You got the offer, and somewhere in the 30-page employment agreement, page 27, there are two paragraphs most people never read: a promise that for the next 12 or 24 months you will not work for, advise, or start a business that competes with your new employer.
That clause is a non-compete, and it is the most expensive sentence in most job offers that nobody prices in. It doesn’t reduce your paycheck. It caps how many employers you may legally work for, and that cap gets enforced with real lawyers and sometimes a lawsuit the week you start a new job.
The law changed dramatically in 2025 and 2026, and most workers have no idea which side they are on.
What a Non-Compete Does (and What It Doesn’t)
A non-compete is not a confidentiality agreement. Confidentiality stops you sharing trade secrets. A non-compete stops you doing the same job for somebody else, even if you never say a word.
Three details do all the work:
- Duration. Twelve months is the aggressive-but-normal ceiling. Eighteen to twenty-four is where enforcement costs real money.
- Scope and geography. “Any business that competes with us” is a different animal from “a company in the same industry within 25 miles.”
- The trigger. Your last day, your resignation, or termination for cause. Some clauses let the employer pick whether to enforce.
Also watch for forfeiture-for-competition language, where you lose bonus or unvested equity if you compete. It is a non-compete wearing a disguise.
The Federal Story in 2026: No Ban, But Not “Nothing”
The FTC tried to ban nearly all employee non-competes with a rule published in May 2024. A federal court in Texas blocked it nationwide on August 20, 2024, the FTC dropped its appeal on September 5, 2025, and the rule was removed on February 12, 2026. There is no nationwide ban today.
But the agency did not go home. It shifted to targeted enforcement under Section 5 of the FTC Act:
- Gateway Services, a pet cremation company. The FTC alleged the agreements covered nearly every employee and blocked competitive work nationwide for a year. The order to stop enforcing them was finalized in November 2025.
- Rollins, Inc., parent of Orkin. Announced April 15, 2026: terms that typically lasted two years, covered a 75-mile radius, paid nothing extra, and left almost no review time. A final consent order on June 22, 2026 requires Rollins to stop enforcing them.
Read the pattern: broad, non-negotiable, unpaid, long enough to hurt. That is the template the FTC is targeting, and the shape of the clause most workers sign.
Your State Does Most of the Work
With the federal rule gone, state law decides nearly everything, and the map has changed more in three years than in thirty.
California, Minnesota, North Dakota, and Oklahoma void employee non-competes outright, with narrow exceptions for people selling a business. Wyoming joined them July 1, 2025. California goes further: enforcing a void non-compete is illegal there even if you signed it elsewhere. Washington is heading the same way, with a 2025 law making all employment non-competes unenforceable on or after June 30, 2027.
Income thresholds decide it elsewhere: Illinois ($75,000, rising to $80,000 on January 1, 2027), Maryland (about $49,920 in 2026), Oregon (about $119,541 in 2026), Maine (400% of poverty), Rhode Island (250%), and the District of Columbia (about $162,164 in 2026). Below the line, the clause is void however reasonable it looks.
And a few states went the other way. Florida’s 2025 law creates a presumption of enforceability for high earners and requires seven days of advance review and written notice. Colorado voided most non-competes but added a $5,000-per-worker penalty for employers who enforce them anyway. Texas and New York still apply the common-law test: reasonable in time, geography, and scope, tied to something the employer actually owns.
The Six Things to Actually Read
- How many months? Anything past 12 needs a real justification.
- Where does it reach? “Anywhere” is a red flag. A specific radius or a named list of competitors is normal.
- Does it define “compete”? Broad definitions sweep in freelance or consulting work you did before the job.
- Does it cover your side projects? Look for carve-outs for pre-existing businesses, board seats, and passive investments.
- Is there forfeiture language? Bonus, commission, or equity you lose by competing.
- Is there garden leave? Some states, Massachusetts notably, let a non-compete stand only if the employer pays you to sit out, up to 12 months at half your base salary.
And check where it lives. It may sit in an appendix, or arrive separately as an “employee confidentiality agreement” after you already signed.
If You Already Signed One
The question is whether your state’s law makes it unenforceable, and how you find that out cheaply.
- Start with the easy answer. In California, Minnesota, North Dakota, Oklahoma, or below your state’s threshold, the clause is likely void. That is worth real money and costs nothing to check.
- Buy one hour of state-law advice. Many employment lawyers do flat-fee consultations. Bring the clause, your salary, your state, and title.
- Do not resign on the assumption that it is void. Void and unenforced are different. A demand letter costs your new employer time and money, and plenty of hiring managers decide it is not their fight.
- Look for fresh consideration. In several states a non-compete given without anything new in return, a raise, a promotion, a signing bonus, is unenforceable on its own. North Carolina and Washington both require consideration, which means you may be able to trade the clause for cash.
The Math Nobody Runs
A non-compete does not cost you your job. It costs you your option set. At a $90,000 salary, that is $7,500 a month in gross pay you cannot earn in your field. An 18-month nationwide clause blocks roughly $135,000 of in-field earnings, before you count consulting work or months of unemployment while you litigate.
Now compare that to what the clause bought you. Often, nothing. It gets bundled into an offer with no extra compensation attached, precisely the fact pattern the FTC is going after. If an employer wants the restriction, the negotiation is the clause or something real in return.
When Signing One Is Actually Fine
Non-competes are not always predatory, and pretending otherwise would make this advice useless. A few situations make a restriction legitimate: you are selling the business, where a broad non-compete is standard; you are a licensed professional in a state with specific rules; or you are an executive with real access to trade secrets and the clause is narrow.
One framing that is predictive: employers who write the harshest clauses are rarely the ones offering the most money. A blanket two-year, 75-mile restriction with forfeiture attached is a sign the company runs a high-turnover, low-margin operation.
Find the clause. Read page 27. Then price it like the decision it actually is.
Image: “Legal Contract & Signature – Warm Tones” by Blogtrepreneur, via Wikimedia Commons, licensed under CC BY 2.0.
