Multiple States Refine Non-Compete, Non-Solicitation Laws Ahead 2025

Recent developments in restrictive covenant laws across several U.S. states reveal a trend toward refining and often tightening regulations on non-compete and non-solicitation agreements. Kansas Senate Bill 241, effective July 1, 2025, clarifies that non-solicitation agreements are enforceable when protecting employer interests like trade secrets or limited to two years post-employment, with courts mandated to modify overly broad covenants. Other states such as Virginia, Florida, New Jersey, and Colorado are also updating their laws, reflecting a nationwide shift towards more restrictions on these agreements. Concurrently, the Federal Trade Commission under Chair Andrew Ferguson, appointed by President Trump, is poised not to defend the previous noncompete ban, which aimed to protect workers’ economic freedom but faced legal challenges asserting lack of statutory authority. This federal rollback contrasts with state-level efforts to regulate non-compete agreements and signals an ongoing legal tug-of-war over workers’ rights and employer protections. Employers and legal professionals must stay informed of these evolving multistate regulations to navigate compliance effectively.