimmer, Inc., 135 N.E.3d 150 (Ind. 2019); Medix Staffing Solutions, Inc. v. Dumrauf, 2018 WL 1859039 (N.D. Ill. 2018); Fifield v. Premier Dealer Services, Inc., 993 N.E.2d 938 (Ill. App. 2013); Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844 (Tex. 2009); Edwards v. Arthur Andersen LLP, 44 Cal. 4th 937 (2008); Whyte v. Schlage Lock Co., 101 Cal. App. 4th 1443 (2002); Yellowfin Yachts, Inc. v. Barker Boatworks, LLC, 898 F.3d 1279 (11th Cir. 2018); Farmers' Edge Inc. v. Farmobile, LLC, 970 F.3d 1027 (8th Cir. 2020); DM Trans, LLC v. Scott, 38 F.4th 608 (7th Cir. 2022); Aitken v. USI Ins. Servs., LLC, 2021 WL 755475 (D. Or. 2021); ADP, LLC v. Rafferty, 923 F.3d 113 (3d Cir. 2019); Murfreesboro Medical Clinic, P.A. v. Udom, 166 S.W.3d 674 (Tenn. 2005); EarthWeb, Inc. v. Schlack, 71 F. Supp. 2d 299 (S.D.N.Y. 1999).

This article is for general informational purposes only and does not constitute legal advice, nor does it create an attorney-client relationship. Non-compete and trade-secret law vary by jurisdiction and are changing rapidly—several of the state measures described took effect in 2025 and others are pending for 2026—so consult qualified employment counsel about the application of these rules to your specific circumstances.