The federal ban everyone heard about never took effect, and New York still has no statewide ban either. But a bill moving through Albany could change that specifically for healthcare workers. Here is where things actually stand.
Non-compete agreements have been in the news so much that most business owners are not sure what is even true anymore. You may have heard the federal government banned them. You may have heard New York did too. Neither of those is the law right now, and acting on the wrong assumption can cost you.
Here is the honest state of play. A non-compete agreement in New York is still generally enforceable in 2026, as long as it is reasonable, but the ground is shifting under everyone’s feet. A federal ban was struck down, a state ban was vetoed, and a new state bill, aimed in part at healthcare workers, is working its way through Albany. Here is what each of those means for you.
The Current Landscape In One Look
Before the details, here is where the three big moving pieces stand as of 2026:
- Federal FTC ban: finalized in 2024, struck down in court, and abandoned by the FTC in 2025. It never took effect.
- New York statewide ban: passed the legislature in 2023, vetoed by the Governor. Not law.
- New York’s current rule: non-competes are enforceable if reasonable, under long-standing state common law.
So nothing has been banned, but a new bill is pending that could change the picture, especially for healthcare. That combination is exactly why there is so much confusion, and why the details below matter.
Is A Non-Compete Agreement In New York Enforceable In 2026?
Yes. As of 2026, non-compete agreements are enforceable in New York if they meet the state’s reasonableness standard. New York has no statewide ban, so these clauses are governed by long-standing common law that courts have applied for decades.
To hold up, a non-compete generally has to protect a legitimate business interest, be reasonable in how long it lasts and the geographic area it covers, avoid placing undue hardship on the worker, and not harm the public.
Courts do not rubber-stamp them; an overly broad non-compete that locks someone out of their profession will often get struck down or narrowed. So “enforceable” does not mean “anything goes.”
It means a carefully drawn, reasonable non-compete stands, while an aggressive one may not. Getting that balance right is where solid drafting matters, and our non-compete and non-solicit agreements in New York cover what that looks like.
What Is The Difference Between A Non-Compete And A Non-Solicit Agreement In New York?
A non-compete stops a worker from taking a competing job or starting a competing business, usually within a set time and area. A non-solicit is narrower; it does not stop someone from working for a competitor at all; it just stops them from taking your clients or your staff with them when they go.
That difference matters a lot in practice. Courts scrutinize non-competes heavily because they can block someone from earning a living. A New York non-solicit agreement faces lighter scrutiny because it protects your client relationships and team without shutting the person out of their field.
For many practices, a well-written non-solicit does most of the real protecting with far less legal risk, which is why they are often the smarter tool. A strong set of underlying agreements ties this together, and our business contracts in New York page walks through the foundation.
Did The FTC Non-Compete Ban Affect New York Employers?
No. The FTC non-compete ban never took effect in New York or anywhere else. The FTC finalized a rule in 2024 that would have banned nearly all non-competes nationwide, but a federal court struck it down before its effective date, ruling the agency overstepped its authority. In 2025, the FTC dropped its appeal, ending the effort.
So if you are a New York employer who worried you had to tear up your agreements because of the FTC, you did not, and you do not. The failed federal rule changed nothing about your existing contracts.
You can follow the FTC’s own statement on the outcome through its press release on the non-compete rule. What governs your non-competes today is New York state law, not any federal ban, which is why the pending state bill below is the thing actually worth watching.
Can A Therapist Or Healthcare Provider Be Bound By A Non-Compete In New York?
Right now, yes. A therapist or other healthcare provider in New York can currently be bound by a non-compete, as long as it meets the same reasonableness standard that applies to everyone else. There is no blanket carve-out for healthcare workers in current law.
Here is the part to watch closely, though. A bill moving through the New York legislature in 2026 would specifically ban non-competes for “health-related professionals,” along with most other workers. If it becomes law, healthcare providers like therapists could be freed from non-competes going forward, and the healthcare non-compete in New York could look very different than it does today.
It is not law yet, and it is uncertain whether it will be signed, so for now the reasonableness standard still governs. But anyone in healthcare signing or enforcing one should know the rules may change. If your situation is really about employment terms, our employment agreements for medical and wellness practices page covers that side.
How Long Can A Non-Compete Clause Last In New York?
New York law does not set a single fixed maximum, because the question is always reasonableness rather than a hard number. In practice, courts tend to accept shorter restrictions, often around six months to two years, and grow more skeptical the longer the clause runs. A six-month non-compete is far easier to enforce than a five-year one.
Duration is judged alongside the other factors, not on its own. A one-year restriction covering a small geographic area to protect a real business interest looks reasonable; the same one year covering the entire state to block someone from their whole profession may not.
Notably, the pending 2026 bill would cap permitted non-competes at one year, a sign of where the state is leaning. So the safe approach today is to keep any non-compete as short and narrow as it can be while still protecting what genuinely needs protecting.
A Practical Way To Think About It In 2026
If you are drafting or signing a non-compete in New York right now, hold two ideas at once. First, non-competes are still enforceable today when reasonable, so they are not empty, and you cannot ignore one you signed. Second, the law is clearly trending toward tighter limits, especially for healthcare, so building your protection entirely around a broad non-compete is a shaky long-term bet.
The steadier move for most practices is to lean on narrower tools like non-solicits and confidentiality terms that protect your real interests and face less legal risk, and to keep any non-compete modest enough to survive both today’s reasonableness test and tomorrow’s likely limits. Build for where the law is going, not just where it is.
The Bottom Line
A non-compete agreement in New York is enforceable in 2026 if it is reasonable in time, geography, and scope, protects a legitimate interest, and does not unfairly burden the worker. The FTC’s federal ban never took effect, and New York has no statewide ban yet, but a pending bill could soon restrict non-competes broadly and bar them for healthcare professionals.
For now, reasonable non-competes hold up, narrower non-solicits are often the smarter tool, and anyone in healthcare should watch the law closely before relying on one.
Need Help With A Non-Compete Or Non-Solicit?
J. Cameron Law, PLLC helps New York businesses and healthcare practices draft and review non-compete and non-solicit agreements that protect what matters without crossing the lines courts will not enforce.
Whether you are hiring, being asked to sign, or trying to figure out whether an old agreement still holds up as the law shifts, the right guidance keeps you protected and out of avoidable trouble.
