Noncompete agreements have become one of the most rapidly evolving areas of employment law. Employers rely on noncompete, nonsolicitation, and confidentiality agreements (collectively, “restrictive covenant agreements”) to prevent unfair competition, safeguard customer relationships, and protect their confidential information. Whether these agreements are enforceable is largely dependent on state law, which can vary widely and change rapidly. As states increasingly limit or eliminate employers’ ability to use restrictive covenant agreements, regularly reviewing these agreements for state law compliance is essential to preserving their enforceability.

Recent developments highlight the pace of these changes. Just last week, in Tennessee, the state’s governor signed into law a new statute which prohibits noncompete agreements with employees whose annualized compensation is less than $70,000. In March 2026, Washington enacted a law, going into effect next year, which bans most noncompete agreements. Meanwhile, in New York, legislators are continuing to advance proposals that would significantly restrict or prohibit noncompetes in the employment context. These are just a few examples of ongoing efforts to limit the use of restrictive covenant agreements.

Do not be fooled into thinking that state legislatures are the only actors dictating when noncompetes (or other restrictive covenant agreements) are enforceable. In many states, enforceability of restrictive covenant agreements is wholly or largely dependent on the body of case law developed by court decisions.

Below are several high-level examples of how state statutes or court decisions may affect the enforceability of restrictive covenant agreements:

• Bans/Income Thresholds: Some states (like California) broadly prohibit noncompete agreements, with limited exceptions. Others restrict noncompetes for certain categories of workers, such as hourly or non-exempt employees, or those below specified compensation thresholds. Depending on the jurisdiction, these bans or restrictions may extend to nonsolicitation agreements or overly broad confidentiality agreements, while other states expressly exclude those agreements from statutory bans if appropriately drafted.
• Procedural and Notice Requirements: Specific notice requirements may be required as well, such as minimum review periods or notice that employees have the right to consult an attorney before signing. 
• Blue Penciling: A few state laws actually require courts to “blue pencil” (i.e., reform) overbroad restrictive covenant agreements to render them reasonable and enforceable. Other states prohibit blue penciling altogether. In other states, it may be entirely left to the court’s discretion whether to reform covenants. Or states may limit a court’s ability to reform or sever overbroad covenants. 
• Choice-of-Law: Employers sometimes attempt to rely on choice-of-law provisions tied to more employer-friendly jurisdictions. Those efforts are often unsuccessful. Many states will decline to enforce such provisions where the employee’s home state has a greater interest in the dispute or where applying another state’s law would undermine local protections. Some states explicitly prohibit the use of choice-of-law provisions that would deprive employees of statutory rights.
• What is Reasonable: Finally, state statutes and case law vary significantly in determining whether a restrictive covenant is reasonable. This includes whether the employer has a legitimate protectable interest and whether the agreement’s scope—such as its activity restrictions, geographic reach, and duration—is appropriately tailored. These considerations apply to all types of restrictive covenants, including confidentiality agreements. For example, some states require temporal limits on confidentiality obligations that do not involve trade secrets. Others require narrowly tailored definitions of “confidential information.” Similarly, nonsolicitation provisions that are not limited to customers or employees with whom the employee had recent contact may be difficult to enforce. Overly broad geographic (not limited to the employee’s territory) or role-based (not limited to the employee’s role) noncompete restrictions may face similar challenges.

These examples illustrate, at a high level, how significantly state law impacts the drafting and enforceability of restrictive covenant agreements.

If you have any questions about your restrictive covenant agreements, please contact Kayla Ernst or any member of Ice Miller's Workplace Solutions Practice Group.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader’s specific circumstances.