The FTC's final rule banning most non-competes was enjoined in federal court before it took effect, but the litigation outcome did not restore the pre-rule status quo. State-level non-compete reform accelerated in parallel with the federal rulemaking — California, Minnesota, North Dakota, and Oklahoma already ban non-competes categorically, and a dozen additional states have enacted meaningful restrictions since 2023. The executive who signed a non-compete in 2019 in a state that has since restricted enforcement is in a fundamentally different legal position than they may realize.
For employers, the post-FTC-rule landscape requires a fresh assessment of non-compete strategy. Agreements that were enforceable at signing may no longer be enforceable under current law in the state where the executive now works — remote work has created significant choice-of-law complexity that many companies haven't resolved. Trade secret law has simultaneously strengthened: the Defend Trade Secrets Act has generated a substantial body of favorable federal precedent, and courts have increasingly been willing to issue preliminary injunctions against trade secret misappropriation even in states where non-competes are unenforceable. The practical advice for many employers is to shift reliance from non-competes toward robust trade secret and confidentiality agreements.
For executives, the calculus is different. Non-compete enforceability is now genuinely uncertain in most jurisdictions, and that uncertainty cuts both ways. An executive who leaves a restrictive employer and immediately joins a direct competitor may find that the non-compete is enforceable — or may find that the agreement is void under current state law. The answer depends on the governing law clause, the jurisdiction where the executive works, and the specific terms of the agreement. Getting that analysis wrong is expensive: injunctions against employment pendente lite are real, and six months without income while litigation proceeds is a material harm even if you ultimately win.
Our employment practice has handled non-compete disputes for executives at every level and company size. The most common mistake we see is executives making decisions about competitive employment based on what they believe the law is rather than what it is in their specific jurisdiction, with their specific agreement, in their specific circumstances. That analysis is what we do.