Non-compete agreements are clauses in employment contracts that typically limit an employee from joining or starting a competing business after leaving their job, and they have become a hot topic in recent years. In early 2024, the Federal Trade Commission (“FTC”) issued its final rule that non-compete clauses are an “unfair method of competition” and thus moved to ban most non-compete clauses nationwide. However, since its final ruling regarding non-compete clauses, it has been stalled by court challenges, most noticeably in Texas. Currently, non-competes are still mainly governed by state law and vary from state to state.
The FTC’s Attempted Ban
On April 23, 2024, the FTC issued a final rule that would have banned nearly all non-compete agreements in the U.S., with an effective date of September 4, 2024. While the rule would have required employers to void existing non-competes, that sweeping move never took effect. Legal challenges sprang up immediately, halting this new rule from going into effect.
One of the roadblocks was at the U.S. District Court for the Northern District of Texas. On August 20, 2024, the court blocked the FTC’s non-compete rule nationwide, ruling that the FTC lacked authority from Congress to enact such a broad ban.
Since these legal challenges, coupled with a change in the regulatory atmosphere, the FTC eventually pivoted away from the blanket ban and shifted toward case-by-case enforcement. In September 2025, it formally moved to end its appeals and accede to vacatur of the rule, where the agency agreed to the court’s decision. Following this change, the FTC announced a more targeted approach of case-by-case enforcement.
In practical terms, there is no nationwide ban in effect, and employers do not need to rescind all non-competes across the board. However, this uncertainty provides incentives to closely follow state laws that regulate non-compete clauses. This past year alone, nine states (including Texas) have enacted legislation narrowing the circumstances in which employers can enforce certain non-compete clauses. These state laws create different sets of standards and may be more restrictive than the federal standards that currently exist. For example, California and New York have generally banned non compete clauses applications for application. The complication arises as some work are done remotely and people’s residence change. However, few states below, we ran some analysis as to where we are.
Texas: Non-Competes Are Enforceable
Texas remains a state where non-compete agreements in employment can still be enforced, provided they meet certain requirements. Under Texas Business and Commerce Code §15.50, a non-compete clause is valid only if it is (1) ancillary to or part of an otherwise enforceable agreement at the time it is made, and (2) reasonable in time, geographic scope, and scope of activity restrained. The restriction also cannot impose a greater restraint than necessary to protect the employer’s legitimate business interests.
In practice, non-compete cases are reviewed on a case-by-case basis, applying a fact-specific analysis to determine whether the restrictions are reasonable. Courts also have the power to modify and reform overly broad non-compete clauses to make them enforceable. While this practice can save an otherwise invalid clause, this flexibility also increases the unpredictability of the court’s decision. Therefore, careful drafting and strategic planning are essential for employers seeking to rely on non-competes. (For more information, check out our previous discussion on non-compete clauses at Non-Competition Agreements – Sul Lee Law Firm.)
Earlier this year, the Texas Legislature enacted Senate Bill 1318, which amends the Texas Business and Commerce Code to further restrict the use of non-compete clauses. The new amendment, which focuses on physicians, limits the enforceability of non-compete clauses against physicians or other “health care practitioners.” Under the updated law, new requirements are being imposed, including (1) a one-year maximum duration cap, (2) a five-mile radius limitation from the primarily practiced area, and (3) a mandatory buyout option allowing the employee to purchase their release.
These changes reflect a broader trend in Texas toward closer regulation and narrower enforcement of non-compete clauses.
Georgia: Non competes are enforceable.
Georgia’s policy regarding non-compete clauses closely mirrors Texas in that the state permits such covenants only when they are narrowly tailored and supported by legitimate business interests. In 2011, Georgia enacted the Restrictive Covenants Act, which reshaped the legal standards of enforceability. The Act made restrictive covenants more readily enforceable, given that they are reasonable in scope, duration, and geographic area. Under the GRCA, a two-year duration cap with an express geographic limitation was presumed reasonable as a restrictive covenant.
However, in 2024, the Supreme Court of Georgia ruled a landmark decision in North America Senior Benefits, LLC v. Wimmer, holding that restrictive covenants no longer require an express geographic limitation to be effective. This opinion reversed existing precedents requiring a stricter standard for enforcing a non-compete covenant. The Court reasoned that the GRCA was intended to adopt a “more permissive and flexible approach” to restrictive covenants.
This decision marked a significant shift from earlier case law that demanded explicit territorial boundaries, such as counties or mile-based limits. While Wimmer provides employers with greater flexibility and reduces technical drafting pitfalls, it also illustrates how the concept of “reasonableness” remains highly fact-dependent and subject to judicial interpretation. Georgia courts retain broad discretion to assess whether a particular restraint protects legitimate interests without imposing undue hardship on the employee or harming the public.
Accordingly, employers operating in Georgia should continue to carefully tailor the scope and duration of their restrictive covenants, ensuring they correspond to the employee’s role, access to confidential information, and customer relationships. Even under this more lenient standard, overbroad or boilerplate restrictions risk partial reformation or inconsistent outcomes depending on the judge or venue. As in Texas, thoughtful drafting and clear linkage to protectable interests remain essential to achieving enforceability.
Pennsylvania: still enforceable, but with heavy discretion on courts
States have wide discretion in how they implement their standards for non-competes. Pennsylvania’s approach to non-compete agreements has been more favorable to employers in general, as Pennsylvania has no broad statutory ban on employee non-competes.
Recently, Pennsylvania courts have demonstrated their willingness to apply Pennsylvania law even in cross-state disputes. In Synthes USA Sales, LLC v. Harrison, 83 A.3d 242 (Pa. Super. Ct. 2013), the court enforced a Pennsylvania non-compete against a California resident, choosing to apply Pennsylvania’s more employer-friendly law rather than California’s statutory prohibition. The decision highlights Pennsylvania’s pro-enforcement stance and its readiness to uphold restrictive covenants when tied to Pennsylvania-based employers.
Conclusion
Non-compete enforcement varies widely by state. While Texas continues to allow non-competes but applies strict reasonableness and consideration requirements, Georgia has taken a more flexible approach under its Restrictive Covenants Act and the Wimmer decision, easing formal limits such as geographic scope. Pennsylvania, meanwhile, remains one of the most employer-friendly states, enforcing well-drafted covenants even against out-of-state employees when tied to Pennsylvania law.
Together, these differences highlight why employers should tailor non-compete agreements to each jurisdiction and consider narrower tools, such as confidentiality or non-solicitation agreements, to protect their legitimate business interests more reliably.