Non-Compete Agreement Law in the United States
Whether your non-compete agreement is enforceable depends on which state you live and work in. There is no federal law governing non-competes, so rules vary dramatically: some states ban them entirely, others limit them by income or job type, and most apply a 'rule of reason' test.
How do I know if my non-compete is enforceable?
To assess enforceability, you need to check five key factors: your state of residence, where you performed work, your earnings level, your job category, and the reason for your termination. Because these rules depend on your specific job duties, Ask Sawyer researches federal and state law to answer questions about your facts.
What makes a non-compete invalid or unenforceable?
A non-compete can be invalid for several reasons, including: - No legitimate business interest: The agreement must protect more than ordinary competition (Fla. Stat. § 542.335(1)(b)). - Overbroad scope: Restrictions on time, geography, or activity that exceed what is necessary to protect the employer's interest. - Inadequate consideration: Signing during employment without new benefits (like a promotion or bonus) in states that require "independent consideration" (RCW 49.62.020(1)(a)). - Missing required notices: Failure to provide advance written notice as required by states like Oregon, Washington, and Massachusetts. - Income below threshold: Earning less than state-specific amounts like $126,858.83 in Washington (RCW 49.62.020(1)(b)) or $119,541 in Oregon (ORS 653.295). - Wrong job category: Being an hourly worker in Nevada (NRS 613.195(3)), a healthcare practitioner in certain states, or a non-exempt employee in Massachusetts (M.G.L. c. 149, § 24L(c)).
What does a valid non-compete need to include?
Where state law permits non-competes, a typical agreement contains: - Protected interest recitals identifying trade secrets, confidential information, customer relationships, or specialized training (Fla. Stat. § 542.335(1)(b)). - Duration restriction, commonly 6 to 24 months, with some states creating rebuttable presumptions (Fla. Stat. § 542.335(1)(d), (e)). - Geographic scope limited to territory where the employee worked or the employer has customers. - Activity restriction on specific competitive roles or services. - Remedies clause for injunctive relief, damages, and attorney's fees for prevailing parties. - Choice-of-law and forum selection clauses, though these are frequently overridden by state statutes protecting resident employees.
When are non-competes unenforceable?
| Restriction | Jurisdictions | Legal Basis |
|---|---|---|
| Complete prohibition — all employment non-competes void | California, North Dakota, Oklahoma, Minnesota | Cal. Bus. & Prof. Code § 16600; Minn. Stat. § 181.988, subd. 2(a) |
| Income-based voidness — below threshold earnings | Washington ($126,858.83 employees / $317,147.09 contractors, 2026); Oregon ($119,541, 2026); Virginia (low-wage employees); Connecticut (low-wage: <3× minimum wage) | RCW 49.62.020(1)(b); ORS 653.295; Va. Code § 40.1-28.7:8 |
| Hourly workers | Nevada | NRS 613.195(3) |
| Employees terminated without cause or laid off | Massachusetts; Nevada (during restructuring, only while employer pays compensation) | M.G.L. c. 149, § 24L(c)(3); NRS 613.195(5) |
| Student interns, non-exempt FLSA employees, workers under 18 | Massachusetts | M.G.L. c. 149, § 24L(c) |
| Healthcare practitioners | Multiple states including Massachusetts, Nevada, Virginia, Texas, Delaware, Colorado (rare disorder treatment), New Hampshire, Rhode Island, New Mexico, South Dakota (certain practitioners), Connecticut | M.G.L. c. 112, §§ 12X, 74D, 129B, 135C; NRS 613.195; Va. Code § 40.1-28.7:8; Tex. Bus. & Com. Code § 15.50(b)-(c); 6 Del. Code § 2707 |
| Technology business employees | Hawaii | Haw. Rev. Stat. § 480-4(d) |
| Broadcasters | Arizona, Connecticut, DC, Illinois, Maine, Massachusetts, Washington | M.G.L. c. 149, § 186 |
California's enhanced protections make it unlawful to even include a non-compete clause in an employment contract (Cal. Bus. & Prof. Code § 16600.1) and void such agreements regardless of where signed, with a private right of action for injunctive relief, actual damages, and attorney's fees (Cal. Bus. & Prof. Code § 16600.5).
2026 Income Thresholds for Non-Compete Enforceability by State
| State | Employee Threshold | Contractor Threshold | Source |
|---|---|---|---|
| Washington | $126,858.83 | $317,147.09 | RCW 49.62.020(1)(b) |
| Oregon | $119,541 | N/A | ORS 653.295 |
What factors do courts use to decide if a non-compete is enforceable?
Consideration
| Situation | Requirement |
|---|---|
| At hiring | Offer of employment generally sufficient |
| During employment | Varies by state: Washington requires "independent consideration" (RCW 49.62.020(1)(a)); Massachusetts requires "fair and reasonable consideration independent from continued employment" — typically a garden leave clause (≥50% of highest prior base salary) or other specified benefit (M.G.L. c. 149, § 24L(b)(1), (b)(6)) |
Reasonableness Analysis
Under the majority common-law test (consistent with the Restatement (Second) of Contracts framework, though exact text not retrieved in sources), a non-compete is unenforceable if: - The restraint exceeds what is needed to protect the employer's legitimate business interest, or - The employer's need is outweighed by hardship to the worker and probable public injury
Protection from ordinary competition is not a legitimate interest.
Judicial Modification Doctrines
| Doctrine | Effect | States |
|---|---|---|
| Red pencil — void entire agreement if any part unreasonable | All-or-nothing | |
| Blue pencil — strike unreasonable provisions, enforce remainder | Severance | |
| Reformation — rewrite to reasonableness | Judicial revision | Florida (discretionary: Fla. Stat. § 542.335(1)(c)); Nevada (mandatory: NRS 613.195(6)); Massachusetts (discretionary: M.G.L. c. 149, § 24L(d)) |
Notice and Procedural Requirements
| State | Requirement | Consequence of Non-Compliance |
|---|---|---|
| Oregon | Written notice 2 weeks before employment starts; signed copy within 30 days after termination (agreements from Jan. 1, 2022) | Agreement void |
| Washington | Written disclosure by offer acceptance; independent consideration if signed during employment | Unenforceable |
| Massachusetts | Written, signed, 10 business days' notice, right-to-counsel disclosure | Unenforceable |
Where State Law Goes Further
This page describes the national baseline and majority common-law framework. Many states impose significantly stricter requirements or prohibit non-competes entirely. For example:
- California voids virtually all employment non-competes with narrow sale-of-business exceptions
- Massachusetts mandates garden leave or equivalent consideration, caps duration at 12 months, and excludes broad worker categories
- Nevada mandates judicial reformation and categorically excludes hourly workers
- Minnesota voids all post-employment non-competes with limited exceptions
Because whether your specific agreement is enforceable depends on your state of residence, your employer's location, where you performed work, and your earnings and job duties, Ask Sawyer researches the actual statutes and cases governing your situation.
See our state-by-state non-compete comparison or select your specific state: /law/state/[state]/documents/noncompete-agreement/rules.
Common Pitfalls
Overbroad geographic or temporal scope. Restrictions extending beyond where the employee actually worked or the employer's actual customer base are vulnerable. In red-pencil states, overbreadth voids the entire agreement.
Inadequate consideration for mid-employment agreements. Requiring a current employee to sign without new benefits—promotion, bonus, specialized training, or garden leave—renders the agreement unenforceable in jurisdictions requiring independent consideration.
Failure to use "prevailing party" language in fee clauses. General "costs including attorney's fees" language without "prevailing party" specification is unenforceable under federal procedural standards (Donnelly v. ProPharma Group Topco, LLC, No. 21-894-MAK (D. Del. Aug. 28, 2023)).
Choice-of-law and forum-selection failures. Selecting the law of a permissive state for an employee domiciled in a restrictive state may be overridden. Massachusetts voids such provisions for its residents or those employed there 30+ days (M.G.L. c. 149, § 24L(e)). Minnesota permits its domiciled employees to void foreign forum/waiver provisions (Minn. Stat. § 181.988, subd. 3).
Nondisclosure provisions operating as de facto non-competes. Overbroad confidentiality clauses that effectively prevent all competitive activity may be struck as unenforceable non-competes in disguise (Belimed, Inc. v. Bleecker, No. 2:22-cv-00891-DCN (D.S.C. Mar. 29, 2022)).
Enforcing against laid-off employees. Massachusetts, Nevada, and Washington impose specific restrictions or compensation requirements when employees are terminated without cause or laid off.
Whether your non-compete is likely enforceable requires analyzing your specific earnings, job duties, termination circumstances, and the states with which you and your employer have connections—Ask Sawyer can research these factors against current law.