{2 minutes to read}  Are you a business owner and employer confused about the state of the law regarding non-competes in your state, or the United States? If so, you're not alone. This article will briefly summarize the state of the law and give you some ideas as to how you can comply with whatever law you're dealing with. 

Until last spring, the law relating to non-competes or the viability or legality of non-competes was really on a state-by-state basis. Depending on the state your company is in or even where your employees are, that could be the law that would govern whether a non-compete provision and employment or a separate non-compete agreement is legal or was legal. And each state was different, of course. Not only was each state different, but most states have case law that interprets the common law relating to these types of clauses, and some states also have their own statutes.

In April 2024 the Federal Trade Commission (FTC), which is a United States Agency — issued a rule, banning most non-competes nationwide. In July 2024, however, a Texas Federal court essentially struck down that law, taking us back to the place where we were before that FTC rule was put into effect. So, the state of the law for whatever state you're dealing with is going to carry the day.

I will say that beyond what we had existing before the FTC rule and now, there are a lot of states that have enacted their own statutes or statutory bans on non-compete clauses. It is important to check your state law and figure out whether there are statutes banning non-competes and what the state of the common law is.

The best way to do that is to speak to a lawyer.