With no federal ban in place, enforceability of noncompete agreements now depends entirely on state law. Washington enacted a near-total ban effective June 30, 2027, while Tennessee established a $70,000 income threshold for enforceability beginning July 1, 2026. Five states—California, Minnesota, North Dakota, Oklahoma, and Montana—void virtually all employee noncompetes. Illinois and Maryland limit enforcement based on compensation thresholds ($75,000 and $15 per hour, respectively). The patchwork of state standards continues to expand, with no indication of federal intervention to create uniform rules.
Employers must immediately audit and revise compliance strategies and contract templates to account for inconsistent state requirements. The FTC has signaled continued scrutiny of noncompetes in staffing and healthcare sectors through individual enforcement actions, meaning legal risk persists despite the failed ban. For in-house counsel and employment lawyers, the practical challenge is now managing a fragmented regulatory landscape where a single noncompete agreement may be enforceable in one state and void in another. Monitoring state legislative activity remains essential as the trend toward restricting noncompetes accelerates.