Is the FTC's non-compete ban in force in 2026?

No. It never took effect. A federal court in Texas set the rule aside in August 2024, the FTC voluntarily dropped its appeals in September 2025, and the agency formally deleted the rule from the Code of Federal Regulations effective February 12, 2026.

Does that mean my non-compete is enforceable?

It depends entirely on your state's law. Some states, including California, North Dakota, Oklahoma, and Minnesota, void most employee non-competes outright. Others enforce non-competes that are reasonable in time, geography, and scope. The federal rule's collapse did not change any state's law.

Can the FTC still go after my employer's non-compete?

Yes, on a case-by-case basis. The FTC has said it intends to keep using its general authority over unfair methods of competition to challenge specific non-competes it considers unlawful, even without a blanket nationwide rule.

Non-Compete Agreements, Explained

The FTC tried to ban most employee non-competes nationwide. A federal court stopped it, and the agency has since walked away from the fight. Here is where the law actually stands today, and why your state's rules are what matter.

A non-compete is a clause in an employment or business contract that restricts where someone can work, or what kind of work they can do, after they leave a job. For a few years, it looked like the federal government might wipe most of them out in one stroke. As of July 12, 2026, that has not happened, and the agency that tried has given up the fight. What governs non-competes today is largely the same patchwork of state law that governed them before the federal effort began.

What the FTC tried to do

In 2024, the Federal Trade Commission issued a rule that would have banned most non-compete agreements between employers and workers nationwide, relying on its authority under Section 5 of the FTC Act, 15 U.S.C. § 45, to police unfair methods of competition. Business groups sued immediately. In Ryan LLC v. FTC, a federal district court in Texas held, in an August 2024 summary judgment order, that the FTC had exceeded its statutory authority and had acted arbitrarily and capriciously under the Administrative Procedure Act. The court set the rule aside "with respect to all employers nationally." The rule never took effect anywhere in the country.

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Where things stand as of July 12, 2026

The FTC first appealed that ruling to the Fifth Circuit, and a similar challenge was pending in the Eleventh Circuit. That changed on September 5, 2025, when the Commission voted 3 to 1 to dismiss its own appeals in both cases and to accede to the vacatur of the rule. Put simply, the agency chose to stop defending its own regulation rather than keep fighting for it. The story did not end there procedurally: effective February 12, 2026, the FTC published a formal action removing the vacated rule's text, 16 C.F.R. Part 910, from the Code of Federal Regulations entirely, describing the move as conforming its rules to the court's decision.

Put together, that is a settled outcome at the agency level. As of this writing, there is no pending appeal and no live federal non-compete rule on the books. A future FTC could try a narrower rulemaking, and the current Commission has said it will still pursue individual non-competes on a case-by-case basis under its general unfair-competition authority, including a 2025 enforcement action against a pet-cremation company and warning letters sent to healthcare employers. But there is no blanket federal ban, and describing one as currently in force, or as still on appeal, would be wrong as of mid-2025 and into 2026.

Why state law is doing the real work

Federal litigation over the FTC rule never touched state law, and it did not need to. Non-compete enforceability has always been primarily a state-law question, and states differ sharply. California's Business and Professions Code § 16600 makes void, to that extent, "every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind." California courts have read that language broadly: in Edwards v. Arthur Andersen LLP, the California Supreme Court held the statute bars virtually all employee non-competes, rejecting a narrow-restraint exception some lower courts had recognized. North Dakota, Oklahoma, and Minnesota take a similarly broad anti-non-compete stance for employees.

Most other states take a different approach: they will enforce a non-compete if it is reasonable, typically judged by its duration, geographic scope, and the legitimate business interest it protects, such as trade secrets or client relationships. What counts as reasonable varies by state and often by industry, and courts in these states will frequently narrow an overbroad clause rather than throw it out entirely.

The practical upshot for anyone signing, or trying to enforce, a non-compete in 2026 is the same advice that applied before the FTC ever acted: the controlling question is not federal law, it is which state's law applies to the contract, and what that state's courts and legislature have said about restraints on trade. The federal rule's rise and fall brought a few eventful years of legal uncertainty, but it left the underlying, state-by-state rules unchanged.