As of 2026, there is no federal ban on noncompete agreements, following the FTC's withdrawal of its 2024 rule. Employers must navigate a complex landscape of state laws, with several states outright banning noncompetes while others impose salary thresholds or specific exemptions. Companies are encouraged to audit their noncompete agreements, tailoring them to job roles and business interests, and to consider using narrower alternatives like non-solicitation or confidentiality clauses to mitigate legal risks.
- The FTC’s 2024 nationwide rule was removed February 12, 2026; enforcement now targets employers through investigations, consent orders, and warning letters.
- California, Minnesota, North Dakota, Oklahoma, and Wyoming prohibit most noncompetes, while Washington will void most covenants June 30, 2027, with notices due October 1, 2027.
- Salary thresholds and profession based exemptions vary by state, and choice of law clauses may fail where an employee lives and works.
- The Rollins order requires the company to stop enforcing restrictions covering more than 18,000 employees; employers should reserve noncompetes for roles protecting genuine trade secrets.
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There is no federal ban on noncompetes in effect for 2026. The FTC’s 2024 rule was removed from the Code of Federal Regulations, and the agency now enforces case by case, through consent orders like the one against Rollins. Employers should audit every agreement by state, narrow overly broad restrictions, and treat this moment as a hiring opportunity rather than a compliance scramble. We help you execute that plan without slowing your pipeline.
Federal Status and Enforcement Approach in 2026
The path here matters because it shapes what the FTC does next. In April 2024, the Commission issued a rule that would have banned most noncompetes nationwide. A federal court blocked it that August, the FTC withdrew its appeal in September 2025, and the rule was formally removed from the CFR on February 12, 2026. There is no nationwide ban. There is, however, an active enforcement agency with a different tool.
Rather than a blanket rule, the FTC now pursues targeted investigations, consent orders, and warning letters against employers whose noncompetes look anticompetitive on their face, particularly when they cover low-wage or non-sensitive roles under a one-size-fits-all policy.
The FTC’s April 2026 action against Rollins also included warning letters sent to other employers in the same industry, signaling that sector-wide scrutiny, not just single-company enforcement, is part of the current strategy.
For hiring teams, the practical consequence is straightforward:
- Blanket noncompete policies applied to every hire, regardless of role or access to sensitive information, carry the highest enforcement risk.
- Documented, role-specific restrictions tied to a real business interest are far more defensible.
- Keeping records that show you considered narrower alternatives reduces exposure if a regulator or court ever asks.
Treat 2026 as a year of targeted risk, not blanket risk. The agencies and courts are not outlawing the tool. They are penalizing how carelessly it gets used.
State Rules in 2026: Bans, Thresholds, and Deadlines to Track
While the federal government steps back, states have stepped forward, and the result is a genuine patchwork. Several states ban most noncompetes outright, including California, Minnesota, North Dakota, Oklahoma, and Wyoming. If you hire in any of these, a standard noncompete clause is largely unenforceable from the start.
Washington is in transition. Under HB1155, most noncompetition covenants in the state become void effective June 30, 2027, and employers must notify affected current and former employees by October 1, 2027. If you have Washington-based employees under existing covenants, that notice obligation needs to be on your calendar now, not in late 2027.
Other states use salary-threshold models, allowing noncompetes only above a certain compensation level. These thresholds adjust periodically and vary by state, so verify the current figure in your state’s statute before relying on any number, rather than assuming last year’s threshold still applies.
A few other wrinkles matter for multistate hiring:
- Several states restrict noncompetes by profession, with healthcare workers and broadcast employees commonly carved out for special protection.
- Florida enforces noncompetes more strongly for high earners under its CHOICE Act framework, a notable exception to the national trend toward restriction, explained in more detail by Calil Law’s overview of Florida’s noncompete rules.
- When you hire across state lines, choice-of-law clauses can create conflicts: a covenant drafted under one state’s law may be unenforceable where the employee actually lives and works.
Multistate hiring is where this gets genuinely complicated, and it is exactly where employment counsel earns their fee. A clause that is standard in Texas can be void on arrival in California.
A Hiring Checklist for Noncompetes in 2026
Here is a practical sequence HR teams can start this week.
- Inventory every active covenant by state, employee class, and signing date, flagging any that may already be void under a state ban or threshold change.
- Review your offer process and add required written notice at the offer stage in states that mandate it, rather than burying disclosure in onboarding paperwork.
- Narrow the scope of any restriction that remains: tailor it to actual job duties, limit the geographic reach, and document the specific business interest it protects.
- Evaluate garden-leave or compensation-based alternatives in states that require payment during a restricted period, so the covenant survives a legal challenge.
- Loop in counsel on choice-of-law clauses before extending offers to candidates in states with strong anti-noncompete protections, and build a notification plan for any statute, like Washington’s, that requires proactive outreach.
Pro Tip: Run your covenant inventory before your next offer cycle, not after, so hiring managers never have to choose between speed and compliance.
None of this needs to slow down an offer. Candidates expect clarity, and a hiring team that can answer “what does this noncompete actually restrict” in one sentence moves faster than one that has to check with legal every time. Pair this review with your broader job posting practices for 2026 so compliant language shows up from the first touchpoint, not just the final contract.
Better Alternatives to Broad Noncompete Clauses
A noncompete restricts where someone can work next. A non-solicitation clause restricts who they can recruit or sell to. A confidentiality or trade-secret agreement restricts what they can share. These are three different tools, and courts increasingly favor the narrower two when a broad noncompete would have done the job anyway.
Drafting principles that hold up:
- Keep duration short and scope specific to the role, not a company-wide template.
- Define geography and activity precisely rather than borrowing generic language from an old contract.
- Provide explicit consideration (extra pay, a signing bonus, or garden-leave compensation) where state law expects something in exchange for the restriction.
- Default to non-solicitation for customer and employee protection; reserve a noncompete for the rare role where trade secrets genuinely require it.
Pro Tip: If you can protect the business interest with a non-solicit or confidentiality clause, use that first. A narrower tool that survives a legal challenge beats a broad one that doesn’t.
The Rollins Case: What the FTC’s Action Teaches Employers
The clearest enforcement example from this year involves Rollins, a pest control company. The FTC’s final consent order, approved June 22, 2026, required the company to stop enforcing noncompete agreements covering a substantial portion of its workforce, many bound by terms lasting up to two years within a 75-mile radius regardless of their role or seniority.
The order requires Rollins to cease enforcing its existing noncompetes, notify affected employees that the restrictions no longer apply, and maintain records demonstrating compliance.
The takeaway isn’t that noncompetes are dead. It’s that blanket coverage applied without regard to role or access to sensitive information is exactly what draws regulatory attention. A technician with no customer relationships and a regional sales director do not need the same restriction.
How We Help Employers Hire Through This Shift
We built our staffing practice around matching candidates to roles across administrative, customer service, media, IT, and leadership functions, and that specialization means we understand considerations around protective covenants. When you’re revising agreement language, we can help source candidates for roles under your updated policies and coordinate onboarding timelines around any notice periods. For jurisdiction-specific questions, pair that work with employment counsel. Our legal and compliance staffing specialists are also available when you need contract support to manage the review itself.
What HR Leaders Should Prioritize Right Now
If I had to rank the to-do list, the inventory comes first: you cannot manage risk in agreements you haven’t mapped against current state law. Second, favor mobility-friendly protections, narrow non-solicits and documented business interests over broad covenants that invite scrutiny without adding real protection. Third, use a staffing partner to keep offers moving while legal questions get resolved. Waiting for perfect clarity costs you candidates.
— Bradford
Keep Hiring Moving While You Update Your Policies
We know the instinct when legal uncertainty hits is to pause hiring until every contract is rewritten. That’s the wrong call. We can help you keep filling roles through Direct Hire placements or Contract Staffing while your agreement language catches up.
- We source pre-screened candidates matched for role fit, so you’re not stretching a broad noncompete to cover a job that doesn’t need one.
- Our employer portal gives you real-time visibility into requisitions and candidate flow as you adjust policies state by state.
- Contract staffing lets you bring in talent now without locking into long-term agreement language you may need to revise again.
Reach out through our employer portal to discuss a staffing plan that keeps pace with where noncompete law is heading.
This article is general information, not a substitute for advice from a qualified lawyer. Consult a qualified legal professional about your own circumstances before acting on anything here.
FAQ
Is there a federal noncompete ban in effect in 2026?
No. The FTC’s 2024 rule was blocked in court and formally removed from the Code of Federal Regulations as of February 12, 2026. The agency now enforces against specific employers through consent orders rather than a nationwide rule.
Which states ban noncompete agreements outright?
California, Minnesota, North Dakota, Oklahoma, and Wyoming currently prohibit most noncompete agreements. Other states, including Washington, have passed laws that will void most covenants on a future effective date, so checking the current statute for each hiring state is essential.
What happened in the FTC’s case against Rollins?
The FTC approved a final consent order against Rollins in June 2026, requiring the company to stop enforcing noncompetes covering more than 18,000 employees and to notify affected workers. The case is a clear signal that broad, role-blind covenants draw regulatory attention.
What should employers use instead of a broad noncompete?
Many employers are shifting toward narrowly tailored non-solicitation agreements and confidentiality or trade-secret protections, which tend to hold up better under current scrutiny. A noncompete still has a place for roles with genuine access to trade secrets, as long as it’s specific and supported by documented consideration.
How can Careerscape help with hiring during this transition?
We offer direct hire and contract staffing support, including candidate sourcing and onboarding coordination, so your hiring pace doesn’t stall while you update agreement language. We recommend pairing our staffing support with employment counsel for jurisdiction-specific compliance questions.