Non-Compete Laws by Country (2026)

Non-compete rules now differ sharply by country, state and province. Before relying on a candidate's old restraint or drafting a new one, check the local rule that applies on the hire date.

Non-competes at a glance

The table below compares the main non-compete rules in six countries where Aristo Search places senior staff. Use it as a first screen, then test any candidate restraint against the law of the place where the prior work happened and the place where the new role sits.

Country Employee non-competes What is changing Main law
United States Varies by state: banned in 5 states, banned below a pay threshold in about 11 more Washington full ban June 30, 2027; FTC rule never took effect State law
Canada Banned in Ontario (except executives); allowed if reasonable elsewhere Federal ban proposed for federally regulated employers ESA s.67.2 (Ontario); common law
United Kingdom Allowed if reasonable Government plans legislation, position expected early 2027 Common law
Ireland Allowed if reasonable No reform proposed Common law
Australia Allowed if reasonable Draft bill to ban them below A$190,100, not yet introduced Common law; Restraints of Trade Act 1976 (NSW)
New Zealand Allowed if reasonable Reform bill stalled Common law

Last checked 5 November 2026. This is general information for employers, not legal advice. Check with employment counsel in each country before you rely on it.

United States: non-compete laws by state

Federal efforts to ban non-competes have stalled. The FTC rule never took effect and the agency dropped its appeals in September 2025, so it now reviews individual restraints case by case. State law controls what employers can enforce. California, Minnesota, North Dakota, Oklahoma and Wyoming ban almost all employee non-competes. Washington will ban all non-competes from June 30, 2027. Many states allow restraints only above a pay threshold, such as Colorado at $130,014 in 2026. Florida's CHOICE Act points the other way for higher earners. When hiring, ask where the candidate last worked and check that state's rule before assuming a non-compete is valid.

State Status Key rule Latest change Law
California Banned Void for employees, including contracts signed out of state. Employers had to notify affected staff. 2024 Bus. & Prof. Code 16600 to 16600.5
Minnesota Banned Void for agreements signed on or after July 1, 2023, except on sale of a business. July 1, 2023 Minn. Stat. 181.988
North Dakota Banned Void, except on sale or dissolution of a business. - N.D.C.C. 9-08-06
Oklahoma Banned Void. Non-solicitation of established customers is allowed. - 15 O.S. 219A
Wyoming Banned Void for new agreements, except for executive and management staff, sale of a business and trade secrets. July 1, 2025 Wyo. Stat. 1-23-108
Colorado Banned below a pay threshold Void unless the worker is highly compensated ($130,014 in 2026). Customer non-solicits need 60% of that. Separate written notice required. January 1, 2026 (threshold) C.R.S. 8-2-113
Washington DC Banned below a pay threshold Void unless the worker is highly compensated (indexed each year, about $162,000 in 2026). October 1, 2022 D.C. Code 32-581.01
Illinois Banned below a pay threshold Void for workers earning $75,000 or less (non-solicits $45,000), rising to $80,000 and $47,500 on January 1, 2027. 14 days to review. January 1, 2027 (next step) 820 ILCS 90
Maryland Banned below a pay threshold Void for workers at or below 150% of the state minimum wage (about $46,800). Extra limits for healthcare roles. October 1, 2026 Md. Lab. & Empl. 3-716
Maine Banned below a pay threshold Void for workers at or below 400% of the federal poverty level ($63,840 in 2026). 3 business days notice before signing. Healthcare practitioners without ownership barred. July 2026 26 M.R.S. 599-A
New Hampshire Banned below a pay threshold Void for workers at or below 200% of the federal minimum wage. Must be disclosed before the offer is accepted. July 2026 RSA 275:70
Oregon Banned below a pay threshold Void unless the worker is salaried, exempt and above the indexed threshold (about $119,500 in 2026). Maximum 12 months. 2 weeks advance notice. Indexed yearly ORS 653.295
Rhode Island Banned below a pay threshold Void for non-exempt staff, students, under-18s and workers at or below 250% of the federal poverty level. 2020 R.I. Gen. Laws 28-59
Tennessee Banned below a pay threshold Void for workers earning under $70,000, for new agreements. July 1, 2026 Tenn. Code 50-1-701
Virginia Banned below a pay threshold Void for low-wage workers ($78,364.52 in 2026) and non-exempt staff. From July 1, 2026, not enforceable against anyone dismissed without cause unless severance was disclosed at signing. July 1, 2026 Va. Code 40.1-28.7:8
Washington Banned below a pay threshold Void unless pay exceeds $126,858.83 in 2026, maximum 18 months. All non-competes become void on June 30, 2027, including existing ones. June 30, 2027 (full ban) RCW 49.62; ESHB 1155
Hawaii Restricted by statute Banned for employees of technology businesses. Otherwise reasonableness test. 2015 Haw. Rev. Stat. 480-4(d)
Louisiana Restricted by statute Void except within statutory carve-outs: up to 2 years and named parishes. August 1, 2026 La. R.S. 23:921
Massachusetts Restricted by statute Maximum 12 months. Garden leave of at least 50% of base pay or other agreed consideration. Barred for non-exempt staff and anyone laid off or dismissed without cause. 10 business days notice. October 1, 2018 M.G.L. c.149 s.24L
Nevada Restricted by statute Barred for hourly-paid employees. Courts must narrow overbroad clauses. 2021 NRS 613.195
South Dakota Restricted by statute Maximum 2 years within a specified area. July 1, 2026 SDCL 53-9-11
Texas Restricted by statute Must be ancillary to an otherwise enforceable agreement and reasonable. Limits for physicians and health practitioners. September 1, 2025 Tex. Bus. & Com. Code 15.50
Utah Restricted by statute Post-employment non-competes capped at 1 year. May 2026 Utah Code 34-51-201
Alaska Allowed if reasonable Common-law reasonableness test. - Common law
Alabama Allowed if reasonable Reasonableness set by statute, with a 2-year presumption for employees. - Ala. Code 8-1-190
Arkansas Allowed if reasonable Statutory reasonableness test. Physician non-competes are void. 2025 Ark. Code 4-75-101
Arizona Allowed if reasonable Disfavoured and read narrowly by courts. - Common law
Connecticut Allowed if reasonable Reasonableness test. Limits for physicians. - Conn. Gen. Stat. 20-14p
Delaware Allowed if reasonable Reasonableness test. Physician non-competes are void. - 6 Del. C. 2707
Florida Allowed if reasonable Enforced more readily than elsewhere. The CHOICE Act allows non-competes and garden leave of up to 4 years for higher earners, with mandatory preliminary injunctions. July 1, 2025 Fla. Stat. 542.335; 542.41 to 542.45
Georgia Allowed if reasonable Restrictive Covenants Act, with a 2-year presumption. Courts can modify. - O.C.G.A. 13-8-50
Iowa Allowed if reasonable Reasonableness test. - Common law
Idaho Allowed if reasonable Key-employee statute with an 18-month presumption. - Idaho Code 44-2701
Indiana Allowed if reasonable Reasonableness test. New physician non-competes barred. 2025 Ind. Code 25-22.5-5.5
Kansas Allowed if reasonable Reasonableness test. Some non-solicits presumed enforceable. - Common law
Kentucky Allowed if reasonable Reasonableness test. Continued employment alone is not enough consideration. - Common law
Michigan Allowed if reasonable Reasonableness test. - MCL 445.774a
Missouri Allowed if reasonable Reasonableness test. Some non-solicits protected by statute. - RSMo 431.202
Mississippi Allowed if reasonable Reasonableness test. - Common law
Montana Allowed if reasonable Statute voids restraints, though courts apply a reasonableness test. - MCA 28-2-703
North Carolina Allowed if reasonable Must be in writing, signed and supported by consideration. - N.C.G.S. 75-4
Nebraska Allowed if reasonable In practice only customer non-solicits are enforced, and courts will not rewrite them. July 1, 2026 Common law
New Jersey Allowed if reasonable Reasonableness test. - Common law
New Mexico Allowed if reasonable Reasonableness test. Limits for healthcare practitioners. - NMSA 24A-4-1
New York Allowed if reasonable Reasonableness test. A ban bill passed the Senate in June 2026 but did not pass the Assembly. - Common law
Ohio Allowed if reasonable Reasonableness test. - Common law
Pennsylvania Allowed if reasonable Reasonableness test. Limits for healthcare practitioners. January 1, 2025 Common law; Act 74 of 2024
South Carolina Allowed if reasonable Reasonableness test. Courts will not rewrite clauses. - Common law
Vermont Allowed if reasonable Reasonableness test. - Common law
Wisconsin Allowed if reasonable Statutory test. An overbroad clause is struck out entirely. - Wis. Stat. 103.465
West Virginia Allowed if reasonable Reasonableness test. - Common law

Thresholds are indexed in several states, so check the current figure before you rely on it. Many states also have separate rules for physicians and other healthcare workers.

Canada

Ontario has banned employee non-competes since October 2021, except for C-suite executives and a sale of the business. For senior hires outside those exceptions, an employer should use a non-solicit instead. In other provinces, courts enforce only clear and reasonable restraints and typically prefer non-solicits over non-competes. Quebec requires any restraint to be written and limited in time, place and type of work. A pending federal bill would ban non-competes for federally regulated employers except the C-suite. No-poach agreements between employers are criminal under the Competition Act. Check the hire's province and coverage.

  • Ontario: employers may not enter into non-competes made on or after 25 October 2021 (Employment Standards Act, 2000, s.67.2). Exceptions: sale of a business and C-suite executives. Non-solicits are not covered by the ban.
  • Other common-law provinces: no statutory ban, though courts will not rewrite an unclear or unreasonable clause (Shafron v. KRG Insurance Brokers, 2009 SCC 6).
  • Quebec: Civil Code art. 2089. The clause must be in writing and limited in time, place and type of work, and the employer must prove it is reasonable.
  • Federal: Bill C-31 would ban non-competes for federally regulated employers such as banks, airlines and telecoms, except the C-suite. No-poach agreements between employers have been a criminal offence since June 2023.

United Kingdom

The UK still follows common law restraint of trade. A non-compete must protect a legitimate business interest and go no further than necessary. There is no statutory cap or pay threshold. For senior hires, 6 to 12 months is common and often enforceable if the interest is real. For junior or standard roles, shorter periods carry less risk. The government has said it will legislate to restrict non-competes, with a position expected in early 2027. Until then, draft restraints narrowly and be prepared to defend them if challenged.

  • Now: a non-compete is void unless it protects a legitimate interest, such as confidential information or client connections, and goes no further than necessary.
  • Reform: the government consulted on a 3-month cap and other options between November 2025 and February 2026, and said in October 2026 that it will legislate. Its position is expected in early 2027.
  • Northern Ireland: employment law is devolved, so a Great Britain law would not apply there automatically.

Ireland

Ireland relies on common law only. A non-compete is presumed void unless it protects a legitimate interest and is reasonable in duration, geography and scope. No bill or consultation is pending. For senior hires, a short, narrowly drafted restraint may stand. For most roles, a non-solicit is safer. Ask the candidate to disclose any restraint early, then test it against Irish reasonableness standards.

Australia

Australia uses common law restraint of trade, with New South Wales able to read down unreasonable restraints. A federal exposure draft from September 2026 would ban non-competes for employees earning up to the high income threshold of A$190,100 and ban co-worker non-solicits for all employees. The bill has not been introduced and the 2027 start date is not confirmed. Existing restraints would survive unless the contract is varied. For now, draft restraints that protect a genuine interest and stay within state reasonableness rules. Watch federal progress before relying on a long term.

  • Now: restraints are void unless reasonably necessary to protect a legitimate interest. Cascading clauses with step-down periods are common. In NSW, courts can read down a restraint under the Restraints of Trade Act 1976.
  • Proposed: an exposure draft bill released in September 2026 would ban non-competes for employees earning up to the high income threshold (A$190,100) and ban co-worker non-solicits for everyone. Consultation closed on 2 October 2026 and the bill has not been introduced.
  • Existing contracts: restraints signed before the start date would survive unless the contract is varied.

New Zealand

New Zealand follows common law restraint of trade. Courts can modify or remove unreasonable restraints. A member's bill to cap restraints at 6 months and require pay during the restraint has stalled since 2024, so it is not law. For senior hires, keep any non-compete short and tied to a genuine proprietary interest. Non-solicits usually face less scrutiny. Check enforceability before you rely on it.

Hiring someone with a non-compete

1. Ask for full restraint documents before offer

Request the candidate's signed employment agreement, any restrictive covenant addendum, and equity or bonus plan terms that mention non-competes. Ask which country and state or province governed the prior role. Do this at first interview, not after salary negotiation. A hidden non-compete can stall a senior hire.

2. Identify the governing law early

A restraint signed in one state or country can still be challenged where the candidate now works. If the prior role was in California, Minnesota, North Dakota, Oklahoma or Wyoming, treat the non-compete as likely unenforceable. In Ontario, check the C-suite or sale exception before relying on it.

3. Map duration and scope against local rules

For a new senior hire, keep the non-compete no longer than needed to protect a legitimate interest. In the UK, 6 to 12 months is common for senior staff. In Massachusetts, cap it at 12 months and include garden leave or other consideration. In New Zealand, courts can reduce unreasonable periods.

4. Consider a non-solicit or garden leave instead

Courts in Canada prefer non-solicits over non-competes. Ireland and Australia apply strict reasonableness tests to any non-compete. A narrowly drafted non-solicit can protect client relationships with less risk. In Massachusetts, garden leave can support a 12-month cap. Pick the least restrictive tool that works.

5. Do not rely on a stale clause or a pending bill

The FTC rule never took effect and federal bills such as the Workforce Mobility Act have not had a vote. In the UK, the government says it will legislate, yet nothing has changed. In Australia, the exposure draft is not law. Check current state or provincial rules on the hire date.

How Aristo Search handles restraints

Aristo Search asks every candidate to disclose any non-compete, non-solicit or confidentiality clause before the first client interview. We record the governing law, duration and scope, then compare that to the rules in the country and state where the new role sits. If a restraint looks enforceable or unclear, we raise it with the employer before an offer is made. This avoids late surprises and lets hiring managers plan around a candidate's obligations.

More hiring guides and tools

Sources

Questions employers ask

A candidate signed a non-compete in California. Will it stop them joining us?

Very unlikely. California voids almost all employee non-competes, including those signed out of state for California workers, and employers there had to tell affected staff. Confidentiality obligations still apply, and a clause governed by another state's law needs its own check, so ask the candidate for the agreement early.

Do we need to pay the employee during the non-compete period?

Rules differ. Massachusetts caps non-competes at 12 months and requires garden leave or other consideration. A New Zealand bill to require pay during the restraint has stalled and is not law. In the UK there is no statutory pay requirement. Check the local rule for the hire's jurisdiction before drafting.

Can we draft a non-compete for a senior hire in Ontario?

Only if the person is a C-suite executive or the restraint is part of a sale of the business. Ontario has banned employee non-competes since October 2021 outside those exceptions. For other senior roles, use a well-drafted non-solicit or confidentiality clause instead, because a non-compete will be void.

Is there a federal ban on non-competes in the US?

No. The FTC rule never took effect and the agency dropped its appeals in September 2025. Federal bills such as the Workforce Mobility Act have not had a vote. Enforcement is left to the states, where rules range from near-total bans in California to higher-earner flexibility in Florida.

What is the pay threshold in Colorado for non-competes?

Colorado bans non-competes for employees earning below $130,014 in 2026. You can only use a non-compete for workers at or above that figure. If the candidate's pay is below the threshold, use a non-solicit or confidentiality clause instead.

Are no-poach agreements with another employer legal in Canada?

No. No-poach agreements between employers are criminal under the Competition Act since June 2023. You should not agree with a competitor to not hire each other's staff, even informally. Focus on lawful non-solicit and confidentiality clauses in individual employment contracts instead.

Will the UK ban non-competes soon?

Nothing has changed in UK law yet. The government consulted from November 2025 to February 2026 and said in October 2026 that it will legislate to restrict non-competes, with a position expected in early 2027. For now, follow the existing common law test and keep restraints narrow.

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Tell us the role and where it sits. We check candidates' existing restraints early so they do not derail an offer late in the process.

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