A national conversation around restrictive covenants began in the United States in 2023, when the FTC proposed banning nearly all non-compete agreements. It issued that ban in April 2024, prompting businesses to file lawsuits claiming the agency did not have the authority to issue such a rule. In August 2024, a judge in Texas vacated it, thus preventing the ban from going into force nationwide. The FTC appealed the decision, but the appeal remained pending through the change in presidential administration in January 2025. Months later, in September 2025, the Trump administration opted against defending the FTC’s appeal, ending the FTC’s efforts to enact the ban and leaving state law as the primary regulator of non-competes.

Enforceability of restrictive covenants varies from state to state, with California and Florida representing two very different approaches. While California is seen as “worker friendly” and prohibits nearly all non-compete agreements, Florida is increasingly being seen as “employer friendly,” passing the Contracts Honoring Opportunity, Investment, Confidentiality, and Economic Growth (CHOICE) Act in April 2025. The Act, which took effect on 1 July 2025 and is designed in part to attract employers to the state, expands the enforceability of restrictive covenants for higher-paid workers and formalizes paid non-working periods tied to non-compete agreements. Other approaches to non-competes at the state level vary quite significantly.

The United Kingdom is also scrutinizing restrictive covenants, both from a competition law perspective and potentially by imposing legal restraints on non-compete clauses in employment contracts. In April 2025, the Competition and Markets Authority (CMA) issued its first ever antitrust infringement decision in the labor market context, finding that several broadcasting companies had unlawfully shared information about freelance pay, resulting in fines totaling over £4 million (US$5.2 million). In September, it published guidance titled “Competing for Talent,” which explains how UK competition law applies to recruitment, pay setting, and other employment related practices. It details no-poach agreements (employers agreeing not to hire each other’s employees), wage-fixing agreements (employers coordinating on pay/benefits), and exchanges of competitively sensitive information about hiring or remuneration as three main categories of anti-competitive behavior.

The previous government intended to introduce a three-month time limit on non-compete arrangements in employment agreements, to promote innovation and drive growth. A working paper published in November 2025 resurrects the idea that reforming the law on non-competes would benefit the economy. The current government is asking for views on whether non-competes should be void, subject to strict time limits, only enforceable for employees earning above a pay threshold, or governed by a combination of time limits and pay thresholds. This suggests that non-compete reform is on the agenda for 2026.

China has also increased its scrutiny of non-competes. On 31 July 2025, the Supreme People’s Court (SPC) issued its “Interpretation (II) on the Application of Law in the Trial of Labour Dispute Cases,” which clarifies that non-compete clauses are only enforceable if the employee had access to the employer’s trade secrets or other confidential information related to intellectual property rights. The interpretation entered into force on 1 September 2025. Just a few days later, the Ministry of Human Resources and Social Security (MOHRSS) issued “Compliance Guidelines for Enterprises on the Implementation of Non-Compete Agreements,” which gives employers direction on drafting, interpreting, and enforcing non-competes, as well as what durations are reasonable and what compensation may be required. While employers were traditionally required to pay 30 percent of an employee’s average monthly salary during the non-compete period, local courts are tending to increase this to 50 percent. The recently implemented guidelines are designed to reduce unnecessary restrictions, protect employees’ economic benefits, encourage hiring, and support economic growth.

Meanwhile, the government of the Netherlands has been expected to submit proposals to restrict non-competes since it announced plans to do so in 2023. These would introduce a maximum one-year duration for covenants and require employers to pay compensation to the employee if they invoke a non-compete. Compensation would be set at 50 percent of the employee’s final monthly salary for each month the non-compete applies. However, there was no movement on this in 2025. A draft bill has been prepared, and there is some talk of the reforms advancing in 2026. This may progress once a new coalition government is formed.

In Singapore, the Ministry of Manpower, National Employers Federation, and National Trades Union Congress have been developing guidelines on the use of non-competes and other restrictive covenants since 2024. However, no such guidance was released in 2025. When published, the guidance is expected to formalize current case law for when non-competes are enforceable, warn employers not to overuse restrictive covenants, and act as a deterrent against employers drafting unreasonable clauses.