Non-competes (contractual provisions that restrict employees from working for competitors after leaving a job) are facing increased criticism from courts and regulators in the United States. This heightened scrutiny intensified in 2024 when the Federal Trade Commission (FTC) proposed a rule that would have banned non-competes in the U.S. Although the ban was vacated, many states accelerated efforts to restrict or eliminate non-compete clauses, signaling a shift toward employee mobility and competitive labor markets.

FTC Nationwide Ban Vacated, Enforcement Persists

The FTC’s proposed nationwide ban on non-competes was vacated through an August 2024 ruling by U.S. District Court for the Northern District of Texas. On September 5, 2025, the FTC formally abandoned its appeal, ending its effort to impose a blanket nationwide prohibition. However, the agency has not walked away from the issue. Through its newly formed Joint Labor Task Force, the agency continues targeted enforcement against overly broad non-compete clauses and related labor market restraints. Employers should remain cautious with non-compete agreements, as enforcement persists without the federal ban.

States Accelerate Non-Compete Restrictions

At the same time, as the FTC’s proposed nationwide non-compete ban and its vacatur, individual states have continued accelerating their own reforms. In 2025 alone, 13 states enacted legislation impacting non-compete enforceability:

• Arkansas: Passed legislation banning the use of non-competes for physicians and health care workers. The bill became effective on August 3, 2025.
• Colorado: Passed legislation providing that non-competes are only enforceable against employees earning more than $127,091. The statute became effective on August 6, 2025.
• Florida:  Passed the CHOICE Act that limits noncompete enforceability to “covered employees” earning twice the county average income. The Act also provides that temporary injunctions are the proper remedy and should be granted when a covered employee breaches a noncompete provision. The Act became effective on July 3, 2025.
• Indiana: Passed legislation implementing a ban on non-competes between physicians and covered health care entities entered into on or after July 1, 2025.
• Louisiana: Passed legislation that added position specific duration limits for enforceability of non-competes (with the act’s provisions applying to all physician contracts on January 1, 2025):
  • Maximum 3 years for primary care physicians
  • Maximum 5 years for other physicians
  • Parish specific geographic limits.
• Maryland: Passed legislation that expanded its non-compete ban for physicians to now include additional healthcare professionals such naturopathic physicians, RNs, APNs, and PAs. The Act’s effective date was July 1, 2025.
• Montana: Passed legislation containing broad non-compete reforms, some of which were effective April 16, 2025, with additional provisions becoming effective on January 1, 2026. The first law, effective on April 16, 2025, broadened the existing restrictions on non-compete and non-solicitation agreements to include naturopathic physicians, registered professional nurses, advanced practice registered nurses, and physician assistants. A second law, enacted on May 19, 2025, extended the ban to all licensed physicians and added requirements related to the repayment of physician loans, relocation expenses, signing bonuses, etc.
• Oregon: Passed legislation that introduced new restrictions on the use of non-competes, certain nondisclosure agreements, and other agreements for physicians and nurses effective June 9, 2025. With limited exceptions, Oregon’s SB 951 declares non-competition agreements with “medical licensees”—including Oregon-licensed physicians, nurse practitioners, physician associates, and naturopathic practitioners—void and unenforceable
• Pennsylvania: Passed legislation that prohibited non-competes for healthcare professionals lasting longer than one year. The Act became effective January 1, 2025 and only applies to agreements entered into after that date.
• Texas: Passed legislation that updated the criteria for enforceable non-compete agreements with physicians licensed by the Texas Medical Board. The Act became effective September 1, 2025.
• Utah: Passed legislation that prohibited healthcare platforms (enabling healthcare providers to find shift work) from using non-competes for the temporary healthcare workers who obtain work through their platforms. The Act became effective May 7, 2025.
• Virginia: Passed legislation that expanded its “low wage” exemption to include all FLSA overtime eligible workers, regardless of income and significantly broadened the existing ban. The Act became effective July 1, 2025.
• Wyoming: Passed legislation that banned all non-competes unless certain requirements were met. The law provides exceptions for situations involving the sale or purchase of a business, protection of trade secrets, recovery of training and relocation expenses, and agreements with executives or key professional staff. The Act became effective on July 1, 2025.

We expect similar proposed legislation in 2026. In fact, the Missouri House of Representatives just began their legislative session, and there already is a pending bill, HB 2184, which seeks to broadly prohibit the enforcement of non-compete agreements between employers and physicians. In addition to Missouri, several other states, including Kentucky, Michigan, New York, North Carolina, Ohio, Tennessee, Texas, Vermont, and Washington, have legislation pending all of which will impact, if not outright ban, non-competes. UB Greensfelder is closely monitoring these developments to provide timely updates.

Trends Shaping Non-Compete Laws in 2026

Looking ahead to 2026, several trends are shaping the future of non-compete regulation. First, we expect states to propose, and pass, legislation impacting restricting the enforceability of non-competes, either via industry-specific restrictions or income thresholds. Based upon recent legislation, we anticipate more legislation focused on specific industries, like health care (though the definition of healthcare worker will vary state to state). In addition, there may be proposed legislation banning non-competes for other industries, including veterinarians, restaurant and retail workers, broadcast employees, or domestic workers. Additionally, we anticipate more income-based bans that limit enforceability of non-competes for employees earning more than a statutorily defined threshold, which will differ state to state. Right now, nine states have income threshold bans and they vary wildly: some as low as the Federal poverty standard and other thresholds reaching mid-six figure incomes.

Second, over the past few years, multiple states have introduced bills that would ban non-competes for all employer/employee relationships. Right now, four states, California, Oklahoma, North Dakota, and Minnesota, have enacted complete bans of non-competes. Last year, Washington, Illinois, and Michigan, and Tennessee introduced legislation that would have banned non-competes (and in Illinois’ case, also banned customer non-solicits) if they had been enacted. We also expect states to continue introducing legislation that would ban all restrictive covenant provisions.   

Lastly, we expect the FTC to continue its enforcement activities against employers using non-competes that it believes are deceptive, unfair, or constitute anticompetitive labor market practices. In December, the FTC reached a consent order with a New Jersey company that was using “no hire” agreements with a competitor to prevent its employees from working for that competitor. While not a direct attack on non-competes, the FTC Chair Andrew Ferguson made clear in his announcement that the FTC is continuing to focus on investigating and prosecuting “deceptive, unfair, and anticompetitive labor-market practices that harm workers. These actions have included recent action in Gateway Services, Inc., which stopped the enforcement of nearly 1,800 noncompete agreements, issuing a call for the public to identify anticompetitive non-competes, and launching a cross-agency Joint Labor Task Force.”

Compliance Challenges for Employers

The FTC’s enforcement actions, coupled with the heightened state-level activism creates significant uncertainty and compliance challenges for multijurisdictional employers. This patchwork system is likely to persist, requiring careful monitoring and tailored strategies across states.

The past few years have marked a turning point in non-compete law. With the FTC’s nationwide ban stalled, states have stepped in, which creates a fragmented, fast-changing legal landscape for employers. The FTC continues case-by-case enforcement so employers should practice vigilance and proactive compliance to mitigate risk in this uncertain environment.

If your business has questions regarding non-compete agreements, contact your UBG attorney or Chris Pickett at cpickett@ubglaw.com.

The information provided in this article speaks only to the information and guidance we have available as of the date of publication and is subject to change. This legal update was created by UB Greensfelder LLP and is not intended as a substitute for professional legal advice. Receipt, by itself, does not create an attorney-client relationship. For any questions, or for further information, please contact your UB Greensfelder attorney.