A business owner who sells out or leaves a partnership can generally still agree not to compete, even in the handful of states that ban non-competes for employees. Five jurisdictions void employee non-competes outright as of October 2026 (California, Minnesota, North Dakota, Oklahoma and Wyoming), and all five write an exception for the sale of a business into the same statute that does the voiding.
That is the pattern the table below records for all 50 states and the District of Columbia. Thirteen more jurisdictions restrict non-competes for workers by pay or wage basis, and most of those statutes say in terms that they do not reach an owner selling an interest. The law that governs a partner's covenant is therefore usually older and plainer than the employment rules in the news: a sale-of-goodwill or partnership-dissolution section, some of them in force since before 1915, or a court's reasonableness test applied more gently than it is to employees.
The table is a map, not a ruling. It is general information as of 1 October 2026; a lawyer in the state should read the actual covenant against the statute before anyone relies on it.
How to read the table
Each row gives the state's general rule for employee non-competes (the column headed "Employee non-competes"), then the two questions an owner actually has:
- Selling a business: whether a statute lets the seller of a business, its goodwill, or an ownership interest agree not to compete with the buyer, and on what terms.
- Partner or member leaving: whether a statute covers partners (and, in some states, LLC members or shareholders) agreeing not to compete when the business dissolves or one of them leaves.
"No statute" means the state has no section on the point and courts apply the common law. Where no source we could verify says how a state's courts treat a seller's or partner's covenant, the cell says "Unclear: check" rather than guessing. Confidence is high where the statute or the controlling opinion was read, medium where the row rests on a reliable secondary source (mainly Beck Reed Riden's 50-state survey chart, July 2026 edition), and low for one secondary source. Every row links its source and was checked on 1 October 2026; 12 rows were re-read against the statute a second time, which found and fixed one error (California's partner section). The full dataset, with second sources and the method, is kept with the page.
Search the table by state name. The status labels are about employees: Banned (with exceptions) means non-competes are void except as the statute lists; Restricted means a statute voids them for a large class of workers by pay or wage basis; Enforced (statute) means a statute sets the test; Enforced (reasonableness) means courts apply the common law.
Non-compete laws by state for business owners (as of 1 October 2026)
| State | Employee non-competes | General rule | Selling a business | Partner or member leaving | Notable limits | Changes 2023-2026 | Confidence | Source | Checked |
|---|---|---|---|---|---|---|---|---|---|
| Alabama | Enforced (statute) | Contracts restraining a lawful profession, trade or business are void except as the statute allows (Ala. Code §8-1-190(a)); an employee or agent may agree not to compete in a specified area, or not to solicit customers, to protect a protectable interest (§8-1-190(b)). | Yes: §8-1-190(b)(3), one who sells the goodwill of a business may agree with the buyer not to carry on a similar business or solicit its customers within a specified area so long as the buyer (or a successor to the goodwill) carries on a like business there, subject to reasonable time and place limits; restraints of one year or less are presumed reasonable. | Yes: §8-1-190(b)(6), upon or in anticipation of dissolution of a commercial entity, partners, owners or members may agree that none of them will carry on a similar commercial activity in the area where the business was transacted. | Employee non-competes: two years or less presumed reasonable; customer non-solicits 18 months (or as long as post-separation consideration is paid) presumed reasonable. Must be written and signed and protect a protectable interest (trade secrets, confidential information, customer relationships and goodwill, specialized training). Courts have excluded professionals (physicians, accountants and others) based on pre-2016 case law. The seller presumption (one year) is shorter than the employee one (two years). | high | source | 2026-10-01 | |
| Alaska | Enforced (reasonableness) | No general statute; courts apply common-law reasonableness and may reform an overbroad covenant drafted in good faith (Data Management, Inc. v. Greene, 757 P.2d 62 (Alaska 1988)). | No statute; courts apply common-law reasonableness to covenants in a sale of a business or practice (the Alaska Supreme Court reviewed a dental-practice sale covenant in Dominic Wenzell, DMD PC v. Ingrim (2010)). Whether Alaska applies a more lenient standard than for employees: Unclear: check. | No specific statute; owner and partner covenants are judged under the general reasonableness rule. | No statutory duration presumptions, income thresholds or notice rules. Courts weigh time and area, access to confidential information, whether the restraint stops only unfair competition, and hardship to the person restrained. | medium | source | 2026-10-01 | |
| Arizona | Enforced (reasonableness) | No general statute; courts enforce a covenant only if it is no broader than needed to protect a legitimate interest and not contrary to public policy, and they construe physician covenants strictly (Valley Medical Specialists v. Farber, 194 Ariz. 363, 982 P.2d 1277 (1999)). | No statute; courts enforce reasonable sale-of-business covenants (more leniently than employee ones, to protect the goodwill the buyer paid for). | No specific statute; owner covenants are judged under the general reasonableness rule. | Non-competes banned for broadcast employees (A.R.S. §23-494). Courts may blue-pencil but will not rewrite. Attorneys' fees may be awarded to the prevailing party in contract actions; venue is generally the defendant's county of residence (A.R.S. §12-401). | None enacted. A 2025 general ban bill (HB 2589) was introduced but not enacted, as far as could be found. | medium | source | 2026-10-01 |
| Arkansas | Enforced (statute) | A non-compete ancillary to employment is enforceable if the employer has a protectable business interest and the covenant is limited in time and scope to no more than that interest needs (Ark. Code §4-75-101(a)). | Statute does not apply: §4-75-101(h) excludes covenants ancillary to the sale and purchase of a business (and franchise and other non-employment agreements), and existing common-law standards govern them. | No specific statute; §4-75-101(h) leaves any covenant not ancillary to employment (owner, partner or member covenants included) to common law. | Employee rules only: two-year restriction presumed reasonable (§4-75-101(d)); no geographic limit needed if time and scope are limited ((c)); courts must reform an overbroad covenant ((f)); continued employment is enough consideration ((g)). Does not apply to holders of professional licenses under Title 17, Subtitle 3 (medical professions) ((j)(2)). Physician non-competes void since Act 232 of 2025. | Act 232 of 2025 (SB 139): non-competes restricting a physician's practice are void, effective 5 Aug 2025 (applies to physician employment agreements; sale-of-practice covenants unaffected per secondary sources). | high | source | 2026-10-01 |
| California | Banned (with exceptions) | Every contract restraining anyone from a lawful profession, trade or business is void except as the chapter provides (Bus. & Prof. Code §16600); it is unlawful to include one in an employment contract (§16600.1), and a void one is unenforceable wherever and whenever signed (§16600.5). | Yes: §16601, a seller of the goodwill of a business, or an owner selling all of their ownership interest (or an owner of an entity selling all or substantially all its operating assets with goodwill, a division or subsidiary's assets with goodwill, or all interest in a subsidiary), may agree with the buyer not to carry on a similar business within a specified area where the business was carried on, so long as the buyer carries on a like business there. | Yes: §16602, a partner may, upon or in anticipation of dissolution of the partnership or the partner's dissociation, agree not to carry on a similar business within a specified area where the partnership did business (so long as another partner, or whoever took the goodwill, carries on a like business there). §16602.5 gives an LLC member the same on dissolution of the LLC or termination of the member's interest. A partner selling all of an ownership interest is covered by §16601. | The exceptions are for owners and sellers; there is no employee exception and no income threshold. Covered by the 2024 laws: employers had to notify current and former employees (employed after 1 Jan 2022) by 14 Feb 2024 that void clauses are void; employees have a private right of action with injunctions, damages and attorneys' fees. Labor Code §925 bars making a California employee agree to another state's law or forum as a condition of employment. | SB 699 (§16600.5) and AB 1076 (§16600 amended, §16600.1) effective 1 Jan 2024. AB 692 effective 1 Jan 2026 (Bus. & Prof. Code §16608, Labor Code §926): bans most stay-or-pay repayment terms in employment contracts entered on or after 1 Jan 2026. | high | source | 2026-10-01 |
| Colorado | Restricted | Non-competes are void unless an exception applies (Colo. Rev. Stat. §8-2-113(2)); for agreements from 10 Aug 2022 a worker non-compete is allowed only for a highly compensated worker and only to protect trade secrets, no broader than reasonably necessary. | Yes: §8-2-113(3)(c), a covenant not to compete related to the purchase and sale of a business, a direct or indirect ownership share in a business, or all or substantially all of its assets, restricting an owner of an interest in the business. Since 6 Aug 2025, for a minority owner who got the stake as equity compensation or for services, the covenant may last no more years than (total sale consideration) divided by (average annual cash compensation from the business, including ownership income, over the prior two years or the affiliation period if shorter). | No general dissolution exception; a departing owner who sells their interest is covered by §8-2-113(3)(c). Physicians: a non-compete in an employment, partnership or corporate agreement between physicians is void (§8-2-113(5)(a)), though damages provisions remain enforceable. | Highly compensated threshold 2026: $130,014 annualized cash compensation, at signing and at enforcement (customer non-solicits: 60%, $78,008.40). Separate written notice required before acceptance of an offer, or 14 days before for current workers. Colorado law and venue for workers who primarily live or work in Colorado. Penalty $5,000 per worker plus damages and attorneys' fees. Since 6 Aug 2025 the highly compensated exemption does not cover non-competes restricting the practice of medicine (including physician assistants), advanced practice registered nursing or dentistry. | HB 22-1317, effective 10 Aug 2022 (the threshold regime). SB 25-083, effective 6 Aug 2025: health-care provider limits and the minority-owner duration formula, for covenants entered or renewed on or after that date. | high | source | 2026-10-01 |
| Connecticut | Enforced (reasonableness) | No general statute; courts apply common-law reasonableness, weighing duration, geographic area, fairness of the protection to the employer, the restraint on the employee, and the effect on the public. | No statute; courts enforce reasonable sale-of-business covenants (more leniently than employee ones). | No general statute. Physicians: Conn. Gen. Stat. §20-14p covers covenants in any contract creating a professional relationship with a physician (partnership included). They must be reasonable and are capped at one year and 15 miles from the primary practice site. The rule that a covenant falls when the employer ends the relationship without cause does not apply where the contract was made in anticipation of, or as part of, a partnership or ownership agreement. | Physicians: §20-14p (covenants from 1 Jul 2016: max one year, 15 miles, separately signed; since 1 Oct 2023 also unenforceable if the physician rejects a material pay change at renewal and the employer then ends the relationship, except in physician-owned groups of 35 or fewer). Statutory limits also cover broadcasters, security guards, homemaker/companion/home health workers, and APRNs and physician assistants. | P.A. 23-97 amended §20-14p (effective 1 Jul 2023; new rule for covenants on or after 1 Oct 2023). HB 5492 (2026), a general limits bill, was reported out of committee but never got a floor vote (last action 2 Apr 2026), so it is NOT law. | medium | source | 2026-10-01 |
| Delaware | Enforced (reasonableness) | No general statute; courts enforce covenants that are reasonable in time and area, protect a legitimate economic interest, and survive a balancing of the equities. | No statute; courts enforce reasonable sale-of-business covenants (more leniently than employee ones). | No general statute. Physicians: 6 Del. C. §2707 voids any non-compete in an employment, partnership or corporate agreement between or among physicians restricting practice on termination of the agreement (damages provisions, including competition-related damages, stay enforceable). | Physician non-competes void (§2707). Parties may choose Delaware law for contracts of $100,000 or more (§2708). Courts can reform an overbroad covenant, but some recent cases suggest they are unlikely to (Beck Reed Riden). | medium | source | 2026-10-01 | |
| District of Columbia | Restricted | Employers may not have a non-compete with a covered employee, meaning one below the highly compensated threshold who works mainly in D.C. (D.C. Code §§32-581.01 to 32-581.05). For highly compensated employees they are allowed only in writing with stated scope, area and duration limits; outside the Act, common-law reasonableness applies. | Yes: §32-581.01(15)(A), a provision in (or signed at the same time as) an agreement between the seller of a business and its buyers, in which the seller agrees not to compete with the buyer's business, is not a non-compete provision under the Act. | No specific statute; the Act governs employees, so owner and partner covenants outside an employment relationship fall under common-law reasonableness. | 2026 thresholds (from 1 Jan 2026): $162,164; medical specialists $270,274 (indexed each year). For highly compensated employees: written functional scope and area, max 365 days after separation (730 for medical specialists), given at least 14 days before work starts or before signing, with the required notice. Excludes confidentiality provisions and long-term incentives. Penalties for violations; anti-retaliation rules. | Non-Compete Clarification Amendment Act of 2022, effective 1 Oct 2022 (replaced the 2020 near-total ban; not retroactive). Thresholds indexed annually from 2024. | high | source | 2026-10-01 |
| Florida | Enforced (statute) | Restrictive covenants are enforceable if written and signed, reasonable in time, area and line of business, and reasonably necessary to protect a legitimate business interest; courts must modify an overbroad one rather than void it (Fla. Stat. §542.335(1)). | Yes: §542.335(1)(d)3, against a seller of all or part of the assets of a business or professional practice, corporate shares, a partnership interest, an LLC membership or any other equity interest, a restraint of 3 years or less is presumed reasonable and over 7 years presumed unreasonable (rebuttable). | No separate dissolution statute; a covenant tied to the sale of a partnership interest or LLC membership gets the seller presumptions in §542.335(1)(d)3 (3 years reasonable, over 7 unreasonable). | Employees (not tied to a sale): 6 months or less presumed reasonable, over 2 years presumed unreasonable; distributors, franchisees and licensees: 1 and 3 years; covenants protecting trade secrets: 5 and 10 years. Courts may not consider hardship to the person restrained (§542.335(1)(g)1). Prevailing-party attorneys' fees (§542.335(1)(k)). CHOICE Act (§§542.41-542.45) for covered employees earning more than twice the annual mean wage of the county: non-competes up to 4 years, enforceable with a mandatory preliminary injunction, if the employee had 7 days' notice, was told in writing of the right to counsel, and acknowledged receiving confidential information or customer relationships. Health care practitioners are excluded from the CHOICE Act. Physician specialists are protected where they are the only provider in a county (§542.336). | CHOICE Act (ch. 2025-213, HB 1219), §§542.41-542.45, effective 1 Jul 2025. | high | source | 2026-10-01 |
| Georgia | Enforced (statute) | The Restrictive Covenants Act (O.C.G.A. §§13-8-50 to 13-8-59, contracts from 11 May 2011) enforces covenants reasonable in time, area and scope that protect legitimate business interests. Post-employment non-competes are allowed only against employees who regularly solicit customers, make sales, manage with hire/fire authority, or are key employees or professionals (§13-8-53(a)). | Yes: §13-8-57(d), against the owner or seller of all or a material part of a business's assets, corporate shares, a partnership interest, an LLC membership or other equity interest, a restraint is presumed reasonable up to the longer of 5 years or the period of sale payments, measured from termination or disposition of the interest. Sellers and purchasers of a business are among the relationships the Act covers (§13-8-52(a)). | Yes: the Act covers partnerships and partners (§13-8-52(a)), and §13-8-57(d) gives the same 5-year (or payout period) presumption for an owner of a partnership interest or LLC membership, measured from termination or disposition of the interest. | Employees: 2 years or less presumed reasonable, over 2 presumed unreasonable (§13-8-57(b)); distributors, dealers, franchisees and licensees: 3 years ((c)). Courts may modify (blue-pencil) an overbroad covenant. The employee-category limits in §13-8-53(a) speak to employees, not to owners or sellers. Agreements before 11 May 2011 fall under the older, stricter law. | high | source | 2026-10-01 | |
| Hawaii | Enforced (statute) | Contracts in restraint of trade are unlawful (Haw. Rev. Stat. §480-4(a)), but §480-4(c) permits listed covenants that do not substantially lessen competition. Courts enforce employee covenants that protect a legitimate business interest and are reasonable. | Yes: §480-4(c)(1), a covenant by the transferor of a business not to compete within a reasonable area and for a reasonable time in connection with the sale of the business (if its effect is not to substantially lessen competition or tend to create a monopoly). | Yes: §480-4(c)(2), a covenant between partners not to compete with the partnership within a reasonable area and for a reasonable time upon a partner's withdrawal from the partnership. The statute does not mention LLC members. | Non-compete and non-solicit clauses are void for employees of a technology business (§480-4(d), since 1 Jan 2015; trade-secret covenants still allowed). Courts can award attorneys' fees to prevailing employees (Beck Reed Riden). No statutory duration presumptions or income thresholds. | high | source | 2026-10-01 | |
| Idaho | Enforced (statute) | A key employee or key independent contractor may agree not to compete after employment if the covenant is reasonable as to duration, area and line of business and no broader than needed to protect the employer's legitimate business interests (Idaho Code §44-2701); courts must modify an unreasonable covenant (§44-2703). | No statute (chapter 27 covers key employees and key contractors only); sale-of-business covenants fall under common-law reasonableness. Whether courts apply a more lenient standard: Unclear: check. | No specific statute; owner and partner covenants are judged under the general reasonableness rule. | Rebuttable presumptions (§44-2704): 18 months or less is reasonable; area limited to where the key employee worked or had influence; line of business limited to what they did; the top 5% of earners are presumed key employees. A restriction over 18 months needs consideration beyond employment. Prevailing-party attorneys' fees available (Beck Reed Riden). These rules are written for employees and contractors, not owners or sellers. | high | source | 2026-10-01 | |
| Illinois | Restricted | Enforceable only if the employee gets adequate consideration, the covenant is ancillary to employment, no greater than needed to protect a legitimate business interest, not an undue hardship and not injurious to the public; void for employees earning $75,000 or less (Illinois Freedom to Work Act, 820 ILCS 90/10 and 90/15). | Excluded from the Act: "covenant not to compete" does not include a covenant entered into by a person purchasing or selling the goodwill of a business or otherwise acquiring or disposing of an ownership interest (820 ILCS 90/5), so the Act's wage floor, notice and consideration rules do not apply; common-law reasonableness governs. | No specific statute on partnership dissolution or member withdrawal; a covenant given when a partner or member disposes of an ownership interest falls within the 820 ILCS 90/5 exclusion above. The construction-worker exemption also does not reach employees who are shareholders, partners or owners of the employer. | Noncompetes void at $75,000 or less in earnings (rising to $80,000 on 1 Jan 2027, $85,000 in 2032, $90,000 in 2037); non-solicits void at $45,000 or less (rising to $47,500 in 2027). Employee must be advised in writing to consult a lawyer and given at least 14 calendar days to review. Adequate consideration: 2 years of employment after signing, or other professional or financial benefits. Not enforceable against employees laid off for COVID-19 reasons unless paid base salary. Exempt: construction workers (most), public-sector bargaining units, broadcasters, government contractors. Prevailing employee recovers attorney fees; Attorney General may fine $5,000 per employee ($10,000 repeat). Courts may reform. | P.A. 103-0915, effective 1 Jan 2025: noncompetes and non-solicits not enforceable against licensed mental health professionals serving veterans and first responders where enforcement would raise cost or difficulty. P.A. 104-0320 (Workplace Transparency Act amendments), effective 1 Jan 2026: unilateral employment conditions may not apply non-Illinois law or require a non-Illinois venue for an Illinois employee's claims. No change to the 2026 dollar thresholds. | medium | source | 2026-10-01 |
| Indiana | Enforced (reasonableness) | No general statute; courts apply common-law reasonableness (reasonably necessary to protect trade secrets, confidential information or goodwill, reasonable in time, area and scope, not against public policy). Physician noncompetes are governed by Ind. Code §25-22.5-5.5. | Unclear: check. No general statute found. For physicians only, the 2025 hospital ban (Ind. Code §25-22.5-5.5, SEA 475) excepts a noncompete made in a bona fide sale of a business entity in which the physician owns more than 50%. | No specific statute | Physician noncompetes signed on or after 1 July 2020 must offer a buyout and address patient notice and records. Noncompetes with primary care physicians unenforceable for agreements on or after 1 July 2023. Noncompetes between any physician and a hospital, hospital parent or affiliated manager prohibited for agreements on or after 1 July 2025 (non-solicits up to one year still allowed). Indiana courts blue-pencil but do not rewrite. | SEA 475 (2025), effective 1 July 2025: bans physician noncompetes with hospitals and hospital systems, except in a sale of a business where the physician owns more than 50%. 2026 bills (SB 132, a $150,000 wage floor; HB 1054, plumbers) did not pass. | medium | source | 2026-10-01 |
| Iowa | Enforced (reasonableness) | No general statute; courts apply common-law reasonableness (reasonably necessary to protect the employer's business, not unreasonably restrictive of the employee in time and area, not prejudicial to the public). Health care employment agencies may not put a noncompete in agency worker contracts (Iowa Code §135Q.2(3)). | Unclear: check | No specific statute | Health care employment agency workers protected by §135Q.2 (since 1 July 2022). Franchisees protected where the franchisor does not renew. Courts may reform an overbroad covenant. | HF 2254 (2026), effective 2 June 2026: University of Iowa Health Care may not use noncompetes for its physicians, physician assistants, nurse practitioners, registered and licensed practical nurses and pharmacists. | medium | source | 2026-10-01 |
| Kansas | Enforced (reasonableness) | No statute on noncompetes (the Kansas Restraint of Trade Act expressly does not apply to covenants not to compete, K.S.A. 50-163(e)); courts apply common-law reasonableness: a legitimate business interest, no undue burden on the employee, not injurious to the public, reasonable in time and area. | No statute; courts enforce reasonable sale-of-business covenants (more leniently than employee ones). Kansas courts scrutinise employment noncompetes more strictly than those in a sale of a business (H & R Block, Inc. v. Lovelace (Kan. 1972)). | No noncompete statute. For non-solicits, K.S.A. 50-163(c)(2) makes an owner's written covenant not to solicit or interfere with the entity's employees or owners conclusively presumed enforceable if it runs no more than four years after the owner's business relationship ends; an owner's customer non-solicit limited to material-contact customers gets the same four-year presumption. | Employee non-solicits of employees and of material-contact customers presumed enforceable up to two years after employment (K.S.A. 50-163(c)). Courts must modify an overbroad covenant and enforce it as modified (K.S.A. 50-163(b)). Accountants have limited protection. | SB 241 (L. 2025, ch. 74), effective 1 July 2025: added the owner and employee non-solicitation presumptions and mandatory reformation to K.S.A. 50-163; it does not cover noncompetes. | medium | source | 2026-10-01 |
| Kentucky | Enforced (reasonableness) | No general statute; courts apply common-law reasonableness (reasonable in time, area and scope, no undue hardship, consistent with the public interest). KRS 216.724 bars noncompetes for temporary direct-care staff of health care services agencies. | No statute; sources say Kentucky applies the same reasonableness framework to sale-of-business covenants but in practice has been more permissive in enforcing them. | No specific statute | Continued employment alone may not be enough consideration (Beck Reed Riden: only if the employment is altered in some way). Health care services agency temporary direct-care staff exempt (KRS 216.724, from 14 July 2022, narrowed 22 March 2023). Courts may reform. | low | source | 2026-10-01 | |
| Louisiana | Enforced (statute) | Every agreement restraining anyone from a lawful profession, trade or business is null except as the statute allows (La. R.S. 23:921(A)(1)); an employee may agree not to compete or solicit customers within specified parishes or municipalities for up to two years after employment ends (23:921(C)). | La. R.S. 23:921(B): a seller of a business's goodwill (and any shareholder, partner or member of the seller) may agree not to compete or solicit customers within specified parishes or municipalities, so long as the buyer carries on a like business there, for up to two years from the sale. | La. R.S. 23:921(E): on or in anticipation of dissolution, a partnership and its partners may agree that partners will not carry on a similar business in specified parishes or municipalities where the partnership did business, for up to two years from dissolution. 23:921(J), (K) and (L) let a corporation and its shareholders, a partnership and its partners, and an LLC and its members agree to the same restraint for up to two years after the person ceases to be a shareholder, partner or member. | Two-year cap in every case; the parishes or municipalities must be named; strict compliance with the statute. Out-of-state choice of law or forum is invalid for employees unless agreed after the dispute arises. Physicians (contracts from 1 Jan 2025): primary care physician noncompetes end three years after the initial contract and other physicians' after five, limited to the practice parish and up to two contiguous parishes for up to two years; rural hospital and FQHC physicians excluded (23:921(M), (N)). Automobile salesmen and real estate licensees have special rules. | Acts 2024, No. 273, effective 1 Jan 2025 (physician limits above). Beck Reed Riden's July 2026 chart also lists interns and apprentices as exempt effective 1 Aug 2026; not yet in the official statute text. | high | source | 2026-10-01 |
| Maine | Restricted | Noncompetes are contrary to public policy and enforceable only to the extent reasonable and no broader than necessary to protect trade secrets, confidential information or goodwill; banned for employees earning at or below 400% of the federal poverty level (26 M.R.S. §599-A). | No statute; §599-A covers only employer-employee noncompetes. How Maine courts treat sale-of-business covenants: Unclear: check. | No specific statute. Under §599-A(3) the veterinarian and health care practitioner bans apply only where the employee has no ownership interest in the employer, so owners in those fields may still agree to noncompetes. | Wage floor 400% of the federal poverty level ($63,840 in 2026). Notice before the job offer that a noncompete will be required, and a copy at least 3 business days before signing. Not effective until one year of employment or six months after signing, whichever is later (except physicians and, from July 2026, health care practitioners). Fine of at least $5,000 for violating the wage floor or notice rules. Banned for veterinarians without an ownership interest (PL 2023, c. 118). | PL 2026, c. 718 (LD 2200), approved 15 April 2026, effective July 2026 for agreements entered into or renewed after that: bans noncompetes for licensed health care practitioners who have no ownership interest in the employer; any enforceable health care noncompete must recognize the patient's right to choose a practitioner. PL 2023, c. 118 added the veterinarian ban (with retroactive effect). | high | source | 2026-10-01 |
| Maryland | Restricted | Noncompetes are void for employees earning 150% of the state minimum wage or less, for licensed veterinarians and vet techs, for licensed direct-patient-care health workers earning $350,000 or less, and for certain architects (Md. Code, Lab. & Empl. §3-716); otherwise courts apply common-law reasonableness. | No statute; §3-716 applies only to employment contracts. How Maryland courts treat sale-of-business covenants: Unclear: check. | No specific statute | Wage floor: 150% of the state minimum wage of $15.00 (§3-413), i.e. $22.50 an hour (about $46,800 a year). Health care providers earning over $350,000: noncompete may last at most 1 year and reach at most 10 miles from the primary place of employment, and patients may ask where the provider went. Architects: void where the employer had over 30 mostly Maryland employees at hire but is not Maryland-based on the enforcement date. Client and patient list protections are not affected. | Veterinarians and vet techs added effective 1 June 2024. Health care provider rules effective 1 July 2025. Architect provision effective 1 Oct 2026. | high | source | 2026-10-01 |
| Massachusetts | Restricted | Employee noncompetes signed on or after 1 Oct 2018 must meet the Noncompetition Agreement Act (Mass. Gen. Laws c. 149, §24L): signed writing, notice, a stated right to counsel, garden leave or other agreed consideration, no longer than 12 months, and no broader than needed to protect trade secrets, confidential information or goodwill. | Excluded from §24L: the Act does not cover noncompetes made in connection with the sale of a business entity or substantially all its operating assets, or the disposal of an ownership interest, when the restricted party is a significant owner, member or partner who receives significant consideration from the sale (§24L(a), exclusion (iii)). Common-law reasonableness governs these. | Same exclusion (iii) covers disposing of the ownership interest of a partnership or business entity by a significant partner or member receiving significant consideration; exclusion (iv) also removes noncompetes made outside an employment relationship. No separate dissolution statute. | 12-month maximum (2 years if the employee breached a fiduciary duty or took employer property). Garden leave of at least 50% of the highest annualized base salary in the prior 2 years, or other agreed consideration. Notice: with a formal offer or 10 business days before starting; for existing employees, 10 business days plus fresh consideration. Not enforceable against FLSA non-exempt employees, student interns, those 18 or younger, or employees terminated without cause or laid off. Separate statutes bar noncompetes for physicians, nurses, psychologists, social workers and broadcasters. The Act does not apply to these business-owner covenants. | high | source | 2026-10-01 | |
| Michigan | Enforced (statute) | An employer may obtain a covenant protecting its reasonable competitive business interests if it is reasonable in duration, area and type of employment or line of business; courts may limit an unreasonable one (Mich. Comp. Laws §445.774a). | Unclear: check. §445.774a addresses only employer-employee covenants; see Bristol Window & Door, Inc. v. Hoogenstyn, 250 Mich. App. 478 (2002) on covenants outside that relationship. | No specific statute | Reasonableness only: no wage threshold, no notice rule, no profession bans. Courts reform rather than void. Applies to covenants entered into after 29 March 1985. | high | source | 2026-10-01 | |
| Minnesota | Banned (with exceptions) | Any covenant not to compete is void and unenforceable for agreements entered into on or after 1 July 2023, including with independent contractors (Minn. Stat. §181.988, subd. 2(a)). | Minn. Stat. §181.988, subd. 2(b)(1): a covenant agreed during the sale of a business is valid; the seller and the selling partners, members or shareholders may agree with the buyer not to carry on a similar business within a reasonable area for a reasonable time. | Minn. Stat. §181.988, subd. 2(b)(2): upon or in anticipation of dissolution of a partnership, LLC or corporation, the partners, members or shareholders may agree that any of them will not carry on a similar business within a reasonable area where the business was transacted. The text names dissolution, not a single member's withdrawal. | Non-solicitation and nondisclosure agreements are not covered by the ban. An employer may not require a Minnesota-based employee to litigate outside Minnesota or give up Minnesota law (subd. 3). Employee may recover attorney fees. Agreements signed before 1 July 2023 are judged under prior common law. | Enacted 2023 (Minn. Laws 2023, c. 53, art. 6, §1), effective for agreements on or after 1 July 2023. 2024 Minn. Laws c. 110 added §181.9881, voiding contract terms that stop a service provider's customers from soliciting or hiring its employees. | high | source | 2026-10-01 |
| Mississippi | Enforced (reasonableness) | No general statute; courts apply common-law reasonableness, mainly in time and area, weighing the hardship to employer and employee and the public interest. | Unclear: check | No specific statute | No wage threshold, notice rule or profession bans. Courts may reform. Enforceable against an employee terminated without cause unless the termination was in bad faith or arbitrary. | medium | source | 2026-10-01 | |
| Missouri | Enforced (reasonableness) | No general noncompete statute; courts apply common-law reasonableness (must protect trade secrets or customer contacts and be reasonable in time and area). Mo. Rev. Stat. §431.202 covers only employee non-solicitation and says it does not affect noncompetes. | Unclear: check. §431.202.1(1) separately validates reasonable no-hire / non-solicit covenants between businesses negotiating an acquisition, to keep the workforce stable. | No specific statute | Employee non-solicits of employees presumed reasonable up to one year after employment (§431.202.2) and cannot bind secretarial or clerical staff under §431.202.1(4). Courts may reform. | medium | source | 2026-10-01 | |
| Montana | Enforced (statute) | Mont. Code Ann. §28-2-703 voids any contract restraining a lawful profession, trade or business except as allowed by §§28-2-704 and 28-2-705; courts read it to allow partial restraints that are limited in time or place, supported by consideration and reasonable (Wrigg v. Junkermier, Clark, Campanella, Stevens, P.C. (Mont. 2011), holding a noncompete unenforceable against an employee fired without cause). | Yes: Mont. Code Ann. §28-2-704 lets a seller of a business's goodwill agree not to carry on a similar business, but only within the city or county of the principal office, a city in or an adjacent county, or a combination of those, and only while the buyer (or a successor to the goodwill) carries on a like business there. §28-2-724 (health care) does not apply to a contract for the sale and purchase of a practice. | Yes: Mont. Code Ann. §28-2-705 lets partners, upon dissolution of the partnership, agree that one or more of them will not carry on a similar business within the areas listed in §28-2-704(2). The statute names partners only, not LLC members. | Geography for sale and partner covenants is capped at the listed city/county areas. Mont. Code Ann. §28-2-724 bars restrictions on health care providers' right to practice or treat/solicit patients after an employment, partnership or other professional relationship ends (physicians, psychologists, naturopathic physicians, social workers, counselors, marriage and family therapists, registered nurses, APRNs and others). Not enforceable against an employee terminated without cause (Wrigg). | HB 198 (signed 16 Apr 2025) extended the health care ban to naturopathic physicians, registered nurses, APRNs and physician assistants; HB 620 (signed 19 May 2025, effective 1 Jan 2026) extended it to all licensed physicians, with exceptions for the sale of a practice and repayment of loans, relocation, signing bonuses and education costs. | high | source | 2026-10-01 |
| Nebraska | Enforced (reasonableness) | No general statute; courts apply common-law reasonableness. An employee covenant is enforced only if it restricts working for or soliciting the former employer's customers with whom the employee actually did business and had personal contact, and courts will not blue-pencil or reform an overbroad covenant: it is enforced as written or not at all (CAE Vanguard, Inc. v. Newman, 246 Neb. 334 (1994); reaffirmed in Unlimited Opportunity v. Waadah, 290 Neb. 629 (2015)). | No statute; courts enforce reasonable sale-of-business covenants (more leniently than employee ones). CAE Vanguard, a covenant signed with a sale of stock, says courts are more willing to uphold covenants given with a sale of goodwill, but it also refused to reform an overbroad one, so the no-blue-pencil rule applies to sellers too. | No specific statute | Customer-contact limit for employee covenants; no blue-pencil or reformation (all or nothing). LB921 restricts noncompetes and similar payments imposed by health care staffing agencies. | LB921 (health care staffing agencies: restricts noncompetes on staffing agency workers; fines of $500 then $5,000 and possible license loss), effective 1 Jul 2026. | medium | source | 2026-10-01 |
| Nevada | Restricted | NRS 613.195 makes an employee noncompete void unless supported by valuable consideration, no greater than needed to protect the employer, not an undue hardship on the employee, and appropriate to the consideration; a court that finds a supported covenant overbroad must revise it and enforce it as revised (§613.195(6)). | No statute (NRS 613.195 governs employer-employee covenants only); Unclear: check how Nevada courts treat sale-of-business covenants. | No specific statute | Banned for employees paid solely on an hourly wage basis, exclusive of tips (§613.195(3)). Cannot bar serving a former customer who was not solicited and left voluntarily (§613.195(2)). After a reduction in force or restructuring, enforceable only while the employer pays salary, benefits or equivalent (§613.195(5)). Employee gets attorney's fees if the employer violates the hourly or customer rules (§613.195(7)). | high | source | 2026-10-01 | |
| New Hampshire | Restricted | No general statute on enforceability; courts apply common-law reasonableness (no greater than needed to protect legitimate interests, no undue hardship, not injurious to the public). RSA 275:70 requires an employer to give a new hire a copy of the noncompete before the offer is accepted, or the noncompete is unenforceable. | No statute; Unclear: check whether New Hampshire courts apply a more lenient standard to sale-of-business covenants. | No specific statute (the health care bans below cover partnership agreements too). | RSA 275:70-a voids noncompetes for low-wage employees (hourly rate at or below 200% of the federal minimum wage, i.e. $14.50, or the tipped minimum). Health care bans: physicians (2016), nurses and podiatrists (2018), APRNs (2025), physician associates (2026), reaching partnership, employment or other professional relationships. Pre-offer notice required (RSA 275:70). | SB 172 (2025) extended the nurse ban to advanced practice registered nurses (effective 23 Aug 2025 per Beck Reed Riden); HB 402 (2026) bans noncompetes for physician associates in contracts entered or renewed on or after 7 Jul 2026. | high | source | 2026-10-01 |
| New Jersey | Enforced (reasonableness) | No general statute; courts apply common-law reasonableness (protects a legitimate business interest, no undue hardship on the employee, not injurious to the public) and may partially enforce an overbroad covenant. | No statute; Unclear: check whether a separate, more lenient standard is applied (the 2025 ban bills A5708/S4385 would have expressly exempted noncompetes entered into in the sale of a business). | No specific statute | No wage threshold or statutory duration cap. Beck Reed Riden lists in-house counsel and psychologists as exempt (professional rules). | medium | source | 2026-10-01 | |
| New Mexico | Enforced (reasonableness) | No general statute; courts apply common-law reasonableness. NMSA 1978 §24-1I-2 makes a noncompete restricting a health care practitioner's clinical services in New Mexico unenforceable after the employment or agreement ends. | No statute; Unclear: check. (The health care act's §24-1I-5(A) does not apply to agreements between practitioners who are shareholders, owners, partners or directors of a health care practice.) | No specific statute. Note §24-1I-5(A): the health care ban does not apply to agreements between health care practitioners who are shareholders, owners, partners or directors of a practice, so owner-to-owner covenants fall back on common-law reasonableness. | Health care practitioners (dentists, osteopathic physicians, physicians, podiatrists, CRNAs, and since 2023 psychologists, physician assistants and pharmacists) providing clinical services: noncompetes unenforceable; out-of-state choice of law or forum clauses in such agreements void. Applies to agreements from 1 Jul 2015 (later dates for added groups). | 2023 amendment extended the health care act to psychologists, physician assistants and pharmacists for agreements executed on or after that act's effective date (§24-1I-5(D)). | medium | source | 2026-10-01 |
| New York | Enforced (reasonableness) | No general statute; courts apply common-law reasonableness: no greater than needed to protect a legitimate interest, no undue hardship, not injurious to the public, and courts may partially enforce an overbroad covenant (BDO Seidman v. Hirshberg, 93 N.Y.2d 382 (1999)). | No statute; courts enforce reasonable sale-of-business covenants (more leniently than employee ones) (Purchasing Associates, Inc. v. Weitz, 13 N.Y.2d 267 (1963)). | No specific statute | A state statute bars noncompetes for broadcast industry employees (except management employees). No wage threshold yet. | None enacted. S9759/A10023 (ban for workers earning under $500,000 a year and all health care workers; 1-year cap with pay; exception for sellers of a 15%+ ownership interest) passed the Senate 3 Jun 2026 but the Assembly did not vote before the session ended. NYC Int 0115-2026 (citywide ban) is in committee. Governor Hochul vetoed an earlier ban on 22 Dec 2023. | medium | source | 2026-10-01 |
| North Carolina | Enforced (reasonableness) | N.C. Gen. Stat. §75-4 makes a contract limiting a person's right to do business in North Carolina unenforceable unless it is in writing and signed by the restrained party; beyond that courts apply common-law reasonableness (part of an employment contract, based on valuable consideration, reasonable in time and territory, protecting a legitimate business interest). | No statute beyond §75-4's writing-and-signature requirement, which applies to any covenant including a seller's; Unclear: check whether courts apply a more lenient standard. | No specific statute | Strict blue pencil only: courts may strike distinct overbroad terms but not rewrite them. Possible limits for physicians (Beck Reed Riden: 'possibly, in underserved areas'). | medium | source | 2026-10-01 | |
| North Dakota | Banned (with exceptions) | N.D. Cent. Code §9-08-06: any contract restraining anyone from exercising a lawful profession, trade or business is void to that extent, except the two listed exceptions; employee noncompetes are unenforceable. | Yes: §9-08-06(1). A person who sells the goodwill of a business, and that person's partners, members or shareholders, may agree with the buyer not to carry on a similar business within a reasonable geographic area and for a reasonable length of time, if the buyer (or a successor to the goodwill) carries on a like business in that area. | Yes: §9-08-06(2). Partners, LLC members or shareholders may, upon or in anticipation of dissolution of the partnership, LLC or corporation, upon or in anticipation of a partner's or member's dissociation, or in an agreement on the dissociation or sale of an owner's interest, agree not to carry on a similar business within a reasonable geographic area where the business was transacted. | Both exceptions require a reasonable geographic area (the sale exception also a reasonable length of time). Beck Reed Riden notes out-of-state choice-of-law and forum clauses are unenforceable. | high | source | 2026-10-01 | |
| Ohio | Enforced (reasonableness) | No general statute; courts apply common-law reasonableness (no greater than needed to protect legitimate interests, no undue hardship, not injurious to the public) and may modify an overbroad covenant and enforce it as modified. | No statute; Unclear: check whether Ohio courts apply a more lenient standard to sale-of-business covenants. | No specific statute | No wage threshold or statutory duration cap. Courts weigh factors such as time and space limits, sole customer contact, access to confidential information and hardship. | medium | source | 2026-10-01 | |
| Oklahoma | Banned (with exceptions) | 15 O.S. §217 voids every contract restraining a lawful profession, trade or business except as allowed by §§218, 219 and 219A. Under §219A an employee bound by a noncompete may work in the same or a similar business so long as the employee does not directly solicit the former employer's established customers; any conflicting term is void. | Yes: 15 O.S. §218. One who sells the goodwill of a business may agree not to carry on a similar business within a specified county and contiguous counties, or a specified city or town, so long as the buyer (or a successor to the goodwill) carries on a like business there; a broader covenant is valid only within the county of the business's primary place of conduct and contiguous counties. | Yes: 15 O.S. §219. Partners may, upon or in anticipation of dissolution, agree that none of them will carry on a similar business within a specified county and contiguous counties, or a specified city or town; a broader covenant is valid only within the partnership's primary county and contiguous counties. The statute names partners only. | Employee covenants limited to non-solicitation of established customers (§219A). Non-solicitation of employees allowed under §219B. Sale and partner covenants limited to the county-based territory and are reformed to it if broader. | high | source | 2026-10-01 | |
| Oregon | Restricted | ORS 653.295 makes an employee noncompete void unless: the employer gave written notice in an offer received at least two weeks before the first day of work (or it comes with a bona fide advancement); the employee is an exempt executive, administrative or professional employee; the employer has a protectable interest (trade secrets or competitively sensitive confidential information); a signed copy is given within 30 days after termination; and the employee's annual gross salary and commissions exceed the indexed threshold. | No statute; ORS 653.295's requirements and 12-month cap apply only to noncompetes made in the context of an employment relationship or contract (§653.295(4)), so a seller's covenant falls under common-law reasonableness. | No specific statute (ORS 653.295(4) limits the statute to employment noncompetes). | Salary threshold $100,533 adjusted annually for inflation: $119,541 for 2026 (figure from Beck Reed Riden's July 2026 chart). Maximum 12 months after termination (excess void). Enforceable against a non-qualifying employee only if the employer pays the greater of 50% of salary and commissions or 50% of the indexed threshold during the restriction (§653.295(7)). Customer and employee non-solicits and bonus restriction agreements are outside these limits. Home health care workers excluded; SB 951 limits noncompetes for medical licensees. | SB 951 (2025), effective 9 Jun 2025: restricts noncompetes (and some nondisparagement/nondisclosure terms) for medical licensees such as physicians, nurse practitioners and physician associates. The 2026 salary threshold is $119,541. | high | source | 2026-10-01 |
| Pennsylvania | Enforced (reasonableness) | No general statute; courts apply common-law reasonableness: the covenant must be ancillary to employment or a sale, supported by consideration, reasonably necessary to protect legitimate interests and reasonable in time and space (Hess v. Gebhard & Co. (Pa. 2002)). | No statute; courts enforce reasonable sale-of-business covenants (more leniently than employee ones): employee covenants are held to a stricter standard of reasonableness than covenants ancillary to the sale of a business (Insulation Corp. of America v. Brobston, 446 Pa. Super. 520 (1995); Missett v. Hub International Pennsylvania, LLC, 6 A.3d 530 (Pa. Super. 2010)). The 2024 health care act also does not void a practitioner-owner's covenant because of a sale of an ownership interest or of substantially all assets. | No specific statute | Fair Contracting for Health Care Practitioners Act (Act 74 of 2024): noncompetes for medical doctors, osteopaths, CRNAs, certified registered nurse practitioners and physician assistants entered after 1 Jan 2025 are void unless 1 year or less and the practitioner was not dismissed; employers may still recover certain relocation, training and patient-base expenses; patient notice required within 90 days of departure. | Act 74 of 2024 (HB 1633, signed 17 Jul 2024), effective 1 Jan 2025. | high | source | 2026-10-01 |
| Rhode Island | Restricted | Noncompetes are enforceable if reasonable and narrowly tailored to a legitimate business interest, but the Rhode Island Noncompetition Agreement Act (R.I. Gen. Laws §§ 28-59-1 to 28-59-3) makes them unenforceable against FLSA non-exempt employees, low-wage employees, workers aged 18 or younger, and student interns or short-term student employees (§ 28-59-3). | Yes. R.I. Gen. Laws § 28-59-2(8)(iii) excludes from the Act a noncompete made in connection with the sale of a business entity or all or substantially all of its operating assets, or the disposal of an ownership interest, where the restricted party is a significant owner, member or partner who receives significant consideration or benefit from the sale. Such covenants are left to common-law reasonableness. | No specific dissolution statute. § 28-59-2(8)(iii) covers a member or partner disposing of an ownership interest (significant owner, significant consideration), and § 28-59-2(8)(iv) excludes noncompetes originating outside an employment relationship, so owner-to-owner covenants fall outside the Act and are judged under common law. | Low-wage employee = average annual earnings not more than 250% of the federal poverty level (about $39,900 in 2026, counting only regular non-overtime hours). Physicians are separately restricted, and advanced practice registered nurses since June 17, 2024. The Act's worker bans do not reach a significant owner selling out or a covenant made outside employment. | June 17, 2024: ban on noncompetes for advanced practice registered nurses. A broader 2024 ban (H 8059) was vetoed; a 2026 bill (S 2160, $125,000 earnings floor) was introduced but no enactment was found. | high | source | 2026-10-01 |
| South Carolina | Enforced (reasonableness) | No general statute; courts apply common-law reasonableness: the covenant must be necessary to protect a legitimate business interest, reasonably limited in time and place, not unduly harsh on the employee's ability to earn a living, reasonable as public policy, and supported by valuable consideration. | No statute; courts enforce reasonable sale-of-business covenants more leniently than employee ones. In Palmetto Mortuary Transport, Inc. v. Knight Systems, Inc., 424 S.C. 444, 818 S.E.2d 724 (S.C. 2018), the Supreme Court said greater latitude is allowed for a covenant relating to the sale of a business and upheld a 10-year, 150-mile restriction as written. | No specific statute | No statutory duration cap, income threshold or profession ban. Courts generally will not rewrite (blue-pencil) an overbroad covenant into a reasonable one, so an overbroad term can sink the restriction. | high | source | 2026-10-01 | |
| South Dakota | Enforced (statute) | SDCL § 53-9-8 voids any contract restraining a lawful profession, trade or business except as allowed by §§ 53-9-9 to 53-9-12. An employee may agree not to compete or solicit existing customers for up to two years after the agreement ends, within a specified county, municipality or area, if the employer keeps carrying on a like business there (§ 53-9-11). | Yes. SDCL § 53-9-9: a seller of a business's goodwill may agree not to carry on a similar business within a specified county, city or area as long as the buyer carries on a like business there. New SDCL § 53-9-10.1 (effective July 1, 2026): in an entity's governing documents or a contract for the purchase, sale or transfer of an ownership interest, an owner may agree not to compete after transferring the interest, within the area where the entity does business, for up to three years from the transfer. | Yes. SDCL § 53-9-10: partners may, upon or in anticipation of dissolution, agree that none of them will carry on a similar business within the same municipality where the partnership did business, or a specified part of it. SDCL § 53-9-10.1 (2026) now covers owners of any business entity (LLC members, shareholders) through the governing documents or the transfer contract, capped at three years. | Employee covenants: two years maximum (§ 53-9-11). Since July 1, 2023 a covenant restricting a listed healthcare practitioner (§ 53-9-11.1: physicians, PAs, nurses, dentists, pharmacists, therapists and others) after employment or after dissolution of a partnership is voidable (§ 53-9-11.2), but that does not apply to a provision effective on the sale of a practice or an interest in a practice. Community services providers added July 1, 2026. Owner covenants under § 53-9-10.1: three years maximum. | July 1, 2026: HB 1180 created § 53-9-10.1 (owner covenants in governing documents and ownership transfers, three-year cap); SB 153 extended § 53-9-11.2 voidability to community services providers. July 1, 2023: healthcare practitioner list expanded and noncompetes made voidable. | high | source | 2026-10-01 |
| Tennessee | Restricted | Courts enforce noncompetes that are reasonable in time and area and necessary to protect a legitimate interest. Since July 1, 2026, Tenn. Code Ann. § 50-1-211 bars an employer from requiring, requesting or enforcing a noncompete against an employee earning less than $70,000 in annualized compensation, and § 50-1-210 makes two years presumptively reasonable for employees and independent contractors (longer is presumed unreasonable). | Yes. Tenn. Code Ann. § 50-1-210(b)(3) (effective July 1, 2026): a restraint on the owner or seller of all or a material part of a business's assets, corporate shares, a partnership interest, an LLC membership interest or other equity interest is presumed reasonable in time if it is five years or less, or as long as payments to the owner or seller continue, whichever is longer. | No specific dissolution statute, but § 50-1-210(b)(3) expressly covers covenants against the owner or seller of a partnership interest or LLC membership interest (five-year or payment-period presumption), and the two-year employee presumption does not apply to restraints associated with the sale or ownership of such interests (§ 50-1-210(b)(1)(B)). | $70,000 annualized compensation floor for employees, fixed and not indexed (hourly: rate x 40 x 52), covering noncompetes only, not nonsolicitation or confidentiality agreements. Presumptions: 2 years for employees and contractors, 3 years for distributors, dealers, franchisees, lessees and trademark licensees, 5 years (or the payment period) for sellers. Courts may modify an overbroad covenant (§ 50-1-210(d)). Certain healthcare providers have separate limits. | July 1, 2026: Public Chapter 934 (HB 1034 / SB 995) added §§ 50-1-210 and 50-1-211; applies to proceedings occurring and agreements entered into, renewed or amended on or after that date. | medium | source | 2026-10-01 |
| Texas | Enforced (statute) | Tex. Bus. & Com. Code § 15.50(a): a covenant not to compete is enforceable if it is ancillary to or part of an otherwise enforceable agreement and is reasonable in time, geographic area and scope of activity, imposing no greater restraint than necessary to protect goodwill or another business interest. §§ 15.51-15.52 set the remedies and preempt other law, and courts must reform an overbroad covenant. | No separate sale-of-business rule; § 15.50 governs every covenant not to compete, including one given by a seller. Goodwill is a protectable interest named in the statute, so a seller's covenant tied to the goodwill sold is enforced if reasonable. | No specific statute | No income threshold or general duration cap. Physicians (§ 15.50(b)) and, for covenants entered or renewed on or after September 1, 2025, dentists, professional and vocational nurses and physician assistants (§ 15.501): buyout capped at total annual salary and wages, restriction at most one year and a five-mile radius, terms clear and conspicuous in writing, and void if the practitioner is let go without good cause. § 15.50(c) excludes physicians' ownership interests in licensed hospitals and ambulatory surgical centers. The fee-shifting penalty in § 15.51(c) applies where the covenant's primary purpose is personal services. | September 1, 2025: SB 1318 amended §§ 15.50 and 15.52 and added § 15.501 (healthcare practitioner limits), for covenants entered into or renewed on or after that date. | medium | source | 2026-10-01 |
| Utah | Enforced (statute) | Utah Code § 34-51-201: a post-employment noncompete entered into on or after May 10, 2016 may last no more than one year after employment ends, on top of the common-law reasonableness requirements; a longer one is void. Since May 6, 2026 noncompetes with licensed healthcare workers are banned outright, and with veterinarians who own less than 5% of the business. | Yes. Utah Code § 34-51-202(1)(b): the chapter does not prohibit a noncompete (or healthcare noncompete) related to or arising out of the sale of a business if the restricted person receives value related to the sale. 'Sale of a business' (§ 34-51-102(9)) means a transfer of ownership by sale, acquisition, merger or other method of the assets of a business entity or a division or segment of it. The one-year cap does not apply; common-law reasonableness does. | No specific statute. The one-year cap applies only to employer-employee noncompetes (§ 34-51-102(8)), so a covenant between co-owners outside employment is left to common law, except that the 2026 healthcare ban reaches anyone a healthcare worker 'works for or with', and veterinarians with a 5% or greater ownership interest are excluded from the vet ban. | One-year cap for employees (agreements since May 10, 2016); employer pays the employee's fees and damages if it tries to enforce an unenforceable noncompete. Broadcasters: special rules. Healthcare workers (33 license types including physicians, PAs, nurses, dentists, therapists): no noncompetes on or after May 6, 2026, except sale of a business or a good-faith severance agreement. Veterinarians: banned unless they own at least 5%. | May 7, 2025: temporary healthcare workers placed through a healthcare platform. May 6, 2026: 2026 General Session ch. 341 (HB 270 and companion bills SB 89, SB 111) amended §§ 34-51-102, -201 and -202: healthcare worker ban, veterinarian ban, sale-of-business exception extended to healthcare noncompetes. | high | source | 2026-10-01 |
| Vermont | Enforced (reasonableness) | No general statute; courts apply common-law reasonableness: the covenant must protect a legitimate business interest, not be unnecessarily restrictive of the employee, be limited in time, area and/or industry, and not be contrary to public policy. | Unclear: check | No specific statute | No statutory duration cap, income threshold or notice rule found. No profession-wide statutory ban found. | medium | source | 2026-10-01 | |
| Virginia | Restricted | Va. Code § 40.1-28.7:8 bans noncompetes with low-wage employees and, since July 1, 2026, licensed health care professionals; for everyone else courts apply common-law reasonableness (narrowly drawn, reasonable in time, area and scope, not unduly harsh, not against public policy). Since July 1, 2026 no noncompete is enforceable against an employee discharged without cause unless severance or another payment, disclosed when the covenant was signed, is provided. | The statute covers only covenants between an employer and an employee, so a seller's covenant is outside it. Its only express sale-of-business carve-out is for health care professionals (§ 40.1-28.7:8(H)(2): sale of all or substantially all of the operating assets and goodwill, or the ownership interest, of the professional's business entity, if reasonable in scope, duration and area). Otherwise no statute; common-law standard for sellers not confirmed: check. | No specific statute | Low-wage employee: average weekly earnings below the Commonwealth's average weekly wage ($1,507.01 a week, about $78,365 a year, for 2026) or, since July 1, 2025, any FLSA non-exempt (overtime-eligible) employee regardless of pay; includes interns and low-paid hourly contractors; excludes employees paid mainly by commissions or bonuses. Civil penalty $10,000 per violation; notice of the law must be posted. Health care professionals (Boards of Medicine, Nursing, Counseling, Optometry, Psychology, Social Work) banned from July 1, 2026. Franchisor post-termination noncompetes on franchisees restricted from July 1, 2026. These limits reach employees, not owners selling a business. | July 1, 2025: low-wage ban extended to FLSA non-exempt employees. July 1, 2026: SB 170 (severance required to enforce against an employee fired without cause), SB 128 / HB 627 (health care professionals banned, with a sale-of-business exception), HB 69 / SB 240 (franchisees). | high | source | 2026-10-01 |
| Washington | Restricted | RCW 49.62 voids a noncompete unless the employee earns more than the indexed threshold (independent contractors a higher one), notice and terms are disclosed in writing before acceptance of the offer, and a laid-off employee is paid base salary during the restriction; over 18 months is presumed unreasonable. From June 30, 2027 (Laws 2026, ch. 149) all noncompetes with employees and independent contractors are void, including existing ones. | Yes. RCW 49.62.010(4)(d) excludes from 'noncompetition covenant' a covenant by a person purchasing or selling the goodwill of a business or otherwise acquiring or disposing of an ownership interest, but only if the person signing it buys, sells, acquires or disposes of an interest of one percent or more of the business. The same exclusion carries into the post-ban definition effective June 30, 2027 (RCW 49.62.010(3)(e)(iv)). | No specific statute. RCW 49.62 covers covenants restraining an employee or independent contractor; a partner or LLC member disposing of a 1% or greater interest falls under the ownership-interest exclusion. | 2026 thresholds: employees must earn more than $126,858.83 a year (W-2 box 1); independent contractors more than $317,147.09. 18-month presumption. Garden leave pay for laid-off employees. Forum must be Washington. Penalty $5,000 or actual damages plus fees. Since June 6, 2024 'noncompete' includes no-service and broad customer nonsolicitation clauses. Total ban from June 30, 2027, with employers required to notify current and former workers by October 1, 2027 that their noncompetes are void. Thresholds and ban do not apply to the 1%+ ownership exclusion. | June 6, 2024: Laws 2024, ch. 36 (definitions expanded, 1% ownership floor on the sale-of-business exclusion). 2026: Laws 2026, ch. 149 (HB 1155) bans all employee and contractor noncompetes effective June 30, 2027, reaching existing agreements. | high | source | 2026-10-01 |
| West Virginia | Enforced (reasonableness) | No general statute; courts apply common-law reasonableness: the covenant must be ancillary to a lawful contract, no greater than reasonably necessary to protect a legitimate business interest, reasonable in time and area, not an undue hardship on the employee and not injurious to the public. | No general statute. For physicians only, W. Va. Code § 47-11E-4(1): the physician limits do not apply where the physician sold the business or practice (assets, stock, membership interests or otherwise) to the employer. For other businesses: check. | No general statute. For physicians, W. Va. Code § 47-11E-4(2): the physician limits do not apply to contracts between physicians who are shareholders, owners, partners, members or directors of a health care practice. | Physician employment noncompetes (contracts since July 1, 2017): at most one year and 30 road miles from the primary place of practice, and void if the employer terminates the physician (W. Va. Code § 47-11E-2). No income threshold or general duration cap. | medium | source | 2026-10-01 | |
| Wisconsin | Enforced (statute) | Wis. Stat. § 103.465: a covenant by an employee or agent not to compete within a specified territory and time is lawful and enforceable only if the restrictions are reasonably necessary to protect the employer or principal; a covenant with any unreasonable restraint is void in its entirety, even as to the reasonable parts. | No statute. § 103.465 covers covenants by an assistant, servant or agent toward an employer or principal; Wisconsin courts have held that the common-law rule of reason, not § 103.465, governs a covenant made outside the employment bargain where the employer had no bargaining advantage (Selmer Co. v. Rinn, 2010 WI App 106). Whether courts apply a more lenient standard to sale-of-business covenants was not confirmed: check. | No specific statute | No income threshold, duration cap or profession ban in statute. The all-or-nothing rule means one overbroad term voids the whole covenant. § 103.465 also reaches forfeiture-for-competition clauses in benefit plans. | medium | source | 2026-10-01 | |
| Wyoming | Banned (with exceptions) | W.S. § 1-23-108(a) (contracts entered into on or after July 1, 2025): any covenant not to compete that restricts a person's right to receive compensation for skilled or unskilled labor is void, except for executive and management personnel and their professional staff, covenants protecting trade secrets, sale-of-business covenants, and limited training and relocation cost repayment clauses. | Yes. W.S. § 1-23-108(a)(i): the ban does not apply to any covenant not to compete contained in a contract for the purchase and sale of a business or the assets of a business. | No specific statute. For physicians the reverse applies: W.S. § 1-23-108(b) voids a noncompete in an employment, partnership or corporate agreement between physicians on termination of the employment, partnership or corporate affiliation. | Exceptions: executives, managers, officers and their professional staff; trade secret protection; sale of a business; repayment of relocation, education and training costs on a sliding scale (100% under 2 years of service, 66% for 2-3 years, 33% for 3-4 years). Physician noncompetes void, with a right to tell rare-disorder patients where they now practice. Contracts made before July 1, 2025 are unaffected and judged under prior common-law reasonableness. | July 1, 2025: SF0107 (2025 Enrolled Act No. 87) created W.S. § 1-23-108, applying to contracts entered into on and after that date. | high | source | 2026-10-01 |
No row matches that.
Sources: the statute or opinion linked in each row, confirmed 1 October 2026; medium-confidence rows rest on Beck Reed Riden's 50-state chart (1 July 2026) or law firm alerts. Status describes employee non-competes; the two owner columns are the point of the table. General information, not legal advice.
Why a seller's promise is judged more kindly than an employee's
Courts have long sorted restraints into those that come with a sale of a business, those between partners, and those in employment, and they are kindest to the first. The Restatement (Second) of Contracts §188 names all three as restraints "ancillary" to a valid transaction that can be enforced if reasonable. The logic is about who paid for what. A buyer who pays for a firm's goodwill gets nothing if the seller opens across the street the next week, and a seller who was paid for that goodwill has no claim to sympathy for being held to the bargain. An employee, by contrast, usually signed on the first day with no lawyer and no price for the promise.
South Carolina's Supreme Court put the rule in one line in Palmetto Mortuary Transport v. Knight Systems (2018): covenants "executed in conjunction with the sale of a business should be scrutinized at a more relaxed level" than employment covenants. It upheld a 10-year restriction over a 150-mile radius as written. Few employee covenants of that size would survive anywhere.
The gentler standard is not a blank cheque. Courts still ask whether the area and the time match the business that was sold, and the states that will not rewrite an overbroad covenant (Nebraska and South Carolina among them, see below) throw out the whole promise rather than trim it.
Where a statute decides it
In the states that void non-competes by statute, the exceptions are the whole of the law for owners, and they are narrower than people expect.
California voids "every contract" restraining anyone from a lawful business (Bus. & Prof. Code §16600). §16601 lets a seller of goodwill, or an owner selling all of their ownership interest, agree not to compete "within a specified geographic area" where the business was carried on, for as long as the buyer carries on a like business there. §16602 covers a partner on dissolution or on the partner's dissociation; §16602.5 covers an LLC member on dissolution or termination of the member's interest. An owner who sells part of a stake is outside §16601's words, which is the case that ends up in court.
North Dakota (N.D. Cent. Code §9-08-06) has the most complete owner exception in the country: a seller of goodwill "and the person's partners, members, or shareholders" may agree to a reasonable area and time, and partners, LLC members or shareholders may agree not to compete on dissolution, on a partner's or member's dissociation, or in an agreement on the sale of an owner's interest.
Oklahoma keeps 1910 language. A seller of goodwill (15 O.S. §218) and partners on dissolution (§219) may agree not to compete within "a specified county and any county or counties contiguous thereto, or a specified city or town." A wider covenant is cut back to the business's home county and its neighbors. The partner section names partners only, not LLC members.
Minnesota (Minn. Stat. §181.988) voided non-competes signed from 1 July 2023 but keeps two exceptions: a covenant "agreed upon during the sale of a business," and one "agreed upon in anticipation of the dissolution of a business" by partners, members or shareholders. A single member walking away from a continuing LLC is not dissolution; that member's covenant needs to ride on a sale of their interest to fit the first exception.
Wyoming voided non-competes for contracts from 1 July 2025 (W.S. §1-23-108) with an exception for "a contract for the purchase and sale of a business or the assets of a business," among others. It also voids covenants between physicians on the end of a partnership.
Montana (Mont. Code Ann. §§28-2-703 to 28-2-705), Alabama (§8-1-190(b)(3) and (b)(6)), Hawaii (§480-4(c)), Louisiana (La. R.S. 23:921) and South Dakota (SDCL ch. 53-9) all have express sale and partner sections. Two carry hard numbers. Louisiana caps every covenant, seller's and partner's included, at two years and makes the parties name the parishes or municipalities. South Dakota added §53-9-10.1 on 1 July 2026: an owner of any entity may agree in the governing documents or the transfer contract not to compete for up to three years after transferring the interest.
How long a seller can be bound
Three states put a number on what is presumed reasonable for a seller, and each is far longer than for an employee:
- Georgia (O.C.G.A. §13-8-57(d)): up to five years, or the period of sale payments if longer, for a seller of assets, shares, a partnership interest or an LLC membership. Employees get two years.
- Florida (Fla. Stat. §542.335(1)(d)3): three years or less presumed reasonable and more than seven presumed unreasonable for a seller of a business, shares, a partnership interest or an LLC membership. Employees get six months and two years.
- Tennessee (Public Chapter 934, in force 1 July 2026, the amendment that became it): five years or the payment period, whichever is longer, for a seller of assets, shares, a partnership interest or an LLC membership, against two years for employees and a ban below $70,000 in pay.
Alabama runs the other way: a seller's restraint of one year or less is presumed reasonable, against two years for an employee.
Where the employee rules stop at the owner
The wave of employee rules since 2018 mostly stops at the owner's door, but the door has a threshold.
- Massachusetts (c. 149, §24L) excludes covenants made with the sale of a business or the disposal of an ownership interest, but only where the restricted person is a significant owner, member or partner who receives significant consideration. Rhode Island (§28-59-2(8)) copied the same words.
- Washington (RCW 49.62.010) excludes a covenant by someone buying or selling goodwill or an ownership interest of one percent or more. Washington has voted to void all employee and contractor non-competes from 30 June 2027; the ownership exclusion survives the ban.
- Illinois (820 ILCS 90/5) excludes covenants by a person "purchasing or selling the goodwill of a business or otherwise acquiring or disposing of an ownership interest," so the $75,000 pay floor does not apply to them.
- Colorado (C.R.S. §8-2-113(3)(c)) allows a covenant tied to the sale of a business or of an ownership share. Since 6 August 2025, a minority owner who received the stake as compensation can be bound for no more years than the price they receive for it divided by their average annual cash compensation from the business. An employee with a small equity grant who sells it back for a modest sum gets a short covenant.
- District of Columbia (D.C. Code §32-581.01) and Utah (§34-51-202) exclude sale-of-business covenants from their employee rules; Arkansas (§4-75-101(h)) leaves them to the common law.
The owner who is also an employee is the hard case. A covenant in the employment agreement can be judged as an employee covenant even when the same person also sold shares. The safer drafting puts the owner's promise in the purchase agreement or the operating agreement, tied to the price paid for the interest.
Four traps for partners and LLC members
Partners only. Oklahoma's §219, Montana's §28-2-705 and Hawaii's §480-4(c)(2) speak of partners. They say nothing of LLC members, and an LLC member's covenant in those states has to stand on the sale-of-goodwill section or on the general rule. California, North Dakota, Minnesota and Louisiana name members expressly.
All or nothing. Courts in Nebraska (CAE Vanguard v. Newman, 1994) and South Carolina will not rewrite an overbroad covenant, and Wisconsin's statute (§103.465) voids the whole of an employee covenant if any part is unreasonable. One greedy clause can cost the buyer everything. Florida and Texas sit at the other end: their statutes tell courts to reform an overbroad covenant and enforce what is left.
Doctors and other clinicians. Delaware (6 Del. C. §2707), Colorado and Wyoming void non-competes even in partnership agreements between physicians; Connecticut caps them at one year and 15 miles; a run of 2024 to 2026 laws (Arkansas, Indiana, Maine, Montana, Pennsylvania, Texas, Utah, Virginia and others) restricts them for health care workers, often with a sale-of-practice exception. A medical, dental or veterinary practice should read its state's health care section before the general one.
Choice of law. California's §16600.5 declares a void covenant unenforceable "regardless of where and when the contract was signed," and Minnesota bars an employer from requiring a Minnesota employee to give up Minnesota law. A covenant that California law treats as void, such as one from an owner who sold only part of a stake and fits no exception, may not be rescued by choosing another state's law.
Whether federal law bans non-competes
What to put in the agreement
Put the owner's covenant where the price is. A promise in the purchase agreement, the buy-sell agreement or the operating agreement, recited as part of what the buyer pays for, is the version every state treats most kindly.
Name the area and the time the statute allows. In Oklahoma that means counties; in Louisiana parishes or municipalities and no more than two years; in Montana the city or county where the principal office is, or an adjacent county; in South Dakota no more than three years for an owner's covenant under the 2026 section.
Fit the area to where the business actually trades. The sale-of-business statutes in California, Montana, North Dakota and Oklahoma tie the covenant to the area where the business was carried on and only for as long as the buyer carries on a like business there.
Check the dates. Many of the 2023 to 2026 laws apply only to agreements signed or renewed after their effective date (Minnesota from 1 July 2023, Wyoming from 1 July 2025), and an older covenant is judged under the old law. Washington's ban from 30 June 2027 is the exception: it reaches covenants already signed.
Draft for the strictest court. In a state that will not trim an overbroad covenant, a modest covenant that holds is worth more than a broad one that falls.
What happens to non-competes when a partnership ends, and how courts read them, is covered in Non-Compete Rules After a Business Partnership Ends. The clause belongs in the agreement before anyone wants to leave: see Writing a Partnership Exit Clause Before You Sign and, for the deal itself, How to Buy Out a Business Partner.
How to check a state yourself
Statutes change every session; more than 25 of the rows above record a change enacted since 2023. To check a state:
Checking one state's non-compete law
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Find the section
Start from a 50-state compilation such as Beck Reed Riden's chart to learn the statute's number, then open it on the state legislature's own code site. Search the code for "sale of goodwill", "restraint of trade" and "covenant not to compete".
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Read the exceptions, not just the rule
Look for a sale-of-business or goodwill section and a partnership-dissolution section. Note whether it names LLC members and shareholders or only partners, and whether it sets an area or a time limit.
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Check the effective date
Find the session law that last amended the section and the date it applies from. Most recent laws apply only to agreements signed or renewed after that date.
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Look for this year's bills
The legislature's bill search for "noncompete" shows what passed this session. Bills that pass one chamber are routinely reported as law; New York's Senate passed a ban bill in June 2026, and the Assembly did not vote on it.
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Read one recent appellate case
Where there is no statute, a state supreme court or appellate opinion on a sale-of-business covenant tells you how gently the courts treat it. Search the state's courts for "sale of a business" with "covenant not to compete".
Questions owners ask
Generally yes. The five states that ban employee non-competes (California, Minnesota, North Dakota, Oklahoma, Wyoming) write the exception for sellers into the statute; elsewhere courts apply a reasonableness test that is usually gentler for sellers than for employees, though for 16 states the table marks how gentle as unclear. The area and the time still have to fit the business sold, and some states fix the area or cap the time (see the table).
No. The 2024 rule was set aside in Ryan LLC v. FTC before it took effect, the FTC dropped its appeals in September 2025, and the rule was removed from the Code of Federal Regulations on [12 February 2026](https://www.federalregister.gov/documents/2026/02/12/2026-02866/revision-of-the-negative-option-rule-withdrawal-of-the-cars-rule-removal-of-the-non-compete-rule-to). State law governs.
Yes in most states, and some statutes name it: South Dakota's §53-9-10.1 (from 1 July 2026) lets an owner agree in the governing documents not to compete for up to three years after transferring the interest. In the void-by-default states the covenant has to fit an exception, such as California's §16602.5 for LLC members or North Dakota's §9-08-06(2).
Usually not. Illinois, Massachusetts, Rhode Island, Washington, the District of Columbia and Utah exclude covenants tied to a sale of an ownership interest from their employee rules, though Massachusetts and Rhode Island require a significant owner receiving significant consideration and Washington an interest of one percent or more.
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