What is the current status of noncompetes?
The FTC’s sweeping 2024 rule that would have banned nearly all noncompete agreements nationwide never took effect. Federal courts blocked it, and the FTC formally abandoned its appeal. There is currently no federal ban on noncompetes.
What about Illinois?
Non-compete agreements continue to be one of the most misunderstood areas of employment law for business owners.
Recent headlines about federal regulation led many employers to believe non-competes were banned nationwide. In reality, the situation is more nuanced. While federal regulators have attempted sweeping changes, Illinois law still primarily governs when and how non-compete agreements can be used.
For employers, understanding these rules is important. Improperly drafted or implemented agreements can become unenforceable and may even expose businesses to legal risk.
Many business owners heard headlines saying the Federal Trade Commission “banned non-competes” and assumed restrictive covenants were essentially over.
That is not what ultimately happened.
While the FTC attempted to implement a sweeping nationwide ban, that rule never took effect. Courts blocked it, the appeals process ended, and the agency later removed the rule from federal regulations. As a result, there is no nationwide prohibition on non-compete agreements in 2026.
Chicago Business Attorney Blog