Non-compete agreements have been a standard tool for protecting business interests for decades. They prevented departing employees from immediately joining competitors, taking client relationships, or leveraging proprietary knowledge against their former employer. But the legal landscape for these agreements has changed more in the past three years than in the previous thirty. The Federal Landscape The Federal Trade Commission proposed a rule in January 2023 that would have banned most non-compete agreements nationwide. The final rule, issued in April 2024, applied to all workers — including senior executives — with limited exceptions. However, in August 2024, a federal district court in Texas issued a nationwide injunction blocking the rule from taking effect, finding that the FTC lacked the statutory authority to issue such a broad prohibition. The legal challenges continue through the federal courts, and the ultimate outcome remains uncertain. But the FTC's rulemaking sent a clear signal: the federal regulatory posture toward non-competes has shifted from tolerance to skepticism. Regardless of whether the specific rule survives judicial review, the enforcement environment has changed. Even without the FTC rule, the trend at the state level is unmistakable. California has banned non-compete agreements for decades. Colorado's 2022 legislation restricts non-competes to workers earning above a specified income threshold (adjusted annually for inflation) and requires specific notice and consideration requirements. Washington's 2020 reform imposed similar income thresholds and added a presumptive duration limit of eighteen months. Minnesota, New York, and several other states have enacted or proposed significant restrictions. What Remains Enforceable Even in jurisdictions that have restricted traditional non-competes, several alternative protective mechanisms remain available and enforceable. Non-Solicitation Agreements Non-solicitation agreements restrict a departing employee from actively soliciting the company's clients, customers, or employees. These agreements are generally more enforceable than non-competes because they are narrower in scope — they do not prevent someone from working in their field but rather from specifically targeting the former employer's relationships. A well-drafted non-solicitation agreement should define the covered relationships with precision. Limiting the restriction to clients or accounts the employee actually serviced, managed, or had material contact with during a defined period is more likely to be enforced than a blanket prohibition on contacting any company client. Non-Disclosure and Confidentiality Agreements Confidentiality agreements protect proprietary information regardless of whether the employee competes directly. They prohibit the disclosure or use of trade secrets, customer data, pricing strategies, business plans, and other confidential information. Unlike non-competes, which are time-limited by design, confidentiality obligations for genuine trade secrets can extend indefinitely. The Defend Trade Secrets Act provides a federal cause of action for trade secret misappropriation, supplementing state trade secret laws. To maintain protection under these statutes, companies must demonstrate that they took reasonable measures to keep the information secret. This means implementing access controls, marking documents as confidential, including confidentiality provisions in employment agreements, and limiting the distribution of sensitive information to those with a legitimate need. Garden Leave Provisions Garden leave clauses require the employee to remain employed (and paid) during a notice period while they transition away from their responsibilities. The employee receives full compensation but is restricted from performing work — effectively creating a cooling-off period during which client relationships and competitive knowledge become less current. Garden leave is more common in financial services and executive employment but is gaining traction across industries as an alternative to traditional non-competes. Because the employee continues to receive compensation, courts generally view these provisions more favorably than unpaid non-compete periods. Forfeiture-for-Competition Clauses Some companies use equity or deferred compensation structures that include forfeiture provisions triggered by competitive activity. Under these arrangements, the employee is free to compete but forfeits unvested equity, deferred bonuses, or other financial incentives if they do. These provisions generally avoid the enforceability issues of traditional non-competes because they do not restrict the employee's ability to work — they simply attach a financial consequence to the decision to compete. Drafting for Enforceability For companies in jurisdictions where non-competes remain permissible, several drafting principles maximize the likelihood of enforcement. Scope must be reasonable. C