There is no federal FTC noncompete ban in effect. The 2024 rule was blocked, and the FTC dropped its Fifth Circuit appeal on September 5, 2025. Instead, the FTC is enforcing noncompetes case by case. On April 15, 2026, it ordered pest control firm Rollins, Inc. to stop enforcing noncompetes against more than 18,000 employees. At the state level, Virginia's expanded ban on noncompetes for low wage and healthcare workers, as well as workers fired without cause, took effect in July 2026. All restrictive covenants, including nondisclosure and nonsolicitation agreements, require state specific review.
Home › Founders News › Regulations
FTC pivots to case-by-case noncompete enforcement; states pass their own bans
Why this matters for founders
If you're drafting employment or contractor agreements, don't rely on a blanket noncompete, enforceability now hinges on your state's law, and overbroad clauses can invite FTC scrutiny even without a federal rule. When you hire, check the specific state rules (Virginia, California, Minnesota, etc.) before including restrictive covenants, and lean on NDAs and non-solicitation clauses that hold up more reliably.
Source: Foley & Lardner
Related updates
More that helps you.
Tennessee bans noncompetes for workers earning under $70,000 from July 1, 2026
A new Tennessee law effective July 1, 2026 voids noncompete agreements for employees who earn less than $70,000 per year. It joins a broader 2026 wave of state limits on low-wage n…
Maine requires pay ranges in job postings starting July 29, 2026
Maine's pay-transparency law takes effect July 29, 2026, requiring employers to include a good-faith range of pay in job postings. Separately, Maine set its 2026 paid family and me…
Virginia now requires pay ranges in all job postings as of July 1, 2026
Effective July 1, 2026, Virginia requires all employers — with no minimum employee count — to include a good-faith wage or salary range in every job posting. The same law expanded…
Virginia SB170 restricts noncompetes for terminated staff from July 1, 2026
Virginia's SB170, effective July 1, 2026, bars enforcing a noncompete against an employee fired without cause unless the employer pays severance or other monetary consideration tha…
Get briefs like this tuned to you.
In the app, Founder Briefs are personalized to your country, industry and stage, and you can save the ones that matter.
See plans →
Keep exploring
Related across the site
ChecklistHire your first employee the legal wayEverything a first-time employer needs, in order: classification, registration, workers' comp, payroll, and a first week that sets your new hire up to succeed.ToolDocuSignDocuSign lets you send documents for legally binding electronic signature and track their status. It handles contracts, NDAs, offer letters, and other agreements with an audit trail.TermEIN (Employer Identification Number)A unique nine-digit number the US IRS assigns to your business for tax and identification purposes, like a Social Security number for your company.GuideEmployee or contractor: classify rightWorker classification drives payroll taxes, benefits, and legal risk. Learn the IRS control tests so your first hire does not turn into an expensive misclassification case.GuideGet new hire paperwork done rightForm I-9, Form W-4, and the state new hire report are mandatory for your first employee. Here is what to collect, the deadlines that apply, and how to store it all.GuideHang required labor law posters rightFederal and state labor law posters are mandatory once you hire, and all of them are free from the government. What to hang, where to hang it, and which mailers to ignore.