Non-compete agreements are not banned nationwide under current federal law. The FTC adopted a broad rule in 2024, but the rule was blocked before taking effect and no nationwide ban is in force as of September 4, 2026.
False
Under federal law, non-compete agreements are banned nationwide in the United States.
Employee Non-Compete Agreements: What Every Association Needs to Know in a Rapidly Evolving Legal and Regulatory Landscape
Source: americanbar.org
At a glance
Verified September 4, 2026Key Evidence
The FTC issued a final rule in April 2024 that was intended to restrict most non-compete agreements nationwide, but the rule never took effect.
A federal district court blocked the rule before its effective date, and the FTC later removed it from the Code of Federal Regulations, according to the 2026 status summary.
As of 2026, enforceability remains largely governed by state law. Some states, including California, broadly restrict non-competes, while other states continue to permit them under specified conditions.
The reporting
What the Evidence Shows
The Federal Trade Commission adopted a final rule in April 2024 that would have prohibited most new non-compete agreements and restricted enforcement of many existing agreements. That action was a federal regulatory rule, not a blanket ban already established in federal law, and it included limited exceptions.crowell.comcrowell.comFTC Issues Final Rule Banning Most Non-Compete Agreements
wiley.lawwiley.lawFederal Trade Commission Issues Final Rule Banning Most Non-Competes: What You...+1 more
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