The Non-Compete Landscape. Here's What's Actually Enforceable in 2026

What Is a Non-Compete Agreement?

A non-compete agreement, sometimes called a covenant not to compete, is a contract provision that restricts an employee’s ability to work for a competitor, or start a competing business, for a set period of time after leaving a job, usually within a defined geographic area. Employers typically use them to protect trade secrets, client relationships, or the investment they’ve made in training an employee. They’re distinct from two other common restrictive covenants that often get confused with them: a non-solicitation agreement, which restricts contacting former clients or coworkers rather than working for a competitor at all, and a non-disclosure agreement, which restricts sharing confidential information but doesn’t restrict where you can work afterward. All three are frequently bundled into the same employment contract, but they’re analyzed separately under the law, and one being unenforceable doesn’t mean the others are too.
In 2024, the Federal Trade Commission tried to ban most non-compete agreements nationwide in one stroke. That attempt is now dead, formally and completely. What’s left is a genuine patchwork: whether your non-compete is enforceable depends entirely on which state’s law applies, and that answer ranges from a near-total ban to routine enforcement, sometimes just across a state line from each other.

What Happened to the Federal Ban?

The FTC’s 2024 rule would have voided most existing non-competes and banned new ones entirely, treating them as an unfair method of competition. It never took effect. A federal court in Ryan LLC v. FTC (N.D. Tex. 2024) vacated the rule just before its effective date, holding the FTC lacked authority to issue a sweeping, industry-wide ban of this kind. The Fifth Circuit upheld that result, and in February 2026, the FTC formally removed the rule from the Code of Federal Regulations, closing the book on it for good.

The FTC hasn’t given up on non-competes entirely. It’s shifted instead to case-by-case enforcement under its general unfair-competition authority, meaning individual agreements or employers can still draw scrutiny, just not through a blanket nationwide rule. For everyone else, non-compete enforceability is now, once again, entirely a matter of state law.

The Patchwork: From Near-Total Bans to Routine Enforcement

A handful of states, California, Minnesota, North Dakota, and Oklahoma among them, ban most employee non-competes outright, regardless of income or role. Most other states apply a reasonableness test instead, weighing the duration, geographic scope, and legitimate business interest behind the restriction on a case-by-case basis. A growing middle group ties enforceability to an income threshold instead, an approach several states have adopted or expanded just in the past two years, though which side of the threshold gets protected varies by state, as DC and Maryland illustrate below.

Where DC and Maryland Actually Stand

DC’s non-compete ban is genuinely income-dependent, and it runs in the opposite direction from what you might expect. Under the Ban on Non-Compete Agreements Amendment Act, as narrowed by the Non-Compete Clarification Amendment Act of 2022, non-competes are void for most employees earning below a set compensation threshold, which rises each year with inflation. As of January 1, 2026, that threshold is $162,164 annually for general employees and $270,274 for medical specialists. Below those amounts, a non-compete is generally unenforceable. Above them, DC actually permits non-competes for these “highly compensated employees,” subject to strict requirements: the agreement must specify the functional scope of the restriction, last no longer than 365 days (730 for medical specialists), and be provided at least 14 days before the employee starts or is asked to sign.
Confidentiality agreements and certain anti-moonlighting policies remain enforceable regardless of income. See our Non-Competition Agreements page for the full breakdown, including what still is enforceable in DC.
Maryland’s income threshold runs the opposite direction. Under its Non-Compete and Conflict of Interest Clause Act, non-competes are void for workers earning at or below 150% of the state minimum wage, a threshold that moves each time the minimum wage does. Above that line, Maryland applies a traditional reasonableness test rather than a categorical rule either way.
In short: DC protects lower earners and permits non-competes for high earners, while Maryland protects lower earners too, but doesn’t have DC’s separate carve-out expressly permitting them for high earners; it simply applies ordinary reasonableness review once you’re above the threshold. Client list and proprietary information protections remain enforceable in both jurisdictions regardless of income.

What This Means If You're Considering, or Already Bound By, a Non-Compete

  • Your state matters more than your contract’s language. A non-compete drafted to be enforceable in Virginia may be void the moment it’s applied to someone actually working in DC.
  • Your income matters just as much as your state. In DC specifically, whether you’re above or below the highly-compensated-employee threshold can single-handedly determine whether your non-compete is enforceable at all.
  • Remote work complicates the analysis. Courts increasingly look at where you actually work and serve clients, not just where your employer is headquartered.
  • An unenforceable non-compete doesn’t mean everything in your agreement is unenforceable. Confidentiality and non-solicitation provisions are usually analyzed separately, and often survive even where the non-compete itself doesn’t. See our Executive Employment Contracts overview for how these different restrictive covenants interact.

Frequently Asked Questions

Not in its original form. The rule has been formally removed from federal regulations following its court defeat. The FTC has signaled it will pursue individual cases instead of a blanket rule, but nothing prevents a future FTC from trying a different regulatory approach down the road.
Generally, no. The DC ban only applies to agreements entered into on or after October 1, 2022. Non-competes signed before that date are still governed by DC’s older common law standard.
Total compensation for this purpose includes salary, bonuses, commissions, and vested stock, not just base pay, and the threshold itself rises every year with inflation. Whether a specific non-compete is enforceable often requires reviewing your actual total compensation against the threshold in effect on the date you signed.
This is exactly the kind of question that depends on the specific facts, including your contract’s choice-of-law clause, where you actually perform your work, and where your employer is trying to enforce the agreement. It’s a genuinely fact-specific analysis, not a simple lookup.

Bottom Line

The end of the federal ban didn’t make non-competes more enforceable everywhere, it just handed the question back to a genuinely fragmented set of state rules. Whether yours holds up depends heavily on where you actually work, how much you earn, when you signed it, and what specific restriction is actually being enforced. That’s worth a real legal review, not a guess.

Questions about Non-Compete at Work?

Speak with Wilkenfeld Law Office about your situation and learn what options may be available.
Schedule a consultation

Or call 301.245.3035 · Intake@WilkenfeldLO.com

This post provides general information and is not legal advice. If you have questions about a non-compete, confidentiality agreement, or other restrictive covenant, contact us for a free consultation.

Reviewed by Ari Wilkenfeld, Esq. (DC Bar No. 461063; MD Bar No. 9806240300). Ari has over 27 years of experience litigating in federal and state courts, and before the U.S. Equal Employment Opportunity Commission (EEOC), the U.S. Merit Systems Protection Board (MSPB), and various arbitration panels. Ari has been recognized by Esquire Magazine as “a famously determined Civil Rights lawyer” and by the New York Post as “a high powered DC Lawyer.” Last updated: September 22, 2026.

Scroll to Top