Non-Compete Agreements in 2025: What Employers and Employees Need to Know

The enforceability of non-compete clauses has shifted dramatically in recent years, following a wave of state-level legislative changes and heightened federal scrutiny from the FTC. Employers who have long relied on broad restrictive covenants to protect trade secrets and client relationships may find that those agreements — particularly older, poorly drafted ones — offer far less protection than assumed.

Several states, including California, Minnesota, and North Dakota, now ban non-competes outright for most employees. Even in states where they remain enforceable in principle, courts have grown increasingly hostile to agreements that are overbroad in geographic scope, duration, or the categories of work they restrict. A clause that prohibits a mid-level software engineer from working in any technology role for two years anywhere in the country is unlikely to survive a challenge — and an unenforceable agreement provides no protection at all.

"In many states, a poorly drafted non-compete is worse than none at all — it signals to a court that the employer wasn't protecting a legitimate interest."

For employees, the practical implication is significant: non-compete agreements signed years ago may no longer bind them, and the threat of enforcement is often more bark than bite. Both sides benefit from a careful legal review of existing agreements before any employment transition occurs. Employers should also consider whether narrower, better-targeted tools — such as non-solicitation clauses, confidentiality agreements, and trade secret protections — may accomplish the same goals with far greater enforceability.