Are Non-Compete Agreements Enforceable?

Beth Dean 09.24.23
2023-10-24 Nextep blog - Non-compete agreements

The Answer Depends on Your State…For Now

As we reported in January, non-compete agreements preventing employees from working for competitors are becoming increasingly unenforceable. The FTC is currently working on banning them at a federal level, but unless and until that decision comes, non-competes are enforced at a state (and sometimes even local) level. 

As a reminder, when state and federal law differs, the one to use must be the one that benefits the employee the most.

Remember that to be enforceable, non-compete agreements must be in writing and signed by both the employer and the employee. Non-compete agreements can also be challenged in court. If a prospective, current, or former employee believes that a non-compete agreement is unreasonable or unenforceable, they can file a lawsuit to potentially declare the agreement void.

Here’s a rundown of where we currently stand on non-compete agreements, by state:

Note: This list is current as of October 24, 2023. State and local laws are subject to change at any time. Be sure to verify with your local authority or attorney when making decisions for your company.

  • Alabama: Non-compete agreements are enforceable if they are reasonable in their scope and duration.
  • Alaska: Non-compete agreements are enforceable if they are reasonable in their scope and duration, and if the employee receives something of value in exchange for signing the agreement.
  • Arizona: Non-compete agreements are enforceable if they are reasonable in their scope and duration, and if the employee is a high-level executive or manager.
  • Arkansas: Non-compete agreements are enforceable if they are reasonable in their scope and duration, and if the employee is a high-level executive or manager.
  • California: Non-compete agreements are generally unenforceable, except in very limited circumstances.
  • Colorado: Non-compete agreements are enforceable if they are reasonable in their scope and duration.
  • Connecticut: Non-compete agreements are enforceable if they are reasonable in their scope and duration, and if the employee receives something of value in exchange for signing the agreement.
  • Delaware: Non-compete agreements are enforceable if they are reasonable in their scope and duration, and if the employee is a high-level executive or manager.
  • Florida: Non-compete agreements are enforceable if they are reasonable in their scope and duration, and if the employee receives something of value in exchange for signing the agreement.
  • Georgia: Non-compete agreements are enforceable if they are reasonable in their scope and duration, and if the employee is a high-level executive or manager.
  • Hawaii: Non-compete agreements are generally unenforceable, except in very limited circumstances.
  • Idaho: Non-compete agreements are enforceable if they are reasonable in their scope and duration, and if the employee receives something of value in exchange for signing the agreement.
  • Illinois: Non-compete agreements are enforceable if they are reasonable in their scope and duration, and if the employee is a high-level executive or manager.
  • Indiana: Non-compete agreements are enforceable if they are reasonable in their scope and duration, and if the employee receives something of value in exchange for signing the agreement.
  • Iowa: Non-compete agreements are enforceable if they are reasonable in their scope and duration, and if the employee is a high-level executive or manager.
  • Kansas: Non-compete agreements are enforceable if they are reasonable in their scope and duration, and if the employee receives something of value in exchange for signing the agreement.
  • Kentucky: Non-compete agreements are enforceable if they are reasonable in their scope and duration, and if the employee is a high-level executive or manager.
  • Louisiana: Non-compete agreements are enforceable if they are reasonable in their scope and duration, and if the employee receives something of value in exchange for signing the agreement.
  • Maine: Non-compete agreements are generally unenforceable, except in very limited circumstances.
  • Maryland: Non-compete agreements are enforceable if they are reasonable in their scope and duration, and if the employee receives something of value in exchange for signing the agreement.
  • Massachusetts: Non-compete agreements are generally unenforceable, except in very limited circumstances.
  • Michigan: Non-compete agreements are enforceable if they are reasonable in their scope and duration, and if the employee receives something of value in exchange for signing the agreement.
  • Minnesota: Non-compete agreements are generally unenforceable, except in very limited circumstances.
  • Mississippi: Non-compete agreements are enforceable if they are reasonable in their scope and duration, and if the employee is a high-level executive or manager.
  • Missouri: Non-compete agreements are enforceable if they are reasonable in their scope and duration, and if the employee receives something of value in exchange for signing the agreement.
  • Montana: Non-compete agreements are enforceable if they are reasonable in their scope and duration, and if the employee receives something of value in exchange for signing the agreement.
  • Nebraska: Non-compete agreements are enforceable if they are reasonable in their scope and duration, and if the employee is a high-level executive or manager.
  • Nevada: Non-compete agreements are enforceable if they are reasonable in their scope and duration, and if the employee receives something of value in exchange for signing the agreement.
  • New Hampshire: Non-compete agreements are enforceable if they are reasonable in their scope and duration, and if the employee receives something of value in exchange for signing the agreement.
  • New Jersey: Non-compete agreements are generally unenforceable, except in very limited circumstances.
  • New Mexico: Non-compete agreements are enforceable if they are reasonable in their scope and duration, and if the employee receives something of value in exchange for signing the agreement.
  • New York: Non-compete agreements are enforceable if they are reasonable in their scope and duration,
  • North Carolina: Non-compete agreements are enforceable if they are reasonable in their scope and duration, and if the employee is a high-level executive or manager.
  • North Dakota: Non-compete agreements are enforceable if they are reasonable in their scope and duration, and if the employee receives something of value in exchange for signing the agreement.
  • Ohio: Non-compete agreements are enforceable if they are reasonable in their scope and duration, and if the employee receives something of value in exchange for signing the agreement.
  • Oklahoma: Non-compete agreements are generally unenforceable.
  • Oregon: Non-compete agreements are generally unenforceable, except in very limited circumstances.
  • Pennsylvania: Non-compete agreements are enforceable if they are reasonable in their scope and duration, and if the employee receives something of value in exchange for signing the agreement.
  • Rhode Island: Non-compete agreements are generally unenforceable, except in very limited circumstances.
  • South Carolina: Non-compete agreements are enforceable if they are reasonable in their scope and duration, and if the employee is a high-level executive or manager.
  • South Dakota: Non-compete agreements are enforceable if they are reasonable in their scope and duration, and if the employee receives something of value in exchange for signing the agreement.
  • Tennessee: Non-compete agreements are enforceable if they are reasonable in their scope and duration, and if the employee receives something of value in exchange for signing the agreement.
  • Texas: Non-compete agreements are enforceable if they are reasonable in their scope and duration, and if the employee receives something of value in exchange for signing the agreement.
  • Utah: Non-compete agreements are enforceable if they are reasonable in their scope and duration, and if the employee receives something of value in exchange for signing the agreement.
  • Vermont: Non-compete agreements are generally unenforceable, except in very limited circumstances.
  • Virginia: Non-compete agreements are generally unenforceable, except in very limited circumstances.
  • Washington: Non-compete agreements are generally unenforceable, except in very limited circumstances.
  • West Virginia: Non-compete agreements are enforceable if they are reasonable in their scope and duration, and if the employee receives something of value in exchange for signing the agreement.
  • Wisconsin: Non-compete agreements are enforceable if they are reasonable in their scope and duration, and if the employee is a high-level executive or manager.
  • Wyoming: Non-compete agreements are enforceable if they are reasonable in their scope and duration, and if the employee receives something of value in exchange for signing the agreement.

Please note that this is not an exhaustive list, and the laws in each state may change at any time. It is always best to consult with an attorney or your HR Business Partner at Nextep to understand the specific laws in your state.

Disclaimer: This is not to be construed as legal advice. If in question, please consult with your attorney.


Related Reading

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Read more about the FTC’s efforts to ban non-compete agreements on the national level.


 

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