The federal non-compete ban is gone; California's never left
The FTC's 2024 rule banning most non-competes was set aside by a federal court and formally removed in 2026. For California employers, state law still makes most non-competes void.
Reviewed by Laurence S. Bezinover · Published
What changed
A federal court in Texas set aside the FTC's non-compete rule nationwide on August 20, 2024 (Ryan LLC v. FTC). In September 2025 the FTC dropped its appeals, and on February 12, 2026 it removed the rule from the federal regulations. The FTC now challenges non-competes case by case instead.
Why it matters in California
Nothing changes for California employers. Most employee non-competes are void under Bus. & Prof. Code § 16600, wherever they were signed (§ 16600.5), and employers may not enter into or try to enforce them.
Questions to raise with counsel
- Employers: are our California agreements free of non-competes, and do any customer non-solicitation clauses need review, since courts also treat them as void?
- Are confidentiality terms and trade secret practices protecting what a non-compete cannot?
- If we have staff in other states, which states' non-compete rules apply to them?
Sources
This briefing is general information about California law, not legal advice for your situation. Reading it does not create an attorney-client relationship.