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Registry

Non Compete Sale of Business Rules: 51-Jurisdiction Statute Registry (2026)

What a buyer can ask a seller to sign, read from each state's own code: who counts as a seller, how long, where, and what changed in 2026.
Primary data
SMBB registry of state non-compete statutes, coded from official text
Data period
Law in force or enacted as of 2026-11-02
Latest release used
2026-11-02
Next release
Quarterly review; next check 2027-02-01
Geography
50 states and the District of Columbia
Sources
48 (44 Tier 1)
Short answer

Yes, in most states. A non compete sale of business covenant is named and allowed in the statutes of 20 of 51 jurisdictions, including California, Minnesota and North Dakota, which void most employee non-competes. 13 of the 18 jurisdictions that curb employee non-competes carve out sales. Elsewhere courts decide. The FTC rule was removed on 2026-02-12.

20 of 51jurisdictions whose statutes expressly allow or carve out a seller's non-compete[3][20][27][36]
72.2%of the 18 jurisdictions that curb employee non-competes still name a business sale as allowed (13 of 18)[3][13][32][38]
1%Washington's ownership floor, the only numeric seller threshold in any statute[36]
2026-02-12date the FTC removed its non-compete rule from the Code of Federal Regulations[41][42]

Sale-of-business non-compete registry, 50 states and DC

Checked Quarterly, and after each legislative session. Last checked 2026-11-02. Entries are neutral records of public data; each links to its source record.

StateStatutory rule for a seller's non-competeDateEvidenceSource
AlabamaExpress statutory sale-of-business exception. Seller may also agree not to solicit customers. Employee covenants allowed, 2 years or less presumed reasonable.2026-11-02agency recordRecord
AlaskaNo general statute identified (court-made law). No general non-compete statute identified in this review; enforceability of a seller's covenant rests on court decisions, which were not coded. The official code was not full-text searched for every term.2026-11-02agency recordRecord
ArizonaNo general statute identified (court-made law). Only a broadcast-employee ban was found; No general non-compete statute identified in this review; enforceability of a seller's covenant rests on court decisions, which were not coded. The official code was not full-text searched for every term.2026-11-02agency recordRecord
ArkansasEmployee-only statute; sale left to court-made law. Statute covers covenants ancillary to employment (2 years presumed reasonable). Subsection (h) says it does not apply to any agreement for the sale and purchase of a business, and existing common law standards remain in effect for those.2026-11-02agency recordRecord
CaliforniaExpress statutory sale-of-business exception. Employee non-competes void (16600, read broadly since 2024). Partners and LLC members may also agree on dissolution or exit.2026-11-02agency recordRecord
ColoradoExpress statutory sale-of-business exception. Applies to covenants entered into or renewed on or after the act's effective date (90 days after the 2025 session adjourned). 'Minority' is not defined by a number in the act.2026-11-02agency recordRecord
ConnecticutNo general statute identified (court-made law). Only a physician statute was found in the chapter opened; No general non-compete statute identified in this review; enforceability of a seller's covenant rests on court decisions, which were not coded. The official code was not full-text searched for every term.2026-11-02agency recordRecord
DelawareNo general statute identified (court-made law). No general non-compete statute identified in this review; enforceability of a seller's covenant rests on court decisions, which were not coded. The official code was not full-text searched for every term.2026-11-02agency recordRecord
District of ColumbiaExpress statutory sale-of-business exception. Definition of non-compete provision excludes a seller's promise not to compete with the buyer's business.2026-11-02agency recordRecord
FloridaExpress statutory sale-of-business exception. Presumptions are rebuttable. Employee covenants: 6 months or less presumed reasonable, more than 2 years unreasonable.2026-11-02agency recordRecord
GeorgiaExpress statutory sale-of-business exception. Signed and effective 2011-05-11 for contracts entered on and after that date. Post-employment non-competes not enforceable against employees outside sales, management, key employee or professional roles (13-8-53(a)). Tennessee's 2026 seller presumption uses the same 5-years-or-payout formula.2026-11-02agency recordRecord
HawaiiExpress statutory sale-of-business exception. Lawful unless the effect may be to substantially lessen competition or tend to create a monopoly.2026-11-02agency recordRecord
IdahoEmployee-only statute; sale left to court-made law. Statute covers key employees and key independent contractors; no sale clause.2026-11-02agency recordRecord
IllinoisExpress statutory sale-of-business exception. Employee non-competes barred at earnings of $75,000 or less, rising to $80,000 on 2027-01-01.2026-11-02agency recordRecord
IndianaNo general statute identified (court-made law). No general non-compete statute identified in this review; enforceability of a seller's covenant rests on court decisions, which were not coded. The official code was not full-text searched for every term.2026-11-02agency recordRecord
IowaNo general statute identified (court-made law). No general non-compete statute identified in this review; enforceability of a seller's covenant rests on court decisions, which were not coded. The official code was not full-text searched for every term.2026-11-02agency recordRecord
KansasGeneral statute, no sale-specific clause. Reasonable restraints are not unlawful under the Kansas Restraint of Trade Act; no clause names a seller's non-compete.2026-11-02agency recordRecord
KentuckyNo general statute identified (court-made law). No general non-compete statute identified in this review; enforceability of a seller's covenant rests on court decisions, which were not coded. The official code was not full-text searched for every term.2026-11-02agency recordRecord
LouisianaExpress statutory sale-of-business exception. Covers both non-competition and non-solicitation of the sold business's customers.2026-11-02agency recordRecord
MaineEmployee-only statute; sale left to court-made law. Bars employee non-competes at or below 400% of the federal poverty level; silent on business sales.2026-11-02agency recordRecord
MarylandEmployee-only statute; sale left to court-made law. Bars non-competes for employees earning 150% of the state minimum wage or less and some health care roles; silent on business sales.2026-11-02agency recordRecord
MassachusettsExpress statutory sale-of-business exception. 'Significant' is not defined by a number. Employee covenants capped at 12 months; non-exempt workers excluded.2026-11-02agency recordRecord
MichiganEmployee-only statute; sale left to court-made law. Statute covers employer and employee covenants only.2026-11-02agency recordRecord
MinnesotaExpress statutory sale-of-business exception. All other covenants not to compete void for employees and independent contractors since 2023-07-01.2026-11-02agency recordRecord
MississippiNo general statute identified (court-made law). No general non-compete statute identified in this review; enforceability of a seller's covenant rests on court decisions, which were not coded. The official code was not full-text searched for every term.2026-11-02agency recordRecord
MissouriEmployee-only statute; sale left to court-made law. Statute covers non-solicitation of employees, including during acquisition talks; it states it does not affect employer-employee non-competes.2026-11-02agency recordRecord
MontanaExpress statutory sale-of-business exception. Statute text voids all other restraints; how courts apply that to employees was not coded.2026-11-02agency recordRecord
NebraskaNo general statute identified (court-made law). No general non-compete statute identified in this review; enforceability of a seller's covenant rests on court decisions, which were not coded. The official code was not full-text searched for every term.2026-11-02agency recordRecord
NevadaEmployee-only statute; sale left to court-made law. Employee statute; covenants may not apply to hourly-wage employees; silent on business sales.2026-11-02agency recordRecord
New HampshireEmployee-only statute; sale left to court-made law. Opened section requires pre-offer disclosure to new employees; the low-wage section (275:70-a) was not opened.2026-11-02agency recordRecord
New JerseyNo general statute identified (court-made law). No general non-compete statute identified in this review; enforceability of a seller's covenant rests on court decisions, which were not coded. The official code was not full-text searched for every term.2026-11-02agency recordRecord
New MexicoNo general statute identified (court-made law). No general non-compete statute identified in this review; enforceability of a seller's covenant rests on court decisions, which were not coded. The official code was not full-text searched for every term.2026-11-02agency recordRecord
New YorkNo general statute identified (court-made law). No general non-compete statute identified in this review; enforceability of a seller's covenant rests on court decisions, which were not coded. The official code was not full-text searched for every term.2026-11-02agency recordRecord
North CarolinaGeneral statute, no sale-specific clause. Writing rule applies to every agreement limiting the right to do business in the state; no sale-specific clause.2026-11-02agency recordRecord
North DakotaExpress statutory sale-of-business exception. All other restraints on a lawful profession, trade or business void.2026-11-02agency recordRecord
OhioNo general statute identified (court-made law). No general non-compete statute identified in this review; enforceability of a seller's covenant rests on court decisions, which were not coded. The official code was not full-text searched for every term.2026-11-02agency recordRecord
OklahomaExpress statutory sale-of-business exception. Former employees may compete if they do not directly solicit established customers (219A). Copy is dated; later amendments not checked.2026-11-02agency recordRecord
OregonEmployee-only statute; sale left to court-made law. Employee limits (salary floor, 12-month cap) apply only to agreements made in an employment relationship and not otherwise.2026-11-02agency recordRecord
PennsylvaniaNo general statute identified (court-made law). No general non-compete statute identified in this review; enforceability of a seller's covenant rests on court decisions, which were not coded. The official code was not full-text searched for every term.2026-11-02agency recordRecord
Rhode IslandExpress statutory sale-of-business exception. Definitions section opened; the operative employee limits (28-59-3) were not opened.2026-11-02agency recordRecord
South CarolinaNo general statute identified (court-made law). No general non-compete statute identified in this review; enforceability of a seller's covenant rests on court decisions, which were not coded. The official code was not full-text searched for every term.2026-11-02agency recordRecord
South DakotaExpress statutory sale-of-business exception. Employee covenants allowed up to 2 years (53-9-11). Health care practitioner limits do not apply to a covenant effective on the sale of a practice (53-9-11.2).2026-11-02agency recordRecord
TennesseeExpress statutory sale-of-business exception. Effective 2026-07-01 for agreements entered, renewed or amended on or after that date. Employee non-competes barred under $70,000.2026-11-02agency recordRecord
TexasGeneral statute, no sale-specific clause. Criteria are exclusive and preempt common law (15.52). Physician rules in 15.50(b).2026-11-02agency recordRecord
UtahExpress statutory sale-of-business exception. Employee covenants capped at 1 year; health care worker covenants barred from 2026-05-06 except in a sale.2026-11-02agency recordRecord
VermontNo general statute identified (court-made law). No general non-compete statute identified in this review; enforceability of a seller's covenant rests on court decisions, which were not coded. The official code was not full-text searched for every term.2026-11-02agency recordRecord
VirginiaEmployee-only statute; sale left to court-made law. Bars covenants with low-wage employees and health care professionals; a sale carve-out exists only for health care professionals' businesses.2026-11-02agency recordRecord
WashingtonExpress statutory sale-of-business exception. From 2027-06-30 all other noncompetition covenants are void (2026 c 149); the 1% sale exclusion is kept.2026-11-02agency recordRecord
West VirginiaNo general statute identified (court-made law). No general non-compete statute identified in this review; enforceability of a seller's covenant rests on court decisions, which were not coded. The official code was not full-text searched for every term.2026-11-02agency recordRecord
WisconsinEmployee-only statute; sale left to court-made law. Statute covers covenants by an assistant, servant or agent with an employer or principal.2026-11-02agency recordRecord
WyomingExpress statutory sale-of-business exception. Applies to contracts entered on and after 2025-07-01. Other non-competes on labor void except trade secrets, training costs and executive or management staff.2026-11-02agency recordRecord

20 jurisdictions write a non compete sale of business exception into statute

Coding all 51 jurisdictions from statute text gives four groups. 20 name the sale covenant, 3 have a general covenant statute with no sale clause, 11 regulate employees only and 17 have no general statute identified.

How each state's statute treats a seller's non-compete

4 = express sale-of-business exception; 3 = general statute, no sale clause; 2 = employee-only statute; 1 = no statute identified.

How each state's statute treats a seller's non-competeUS tile map: 20 jurisdictions have an express sale-of-business exception in statute, 3 have a general statute with no sale clause, 11 have employee-only statutes and 17 have no statute identified.AK: 1AK1ME: 2ME2VT: 1VT1NH: 2NH2WA: 4WA4ID: 2ID2MT: 4MT4ND: 4ND4MN: 4MN4IL: 4IL4WI: 2WI2MI: 2MI2NY: 1NY1RI: 4RI4MA: 4MA4OR: 2OR2NV: 2NV2WY: 4WY4SD: 4SD4IA: 1IA1IN: 1IN1OH: 1OH1PA: 1PA1NJ: 1NJ1CT: 1CT1CA: 4CA4UT: 4UT4CO: 4CO4NE: 1NE1MO: 2MO2KY: 1KY1WV: 1WV1VA: 2VA2MD: 2MD2DE: 1DE1AZ: 1AZ1NM: 1NM1KS: 3KS3AR: 2AR2TN: 4TN4NC: 3NC3SC: 1SC1DC: 4DC4OK: 4OK4LA: 4LA4MS: 1MS1AL: 4AL4GA: 4GA4HI: 4HI4TX: 3TX3FL: 4FL4PR1 to 11 to 22 to 22 to 44 to 44 to 4rule level

Source: SMBB registry coded from state statutes, checked 2026-11-02.

The 20 express jurisdictions fall into two kinds. Most use an exception to a rule that would otherwise void the covenant: Alabama, Louisiana, Montana, North Dakota, Oklahoma and South Dakota keep older civil-code wording about a person who sells goodwill, and California extends that wording to owners of entities, and Minnesota, the District of Columbia, Illinois, Massachusetts, Rhode Island, Washington, Colorado, Utah and Wyoming wrote the sale out of newer employee laws. Florida, Georgia and Tennessee instead give the sale covenant its own presumption of reasonable length.

Hawaii places the exception in its antitrust law: HRS 480-4(c)(1) makes it lawful for the transferor of a business to agree not to compete within a reasonable area and period, unless the effect may be to substantially lessen competition.

Jurisdictions by statutory rule for seller non-competes

50 states plus DC

Jurisdictions by statutory rule for seller non-competesBar chart: 20 express exception, 3 general statute, 11 employee-only, 17 no statute.0510.015.020.025.0jurisdictions20.0Express exception3General statute11.0Employee-only statute17.0No statute

Source: SMBB registry, checked 2026-11-02.

Jurisdictions and small employer firms by statutory rule Download CSV
RuleJurisdictionsFirms under 20 employees (state counts, 2022)Share of small-firm state countsShare of all firm state countsJurisdictions
Express statutory sale-of-business exception202,638,25246.1%45.5%Alabama, California, Colorado, District of Columbia, Florida, Georgia, Hawaii, Illinois, Louisiana, Massachusetts, Minnesota, Montana, North Dakota, Oklahoma, Rhode Island, South Dakota, Tennessee, Utah, Washington, Wyoming
General statute, no sale-specific clause3655,07311.4%11.5%Kansas, North Carolina, Texas
Employee-only statute; sale left to court-made law11861,09615.0%15.3%Arkansas, Idaho, Maryland, Maine, Michigan, Missouri, New Hampshire, Nevada, Oregon, Virginia, Wisconsin
No general statute identified (court-made law)171,574,32627.5%27.7%Alaska, Arizona, Connecticut, Delaware, Iowa, Indiana, Kentucky, Mississippi, Nebraska, New Jersey, New Mexico, New York, Ohio, Pennsylvania, South Carolina, Vermont, West Virginia

Census SUSB 2022 state files count a multi-state firm once in each state, so the 51 state sums (5,728,747 small firms) exceed the U.S. total (5,720,093).

Source: [44] U.S. Census Bureau

Non-compete in a sale of business: A promise by the seller of a business, or of an ownership interest in it, not to run or join a similar business in a defined area for a defined time after closing, given to protect the goodwill the buyer paid for.

13 of 18 states that curb employee non-competes still let a buyer bind the seller

Of the 18 jurisdictions whose statutes void employee non-competes for all workers or for a pay, hourly or role class, 13 name the business sale as allowed. The other 5 are silent on general sales.

Employee-restricting jurisdictions: does the statute name a business sale?

18 jurisdictions whose statutes void employee non-competes for all or a class of workers

Employee-restricting jurisdictions: does the statute name a business sale?Bar chart: 13 of 18 employee-restricting jurisdictions name a business sale in statute; 5 are silent.0510.015.0jurisdictions13.0Sale named in statute5Statute silent on sales

Source: SMBB registry, checked 2026-11-02.

18 jurisdictions that curb employee non-competes, and how each treats a business sale Download CSV
StateCitationStatute expressly allows a sale covenantSeller coveredNote
CaliforniaCal. Bus. & Prof. Code 16600, 16601, 16602, 16602.5YesSeller of goodwill; any owner selling or disposing of all of his or her ownership interest; owner of an entity selling all or substantially all operating assets with goodwillEmployee non-competes void (16600, read broadly since 2024). Partners and LLC members may also agree on dissolution or exit.
ColoradoC.R.S. 8-2-113(3)(c) as amended by SB 25-083 (signed 2025-06-03)YesOwner of an interest in the business, in a sale of the business, of a direct or indirect ownership share, or of all or substantially all assetsApplies to covenants entered into or renewed on or after the act's effective date (90 days after the 2025 session adjourned). 'Minority' is not defined by a number in the act.
District of ColumbiaD.C. Code 32-581.01(15)(A)YesSeller of a business, in an agreement with one or more buyersDefinition of non-compete provision excludes a seller's promise not to compete with the buyer's business.
GeorgiaHB 30 (2011), Act 99, enacting O.C.G.A. 13-8-50 to 13-8-59 (13-8-51(16), (17); 13-8-52(a)(6); 13-8-57(d))YesSeller: owner of a controlling interest, an executive employee who receives consideration in connection with the sale, or an affiliate of a controlling ownerSigned and effective 2011-05-11 for contracts entered on and after that date. Post-employment non-competes not enforceable against employees outside sales, management, key employee or professional roles (13-8-53(a)). Tennessee's 2026 seller presumption uses the same 5-years-or-payout formula.
Illinois820 ILCS 90/5, 90/10YesPerson purchasing or selling the goodwill of a business or acquiring or disposing of an ownership interestEmployee non-competes barred at earnings of $75,000 or less, rising to $80,000 on 2027-01-01.
MassachusettsM.G.L. c. 149, s. 24L(a)YesSignificant owner, member or partner who will receive significant consideration or benefit from the sale'Significant' is not defined by a number. Employee covenants capped at 12 months; non-exempt workers excluded.
MarylandMd. Code, Lab. & Empl. 3-716NoStatute silent on salesBars non-competes for employees earning 150% of the state minimum wage or less and some health care roles; silent on business sales.
Maine26 M.R.S. 599-ANoStatute silent on salesBars employee non-competes at or below 400% of the federal poverty level; silent on business sales.
MinnesotaMinn. Stat. 181.988, subd. 2(b)(1)YesPerson selling the business and the partners, members or shareholdersAll other covenants not to compete void for employees and independent contractors since 2023-07-01.
MontanaMCA 28-2-703, 28-2-704, 28-2-705YesPerson who sells the goodwill of a businessStatute text voids all other restraints; how courts apply that to employees was not coded.
North DakotaN.D.C.C. 9-08-06(1)YesPerson that sells the goodwill of a business and that person's partners, members or shareholdersAll other restraints on a lawful profession, trade or business void.
NevadaNRS 613.195NoStatute silent on salesEmployee statute; covenants may not apply to hourly-wage employees; silent on business sales.
Oklahoma15 O.S. 217, 218, 219AYesOne who sells the goodwill of a businessFormer employees may compete if they do not directly solicit established customers (219A). Copy is dated; later amendments not checked.
OregonORS 653.295NoStatute silent on salesEmployee limits (salary floor, 12-month cap) apply only to agreements made in an employment relationship and not otherwise.
TennesseeTenn. Code 50-1-210(b)(3), 50-1-211 (Pub. Ch. 934, 2026)YesOwner or seller of all or a material part of business assets, shares, a partnership or LLC interest, or other equityEffective 2026-07-01 for agreements entered, renewed or amended on or after that date. Employee non-competes barred under $70,000.
VirginiaVa. Code 40.1-28.7:8NoHealth care professionals only (sale carve-out in subsection H)Bars covenants with low-wage employees and health care professionals; a sale carve-out exists only for health care professionals' businesses.
WashingtonRCW 49.62.010(4)(d); 49.62.010(3)(e)(iv) from 2027-06-30YesPerson buying or selling goodwill or acquiring or disposing of an ownership interest of 1% or more of the businessFrom 2027-06-30 all other noncompetition covenants are void (2026 c 149); the 1% sale exclusion is kept.
WyomingW.S. 1-23-108(a)(i) (2025 SF0107, Enrolled Act 87)YesCovenant in a contract for the purchase and sale of a business or the assets of a businessApplies to contracts entered on and after 2025-07-01. Other non-competes on labor void except trade secrets, training costs and executive or management staff.

Employee restriction = statute voids non-competes for all workers or for a class defined by pay, hourly status or role. Sector-only laws (health care, broadcasting, technology) are not counted. New Hampshire and Rhode Island are left out because their operative sections were not opened.

Source: [3][4][9][6][13][18][17][16][20][23][27][24][28][29][32][35][36][38] California Legislative Information; Colorado General Assembly; Council of the District of Columbia; Georgia General Assembly (document service); Illinois General Assembly; Massachusetts Legislature; Maryland General Assembly; Maine Legislature; Minnesota Revisor of Statutes; Montana Legislature; North Dakota Legislative Branch; Nevada Legislature; Oklahoma State Senate; Oregon State Legislature; Tennessee Secretary of State; Virginia Legislative Information System; Washington State Legislature; Wyoming Legislature

Silence is not a ban. Maine, Maryland, Nevada and Virginia frame their limits around employers and employees, and Oregon says its main limits apply only to agreements made in an employment relationship and not otherwise. A seller who is not becoming an employee falls outside that text, but the registry does not code how courts in those states treat a seller who stays on under an employment contract.

Only Washington puts a number on how much a seller must own

Statutes describe the protected seller in eight different ways. Washington alone sets a percentage, at 1% of the business.

Who counts as a seller in the 19 express-exception statutes Download CSV
StateWho qualifiesOwnership or value conditionCitation
AlabamaOne who sells the good will of a businessNone statedAla. Code 8-1-190(b)(3), 8-1-192
CaliforniaSeller of goodwill; any owner selling or disposing of all of his or her ownership interest; owner of an entity selling all or substantially all operating assets with goodwillAll of the owner's interest (entity owners)Cal. Bus. & Prof. Code 16600, 16601, 16602, 16602.5
ColoradoOwner of an interest in the business, in a sale of the business, of a direct or indirect ownership share, or of all or substantially all assetsOwner of an interest; formula cap for minority owners paid in equityC.R.S. 8-2-113(3)(c) as amended by SB 25-083 (signed 2025-06-03)
District of ColumbiaSeller of a business, in an agreement with one or more buyersNone statedD.C. Code 32-581.01(15)(A)
FloridaSeller of all or part of business assets, corporate shares, a partnership interest, an LLC membership or any other equity interestAll or a partFla. Stat. 542.335(1)(a), (1)(d)3.
GeorgiaSeller: owner of a controlling interest, an executive employee who receives consideration in connection with the sale, or an affiliate of a controlling ownerControlling interest, or executive employee receiving considerationHB 30 (2011), Act 99, enacting O.C.G.A. 13-8-50 to 13-8-59 (13-8-51(16), (17); 13-8-52(a)(6); 13-8-57(d))
HawaiiTransferor of a businessNone statedHRS 480-4(c)(1)
IllinoisPerson purchasing or selling the goodwill of a business or acquiring or disposing of an ownership interestNone stated820 ILCS 90/5, 90/10
LouisianaAny person, including a corporation and its individual shareholders, who sells the goodwill of a business; seller or other interested partyNone statedLa. R.S. 23:921(B)
MassachusettsSignificant owner, member or partner who will receive significant consideration or benefit from the saleSignificant consideration or benefitM.G.L. c. 149, s. 24L(a)
MinnesotaPerson selling the business and the partners, members or shareholdersNone statedMinn. Stat. 181.988, subd. 2(b)(1)
MontanaPerson who sells the goodwill of a businessNone statedMCA 28-2-703, 28-2-704, 28-2-705
North DakotaPerson that sells the goodwill of a business and that person's partners, members or shareholdersNone statedN.D.C.C. 9-08-06(1)
OklahomaOne who sells the goodwill of a businessNone stated15 O.S. 217, 218, 219A
Rhode IslandSignificant owner, member or partner who will receive significant consideration or benefit from the saleSignificant consideration or benefitR.I. Gen. Laws 28-59-2
South DakotaAny person who sells the good will of a businessNone statedSDCL 53-9-8, 53-9-9
TennesseeOwner or seller of all or a material part of business assets, shares, a partnership or LLC interest, or other equityAll or a material partTenn. Code 50-1-210(b)(3), 50-1-211 (Pub. Ch. 934, 2026)
UtahIndividual who receives value related to the sale of the businessValue received from the saleUtah Code 34-51-201, 34-51-202(1)(b)
WashingtonPerson buying or selling goodwill or acquiring or disposing of an ownership interest of 1% or more of the business1% or more of the businessRCW 49.62.010(4)(d); 49.62.010(3)(e)(iv) from 2027-06-30
WyomingCovenant in a contract for the purchase and sale of a business or the assets of a businessNone statedW.S. 1-23-108(a)(i) (2025 SF0107, Enrolled Act 87)

Washington is the only statute that sets a numeric floor. Georgia requires a controlling interest; Colorado limits covenants for minority owners who received equity as compensation.

Source: [1][3][4][9][10][6][11][13][15][18][20][23][27][28][30][31][32][34][36][38] Alabama Legislature (code data feed behind alison.legislature.state.al.us); California Legislative Information; Colorado General Assembly; Council of the District of Columbia; Florida Legislature; Georgia General Assembly (document service); Hawaii State Legislature; Illinois General Assembly; Louisiana State Legislature; Massachusetts Legislature; Minnesota Revisor of Statutes; Montana Legislature; North Dakota Legislative Branch; Oklahoma State Senate; Rhode Island General Assembly; South Dakota Legislature; Tennessee Secretary of State; Utah State Legislature; Washington State Legislature; Wyoming Legislature

  • Seller of goodwill: Alabama, Louisiana, Montana, North Dakota, Oklahoma and South Dakota use this older wording; North Dakota and Minnesota extend it to the seller's partners, members or shareholders.
  • Owner disposing of all of his or her interest: California requires an entity owner to dispose of the whole interest, or the entity to sell all or substantially all operating assets with goodwill.
  • Significant owner with significant consideration: Massachusetts and Rhode Island, with no number attached.
  • Controlling interest: Georgia defines a seller as the owner of a controlling interest, an executive employee who receives consideration in connection with the sale, or an affiliate of a controlling owner.
  • Any owner of an interest, with a formula for some minority owners: Colorado covers direct or indirect ownership shares, but for a minority owner who received the share as equity compensation or for services, the covenant in years may not exceed the sale consideration divided by average annualized cash compensation over the prior 2 years.
  • Any ownership share of 1% or more: Washington.
  • Value received: Utah applies the exception if the individual receives value related to the sale.
  • All or a part, or all or a material part: Florida and Tennessee reach sellers of assets, shares, partnership or LLC interests and other equity.

The FTC's 2023 proposal would have limited its sale exception to owners of at least 25 percent; the final rule text published in 2024 dropped the percentage. Neither is in force.

A small office conference table with closed folders and a pen.
Illustrative photograph. Generated image, not a specific project.

Five statutes put a number of years on a seller's restraint, and Colorado uses a formula

Alabama, Louisiana, Florida, Georgia and Tennessee state years in the text; the reference points run from 1 year to 7 years. Colorado ties the cap for some minority owners to their sale proceeds. Elsewhere the length must be reasonable or is not addressed.

The years written into sale-of-business statutes

Reference points in statute text; Georgia and Tennessee also allow the payout period if longer

The years written into sale-of-business statutesHorizontal bar chart: Alabama presumes 1 year reasonable, Louisiana caps at 2 years, Florida presumes 3 years reasonable and more than 7 unreasonable, Georgia and Tennessee presume 5 years or the payout period reasonable.yearsAlabama: presumed reasonable up to1Louisiana: hard cap2Florida: presumed reasonable up to3Georgia: presumed reasonable up to5Tennessee: presumed reasonable up to5Florida: presumed unreasonable beyond7

Source: Ala. Code 8-1-190; La. R.S. 23:921; Fla. Stat. 542.335; Ga. HB 30 (2011); Tenn. Pub. Ch. 934 (2026).

Numbers and maps written into sale-of-business statutes Download CSV
StateCitationDuration ruleYears (reference point)Area rule
AlabamaAla. Code 8-1-190(b)(3)1 year or less presumed reasonable1Specified geographic area
LouisianaLa. R.S. 23:921(B)Not to exceed 2 years from the date of sale2Specified parishes or municipalities
FloridaFla. Stat. 542.335(1)(d)3.3 years or less presumed reasonable3Reasonable in time, area and line of business
FloridaFla. Stat. 542.335(1)(d)3.More than 7 years presumed unreasonable7Reasonable in time, area and line of business
GeorgiaO.C.G.A. 13-8-57(d) (HB 30, 2011)Longer of 5 years or the payout period presumed reasonable5Reasonable geographic area
TennesseeTenn. Code 50-1-210(b)(3)Longer of 5 years or the payout period presumed reasonable5None stated
ColoradoC.R.S. 8-2-113(3)(c) (SB 25-083)Minority owners paid in equity: sale consideration divided by average annual cash compensationNone stated
MontanaMCA 28-2-704(2)None statedCity or county of principal office and adjacent counties
Oklahoma15 O.S. 218None statedSpecified county and contiguous counties, or a city or town
South DakotaSDCL 53-9-9None statedSpecified county, city or other area

Five statutes state a number of years and Colorado sets a formula. Minnesota, North Dakota and Hawaii require a reasonable time and area without numbers.

Source: [1][15][10][6][32][4][23][28][31] Alabama Legislature (code data feed behind alison.legislature.state.al.us); Louisiana State Legislature; Florida Legislature; Georgia General Assembly (document service); Tennessee Secretary of State; Colorado General Assembly; Montana Legislature; Oklahoma State Senate; South Dakota Legislature

Louisiana is the only fixed hard cap: 2 years from the date of sale. Alabama, Florida, Georgia and Tennessee use rebuttable presumptions, so a longer term is not void on its face. Georgia (since 2011) and Tennessee (since 2026-07-01) tie the presumption to the deal structure: the longer of 5 years or the period during which payments are made to the seller, which matters for seller notes and earnouts. Colorado's 2025 rule is a formula cap for a minority owner who received equity as compensation or for services: total consideration from the sale divided by average annualized cash compensation, including ownership income, over the prior 2 years or the affiliation period if shorter.

Four statutes also draw the map. Louisiana requires named parishes or municipalities, Montana limits the area to the city or county of the principal office and adjacent areas, Oklahoma uses a county and its contiguous counties, and South Dakota a county, city or other specified area. Alabama, California, Louisiana, Montana, North Dakota, Oklahoma and South Dakota also condition the covenant on the buyer carrying on a like business in the area.

In 28 states a seller's covenant is left to judges

17 jurisdictions have no general non-compete statute identified and 11 have statutes covering employees only. Together they hold a large share of small employer firms.

Where small employer firms sit, by statutory rule

Share of state counts of firms with fewer than 20 employees, 2022

Where small employer firms sit, by statutory ruleHorizontal bar chart: 46.1% of small-firm state counts are in express-exception jurisdictions, 27.5% in no-statute states, 15.0% employee-only and 11.4% general statute.percentExpress exception46.1No statute27.5Employee-only statute15.0General statute11.4

Source: U.S. Census Bureau SUSB 2022; SMBB registry.

Using Census SUSB 2022 state counts, 46.1% of firms with fewer than 20 employees (2,638,252 firm-state counts) are in the 20 express-exception jurisdictions and 27.5% are in the 17 states with no statute identified. New York, Pennsylvania, Ohio and New Jersey are in the no-statute group.

Three states have general statutes that reach sale covenants without naming them. Texas Business and Commerce Code 15.50 applies one test to every covenant: it must be ancillary to an otherwise enforceable agreement and reasonable in time, area and scope, and 15.52 makes those criteria exclusive. North Carolina G.S. 75-4 makes any agreement limiting the right to do business in the state unenforceable unless it is in writing and signed by the person bound. Kansas K.S.A. 50-163 treats reasonable restraints as lawful and conclusively presumes an owner's written non-solicitation covenant enforceable for up to 4 years.

Where the code is silent, the governing-law clause in the purchase agreement and the state where the business operates both matter. The registry does not code which law a court would apply.

The FTC non-compete rule is gone from the federal code

The FTC's own rule page says the rule is not in effect and not enforceable, and a final rule published 2026-02-12 removed it from the Code of Federal Regulations.

Dated changes, 2011 to 2027 Download CSV
DateChangeCitationSource
2011-05-11Georgia Restrictive Covenants Act (HB 30) signed and effective, with the 5-years-or-payout seller presumptionAct 99Georgia General Assembly
2023-01-19FTC proposes rule; sale exception limited to owners of at least 25 percent88 FR 3482Federal Register
2023-07-01Minnesota 181.988 takes effect for new contractsLaws 2023, c. 53Minnesota Revisor
2024-05-07FTC final rule published with a sale exception and no percentage89 FR 38342Federal Register
2024-08-20District court order stops FTC enforcementFTC rule pageFTC
2025-06-03Colorado SB 25-083 signed: formula cap for minority owners paid in equitySB 25-083Colorado General Assembly
2025-07-01Wyoming 1-23-108 applies to new contractsEnrolled Act 87Wyoming Legislature
2025-09-05FTC votes 3-1 to dismiss appeals and accede to vacatur91 FR 6507Federal Register
2026-02-12FTC removes 16 CFR part 910 from the CFR91 FR 6507Federal Register
2026-05-06Utah health care non-compete ban begins; sale exception keptUtah Code 34-51-202Utah Legislature
2026-07-01Tennessee sale presumption (5 years or payout) and $70,000 employee floor take effectPub. Ch. 934 (HB 1034)Tennessee Secretary of State
2027-01-01Illinois employee floor rises to $80,000820 ILCS 90/10Illinois General Assembly
2027-06-30Washington voids all other noncompetition covenants; 1% sale exclusion kept2026 c 149Washington Legislature

Dates as stated in the official text opened.

Source: [6][4][43][21][40][39][38][41][34][32][13][36] Georgia General Assembly (document service); Colorado General Assembly; Federal Register; Minnesota Revisor of Statutes; Federal Register; Federal Trade Commission; Wyoming Legislature; Federal Register; Utah State Legislature; Tennessee Secretary of State; Illinois General Assembly; Washington State Legislature

The rule would have exempted a non-compete entered into under a bona fide sale of a business entity, of the person's ownership interest, or of all or substantially all operating assets. A district court stopped enforcement on 2024-08-20. On 2025-09-05 the Commission voted 3-1 to dismiss its appeals and accede to vacatur, and the removal notice at 91 FR 6507 took effect 2026-02-12. On 2026-11-02 the current eCFR Title 16 structure lists Parts 910-999 as reserved.

Washington, Tennessee and Utah rewrote their rules in 2026

Three 2026 enactments change what sellers in those states can be asked to sign, and all three keep a sale-of-business path.

  • Washington (2026 c 149): from 2027-06-30 all noncompetition covenants are void, including existing ones; the exclusion for a person buying or selling goodwill or an ownership interest of 1% or more remains.
  • Tennessee (Public Chapter 934): from 2026-07-01 a seller's covenant is presumed reasonable up to the longer of 5 years or the payout period, and employee non-competes are barred below $70,000 of annualized compensation.
  • Utah (Chapter 341, 2026 General Session): health care non-competes are barred from 2026-05-06, but a covenant related to the sale of a business survives if the individual receives value from the sale.

Wyoming's 2025 act (1-23-108) and Minnesota's 2023 statute (181.988) are the other recent bans, and both kept the sale covenant. Colorado's SB 25-083, signed 2025-06-03, kept its sale exception but added a formula cap for minority owners who received equity as compensation.

A white service van parked outside a small workshop.
Illustrative photograph. Generated image, not a specific project.

What the statute text says to check in a buyer's draft covenant

The coded fields map to the questions a seller can raise when a letter of intent or purchase agreement includes a non-compete. This is a description of statute text, not legal advice.

  • Who signs: does the statute protect only a seller of goodwill or of the whole interest (California), or any owner of 1% or more (Washington)?
  • How long: is there a cap (Louisiana), a formula (Colorado, for minority owners paid in equity) or a presumption (Alabama, Florida, Georgia, Tennessee), and does a seller note or earnout extend it (Georgia, Tennessee)?
  • Where: does the statute require named counties, parishes or cities (Louisiana, Montana, Oklahoma, South Dakota)?
  • Form: is a signed writing required (Alabama, Florida, North Carolina) or consideration tied to the sale (Massachusetts, Rhode Island, Utah)?
  • Employment after closing: if the seller stays on as an employee, a separate employee covenant may fall under the state's employee rules, such as pay floors in Illinois or Tennessee.

All 51 jurisdictions, coded from statute text

Every row cites the statute or session law opened, the copy used and a confidence level. Archived copies are labelled with their capture date.

Sale-of-business non-compete rules: 51-jurisdiction registry Download CSV
Show all 51 rows
StateRuleWho qualifies as sellerStatutory durationStatutory geographyFormalitiesRestricts employee non-competesCitationConfidenceCopy usedChecked
AlabamaExpress statutory sale-of-business exceptionOne who sells the good will of a businessRestraints of 1 year or less presumed reasonableSpecified geographic area while the buyer carries on a like businessWriting signed by all parties; adequate considerationNoAla. Code 8-1-190(b)(3), 8-1-192clear textlive (legislature code data feed)2026-11-02
AlaskaNo general statute identified (court-made law)n/an/an/an/aNoNone identifiedinterpretation neededcode portal2026-11-02
ArizonaNo general statute identified (court-made law)n/an/an/an/aNoNone general (A.R.S. 23-494 covers broadcast employees only)interpretation neededlive2026-11-02
ArkansasEmployee-only statute; sale left to court-made lawn/an/an/an/aNoAct 921 of 2015 (SB 998), section 1 (act text numbers the section 4-70-207; commonly cited as Ark. Code 4-75-101, not confirmed in an official code copy)clear textlive (Act 921 PDF from the legislature's 2015 SB 998 bill page)2026-11-02
CaliforniaExpress statutory sale-of-business exceptionSeller of goodwill; any owner selling or disposing of all of his or her ownership interest; owner of an entity selling all or substantially all operating assets with goodwillNone statedSpecified geographic area where the business was carried on, while the buyer carries on a like businessNone statedYesCal. Bus. & Prof. Code 16600, 16601, 16602, 16602.5clear textInternet Archive copy of official page (16601: 2025-05-01; 16600: 2026-09-29)2026-11-02
ColoradoExpress statutory sale-of-business exceptionOwner of an interest in the business, in a sale of the business, of a direct or indirect ownership share, or of all or substantially all assetsFor a minority owner who received the share as equity compensation or for services: years may not exceed total sale consideration divided by average annualized cash compensation over the prior 2 years (or affiliation period if shorter)None statedWorker notice rules in 8-2-113(4); application to sellers not codedYesC.R.S. 8-2-113(3)(c) as amended by SB 25-083 (signed 2025-06-03)clear textlive (SB 25-083 final act text and scanned signed act, bill files 86218 and 40988)2026-11-02
ConnecticutNo general statute identified (court-made law)n/an/an/an/aNoNone general (C.G.S. 20-14p covers physicians)interpretation neededlive2026-11-02
DelawareNo general statute identified (court-made law)n/an/an/an/aNoNone identifiedinterpretation neededcode portal2026-11-02
District of ColumbiaExpress statutory sale-of-business exceptionSeller of a business, in an agreement with one or more buyersNone statedNone statedNone statedYesD.C. Code 32-581.01(15)(A)clear textlive2026-11-02
FloridaExpress statutory sale-of-business exceptionSeller of all or part of business assets, corporate shares, a partnership interest, an LLC membership or any other equity interest3 years or less presumed reasonable; more than 7 years presumed unreasonableReasonable in time, area and line of businessWriting signed by the person against whom enforcement is soughtNoFla. Stat. 542.335(1)(a), (1)(d)3.clear textlive (2026 Florida Statutes)2026-11-02
GeorgiaExpress statutory sale-of-business exceptionSeller: owner of a controlling interest, an executive employee who receives consideration in connection with the sale, or an affiliate of a controlling ownerLonger of 5 years or the period payments are made to the seller presumed reasonable; longer presumed unreasonableReasonable in time, geographic area and scope (13-8-53(a))None stated for sellersYesHB 30 (2011), Act 99, enacting O.C.G.A. 13-8-50 to 13-8-59 (13-8-51(16), (17); 13-8-52(a)(6); 13-8-57(d))clear textsession law as passed House and Senate (2011), legislature document service; later amendments not checked2026-11-02
HawaiiExpress statutory sale-of-business exceptionTransferor of a businessReasonable period of timeReasonable areaNone statedNoHRS 480-4(c)(1)clear textInternet Archive copy of official page (2026-09-29)2026-11-02
IdahoEmployee-only statute; sale left to court-made lawn/an/an/an/aNoIdaho Code 44-2701interpretation neededInternet Archive copy of official page (2026-09-29)2026-11-02
IllinoisExpress statutory sale-of-business exceptionPerson purchasing or selling the goodwill of a business or acquiring or disposing of an ownership interestNone statedNone statedNone statedYes820 ILCS 90/5, 90/10clear textInternet Archive copy of official page (2025-04-24)2026-11-02
IndianaNo general statute identified (court-made law)n/an/an/an/aNoNone identifiedinterpretation neededcode portal2026-11-02
IowaNo general statute identified (court-made law)n/an/an/an/aNoNone identifiedinterpretation neededcode portal2026-11-02
KansasGeneral statute, no sale-specific clauseOwner of a business entity (non-solicitation covenants only)Owner non-solicitation covenants up to 4 years after the owner's relationship ends conclusively presumed enforceableNone statedWriting (for the presumptions)NoK.S.A. 50-163(b), (c)interpretation neededlive2026-11-02
KentuckyNo general statute identified (court-made law)n/an/an/an/aNoNone identifiedinterpretation neededcode portal2026-11-02
LouisianaExpress statutory sale-of-business exceptionAny person, including a corporation and its individual shareholders, who sells the goodwill of a business; seller or other interested partyNot to exceed 2 years from the date of saleSpecified parishes or municipalities, or parts of them, while the buyer carries on a like businessNone statedNoLa. R.S. 23:921(B)clear textlive2026-11-02
MaineEmployee-only statute; sale left to court-made lawn/an/an/an/aYes26 M.R.S. 599-Ainterpretation neededlive2026-11-02
MarylandEmployee-only statute; sale left to court-made lawn/an/an/an/aYesMd. Code, Lab. & Empl. 3-716interpretation neededlive2026-11-02
MassachusettsExpress statutory sale-of-business exceptionSignificant owner, member or partner who will receive significant consideration or benefit from the saleNone stated for sale covenantsNone statedSignificant consideration or benefitYesM.G.L. c. 149, s. 24L(a)clear textInternet Archive copy of official page (2026-09-29)2026-11-02
MichiganEmployee-only statute; sale left to court-made lawn/an/an/an/aNoMCL 445.774ainterpretation neededInternet Archive copy of official page (2026-04-17)2026-11-02
MinnesotaExpress statutory sale-of-business exceptionPerson selling the business and the partners, members or shareholdersReasonable length of timeReasonable geographic areaTemporary and geographically restrictedYesMinn. Stat. 181.988, subd. 2(b)(1)clear textlive2026-11-02
MississippiNo general statute identified (court-made law)n/an/an/an/aNoNone identifiedinterpretation neededcode portal2026-11-02
MissouriEmployee-only statute; sale left to court-made lawn/an/an/an/aNoRSMo 431.202interpretation neededlive2026-11-02
MontanaExpress statutory sale-of-business exceptionPerson who sells the goodwill of a businessNone statedCity or county of the principal office, adjacent counties or cities in adjacent counties, or a combinationNone statedYesMCA 28-2-703, 28-2-704, 28-2-705clear textlive (MCA 2025)2026-11-02
NebraskaNo general statute identified (court-made law)n/an/an/an/aNoNone identifiedinterpretation neededcode portal (timed out)2026-11-02
NevadaEmployee-only statute; sale left to court-made lawn/an/an/an/aYesNRS 613.195interpretation neededInternet Archive copy of official page (2026-10-22)2026-11-02
New HampshireEmployee-only statute; sale left to court-made lawn/an/an/an/aNot verifiedRSA 275:70interpretation neededInternet Archive copy of official page (2026-09-29)2026-11-02
New JerseyNo general statute identified (court-made law)n/an/an/an/aNoNone identifiedinterpretation neededcode portal (timed out)2026-11-02
New MexicoNo general statute identified (court-made law)n/an/an/an/aNoNone identifiedinterpretation neededcode portal2026-11-02
New YorkNo general statute identified (court-made law)n/an/an/an/aNoNone identifiedinterpretation neededcode portal (403)2026-11-02
North CarolinaGeneral statute, no sale-specific clauseAny person whose right to do business in the state is limitedNone statedNone statedWriting signed by the party who agrees not to competeNoN.C.G.S. 75-4clear textInternet Archive copy of official page (2025-02-06)2026-11-02
North DakotaExpress statutory sale-of-business exceptionPerson that sells the goodwill of a business and that person's partners, members or shareholdersReasonable length of timeReasonable geographic area, while the buyer carries on a like businessNone statedYesN.D.C.C. 9-08-06(1)clear textlive2026-11-02
OhioNo general statute identified (court-made law)n/an/an/an/aNoNone identifiedinterpretation neededcode portal (timed out)2026-11-02
OklahomaExpress statutory sale-of-business exceptionOne who sells the goodwill of a businessNone statedSpecified county and contiguous counties, or a city or town; an overbroad area is cut back to the primary county and contiguous countiesNone statedYes15 O.S. 217, 218, 219Aclear textOklahoma Senate compilation of Title 15 (December 2019 file)2026-11-02
OregonEmployee-only statute; sale left to court-made lawn/an/an/an/aYesORS 653.295interpretation neededInternet Archive copy of official page (2026-10-24)2026-11-02
PennsylvaniaNo general statute identified (court-made law)n/an/an/an/aNoNone identifiedinterpretation neededcode portal2026-11-02
Rhode IslandExpress statutory sale-of-business exceptionSignificant owner, member or partner who will receive significant consideration or benefit from the saleNone statedNone statedSignificant consideration or benefitNot verifiedR.I. Gen. Laws 28-59-2clear textInternet Archive copy of official page (2026-07-10)2026-11-02
South CarolinaNo general statute identified (court-made law)n/an/an/an/aNoNone identifiedinterpretation neededcode portal2026-11-02
South DakotaExpress statutory sale-of-business exceptionAny person who sells the good will of a businessNone statedSpecified county, city or other specified area, while the buyer carries on a like businessNone statedNoSDCL 53-9-8, 53-9-9clear textlive2026-11-02
TennesseeExpress statutory sale-of-business exceptionOwner or seller of all or a material part of business assets, shares, a partnership or LLC interest, or other equityLonger of 5 years or the period payments are made to the seller presumed reasonable; longer presumed unreasonableNone statedNone statedYesTenn. Code 50-1-210(b)(3), 50-1-211 (Pub. Ch. 934, 2026)clear textInternet Archive copy of public chapter (2026-05-14)2026-11-02
TexasGeneral statute, no sale-specific clauseAny promisor; no seller clauseReasonable timeReasonable geographic area and scopeAncillary to or part of an otherwise enforceable agreementNoTex. Bus. & Com. Code 15.50, 15.52clear textlive (legislative resources host)2026-11-02
UtahExpress statutory sale-of-business exceptionIndividual who receives value related to the sale of the businessNone stated for sale covenantsNone statedValue received from the saleNoUtah Code 34-51-201, 34-51-202(1)(b)clear textlive (chapter PDF)2026-11-02
VermontNo general statute identified (court-made law)n/an/an/an/aNoNone identifiedinterpretation neededcode portal2026-11-02
VirginiaEmployee-only statute; sale left to court-made lawHealth care professionals only (sale carve-out in subsection H)n/an/an/aYesVa. Code 40.1-28.7:8interpretation neededlive2026-11-02
WashingtonExpress statutory sale-of-business exceptionPerson buying or selling goodwill or acquiring or disposing of an ownership interest of 1% or more of the businessNone stated for sale covenantsNone statedNone statedYesRCW 49.62.010(4)(d); 49.62.010(3)(e)(iv) from 2027-06-30clear textlive2026-11-02
West VirginiaNo general statute identified (court-made law)n/an/an/an/aNoNone identifiedinterpretation neededcode portal (403)2026-11-02
WisconsinEmployee-only statute; sale left to court-made lawn/an/an/an/aNoWis. Stat. 103.465interpretation neededInternet Archive copy of official page (2026-09-29)2026-11-02
WyomingExpress statutory sale-of-business exceptionCovenant in a contract for the purchase and sale of a business or the assets of a businessNone statedNone statedNone statedYesW.S. 1-23-108(a)(i) (2025 SF0107, Enrolled Act 87)clear textlive (enrolled act)2026-11-02

Coded only from statute or session-law text opened on the date checked. 'n/a' means the statute is silent or no statute was found. Court decisions are not coded.

Source: [1][2][7][3][4][8][9][10][6][11][12][13][14][15][16][17][18][19][20][22][23][24][25][26][27][28][29][30][31][32][33][34][35][36][37][38] Alabama Legislature (code data feed behind alison.legislature.state.al.us); Arizona Legislature; Arkansas State Legislature; California Legislative Information; Colorado General Assembly; Connecticut General Assembly; Council of the District of Columbia; Florida Legislature; Georgia General Assembly (document service); Hawaii State Legislature; Idaho Legislature; Illinois General Assembly; Kansas Office of Revisor of Statutes; Louisiana State Legislature; Maine Legislature; Maryland General Assembly; Massachusetts Legislature; Michigan Legislature; Minnesota Revisor of Statutes; Missouri Revisor of Statutes; Montana Legislature; Nevada Legislature; New Hampshire General Court; North Carolina General Assembly; North Dakota Legislative Branch; Oklahoma State Senate; Oregon State Legislature; Rhode Island General Assembly; South Dakota Legislature; Tennessee Secretary of State; Texas Legislative Council; Utah State Legislature; Virginia Legislative Information System; Washington State Legislature; Wisconsin Legislature; Wyoming Legislature

Counts and distributions

Registry category counts

Formulacount of registry rows by category

Inputs: fact sheet rows 1 to 51 (fact sheet rows)

Result: 20 express, 3 general statute, 11 employee-only, 17 no statute

Express rules cluster in the West, the Plains and the states that recently curbed employee covenants; most of the Northeast outside Massachusetts and Rhode Island has no statute identified.

Limitations: Court decisions are not coded; a no-statute state can still have settled case law.

Sale carve-out rate among employee-restricting jurisdictions

Formulajurisdictions with an employee restriction and an express sale rule / jurisdictions with an employee restriction

Inputs: fact sheet rows 1 to 51 (employee restriction and category fields) (fact sheet rows)

Result: 13 / 18 = 72.2%

Legislatures that ban employee covenants nearly always protect the buyer of a business; the exceptions are states that wrote narrow employee statutes.

Limitations: New Hampshire and Rhode Island excluded because their operative employee sections were not opened; the class definition excludes sector-only laws.

Numeric ownership floors

Formulacount of express rows whose seller definition sets a percentage

Inputs: fact sheet rows 1 to 51 (fact sheet rows)

Result: 1 (Washington, 1%)

Minority sellers are protected by vaguer tests elsewhere: significant owner (Massachusetts, Rhode Island) or value received (Utah).

Limitations: Georgia's controlling-interest test and Colorado's minority-owner formula are thresholds without a percentage.

Statutes with a number of years

Formulacount of rows whose duration field states years

Inputs: fact sheet rows 1 to 51 (fact sheet rows)

Result: 5 (Alabama, Louisiana, Florida, Georgia, Tennessee); reference points 1, 2, 3, 5 and 7 years; plus a Colorado formula cap

A seller in most states cannot read a maximum term off the statute.

Limitations: Georgia coded from the 2011 session law; later amendments not checked.

Small-firm share in express-exception jurisdictions

Formulasum of state counts of firms under 20 employees in the express group / sum across 51 jurisdictions

Inputs: fact sheet rows 1 to 51 and row 65 (fact sheet rows)

Result: 2,638,252 / 5,728,747 = 46.1%

Fewer than half of small employer firms are in states where the code itself answers whether a seller's covenant is allowed.

Limitations: State firm counts include each multi-state firm once per state; 2022 data; employer firms only.

Small-firm share in no-statute states

Formulasame as d5 for the no-statute group

Inputs: as d5 (fact sheet rows)

Result: 1,574,326 / 5,728,747 = 27.5%

More than a quarter of small-firm counts sit where only case law governs.

Limitations: As d5.

Download the calculations (CSV)

Key findings

  1. 20 of 51 jurisdictions have statute text that expressly allows or carves out a non-compete given by the seller of a business (registry checked 2026-11-02).[1][3][10][15][20]
  2. 13 of 18 jurisdictions that void employee non-competes for all or a class of workers name the business sale as an exception (72.2%).[3][4][9][13][18][32]
  3. California Business and Professions Code 16601 lets a seller of goodwill, or an owner disposing of all of his or her ownership interest, agree not to compete within the area where the business was carried on.[3]
  4. Minnesota Statute 181.988 has voided covenants not to compete for contracts entered on or after 2023-07-01, except during the sale or dissolution of a business.[20][21]
  5. Louisiana R.S. 23:921(B) caps a seller's covenant at 2 years from the date of sale and requires the area to be listed by parish or municipality.[15]
  6. Florida Statute 542.335 presumes a seller's covenant of 3 years or less reasonable and one of more than 7 years unreasonable, and requires a writing signed by the person bound.[10]
  7. Alabama Code 8-1-190(b)(3) presumes a seller restraint of 1 year or less reasonable, and 8-1-192 requires a signed writing and adequate consideration.[1]
  8. Georgia's 2011 Restrictive Covenants Act (HB 30, O.C.G.A. 13-8-57(d)) presumes a seller covenant reasonable for the longer of 5 years or the period payments are made, and defines a seller as an owner of a controlling interest, an executive employee receiving sale consideration, or an affiliate.[6]
  9. Colorado C.R.S. 8-2-113(3)(c), as amended by SB 25-083 (signed 2025-06-03), limits a covenant for a minority owner paid in equity to sale consideration divided by average annualized cash compensation, in years.[4]
  10. Arkansas Act 921 of 2015 states that its covenant rules do not apply to an agreement for the sale and purchase of a business, which stays under existing common law.[7]
  11. Tennessee Code 50-1-210(b)(3), effective 2026-07-01, presumes reasonable the longer of 5 years or the period payments are made to the seller.[32]
  12. Washington RCW 49.62.010 excludes a sale covenant only if the signer buys or sells 1% or more of the business; from 2027-06-30 all other noncompetition covenants are void.[36]
  13. Massachusetts and Rhode Island limit the sale exclusion to a significant owner, member or partner who receives significant consideration, without defining a percentage.[18][30]
  14. Montana MCA 28-2-704 limits a seller's covenant to the city or county of the principal office and adjacent counties or cities in them.[23]
  15. Oklahoma 15 O.S. 218 limits a seller's covenant to a specified county and contiguous counties, or a city or town, and cuts back a wider area.[28]
  16. In 28 jurisdictions no statute sets a rule for a seller's non-compete (Arkansas's statute expressly leaves sale covenants to common law), so the outcome depends on court decisions not coded here.[16][17][29][35]
  17. The FTC rule published 2024-05-07 at 89 FR 38342 was removed from the CFR effective 2026-02-12 after the FTC acceded to vacatur.[40][41][39]

Executive summary

  • 20 of 51 jurisdictions write a business-sale non-compete into statute, either as an exception to a ban or as a named category with its own rules.
  • 13 of the 18 jurisdictions that void employee non-competes for all or a class of workers expressly keep the sale covenant; Maine, Maryland, Nevada, Oregon and Virginia restrict employees but say nothing about general business sales.
  • Only 5 statutes put a number of years on how long a seller can be bound: Alabama (1 year presumed reasonable), Louisiana (2-year cap), Florida (3 years presumed reasonable, more than 7 presumed unreasonable), and Georgia since 2011 and Tennessee from 2026-07-01 (both the longer of 5 years or the payout period). Colorado caps some minority owners by formula.
  • Washington is the only state that sets a numeric ownership floor: the sale exclusion applies to a person who sells 1% or more of the business, and it survives the state's full ban that starts 2027-06-30.
  • In 28 jurisdictions the seller's covenant is left to judges: 17 have no general non-compete statute identified and 11 have statutes that cover employees only.
  • 46.1% of state counts of employer firms with fewer than 20 employees sit in the 20 express-exception jurisdictions (Census SUSB 2022).
  • The FTC's 2024 rule, which also exempted bona fide business sales, is not in effect; the FTC removed it from the federal code effective 2026-02-12.

Questions people ask

Can I be forced to sign a non-compete when I sell my business?

No statute requires a seller to sign one; it is a negotiated term. What statutes do is decide whether the promise will be enforced. In 20 jurisdictions the code expressly allows a seller's covenant, so a buyer can make it a condition of the deal and expect it to hold if it meets the statute's limits. Confirm terms with an attorney.

Is a non-compete enforceable in California after selling a business?

Yes, within limits. Cal. Bus. & Prof. Code 16601 allows a person who sells the goodwill of a business, or an owner who disposes of all of his or her ownership interest, to agree not to carry on a similar business within the area where the business was carried on, so long as the buyer carries on a like business there. Section 16600 voids employee non-competes.

How long can a non-compete last after the sale of a business?

Only 5 statutes give a number of years. Louisiana caps it at 2 years from the date of sale. Alabama presumes 1 year or less reasonable, Florida presumes 3 years or less reasonable and more than 7 years unreasonable, and Georgia and Tennessee (from 2026-07-01) presume reasonable the longer of 5 years or the period the seller is being paid. Colorado caps some minority owners by a formula.

Is the FTC non-compete ban in effect?

No. The FTC's rule page says the rule is not in effect and not enforceable, and a final rule published in the Federal Register on 2026-02-12 (91 FR 6507) removed it from the Code of Federal Regulations. State law governs.

Frequently asked questions

Which states expressly allow a non-compete in the sale of a business?

20 jurisdictions: Alabama, California, Colorado, the District of Columbia, Florida, Georgia, Hawaii, Illinois, Louisiana, Massachusetts, Minnesota, Montana, North Dakota, Oklahoma, Rhode Island, South Dakota, Tennessee, Utah, Washington and Wyoming (registry checked 2026-11-02).

Does Minnesota's non-compete ban apply when I sell my business?

No. Minn. Stat. 181.988 voids covenants not to compete but makes a covenant agreed upon during the sale of a business valid if it is temporary and limited to a reasonable area and length of time. The ban applies to contracts entered on or after 2023-07-01.

Does Washington's 2027 non-compete ban cover business sales?

No, if the signer buys or sells an ownership interest of 1% or more. RCW 49.62.010 keeps that exclusion in the version effective 2027-06-30, when all other noncompetition covenants become void.

What does Tennessee's 2026 law change for sellers?

Public Chapter 934, effective 2026-07-01, presumes a covenant against the owner or seller of all or a material part of a business reasonable for the longer of 5 years or the period payments are made to the seller. It also bars employee non-competes under $70,000.

Is a minority owner covered by the sale exception?

It depends on the state's wording. Washington covers owners of 1% or more; Georgia requires a controlling interest unless the seller is an executive employee receiving sale consideration; Colorado covers any owner but caps the covenant for a minority owner paid in equity by a formula; Massachusetts and Rhode Island require a significant owner who receives significant consideration; California requires an entity owner to dispose of all of his or her interest; Utah requires value received from the sale.

Does a seller's non-compete have to be in writing?

In Alabama, Florida and North Carolina the statute requires a signed writing. Alabama also requires adequate consideration (8-1-192). Other statutes are silent on form.

Can a statute limit where the seller may not compete?

Yes. Louisiana requires named parishes or municipalities, Montana limits the area to the city or county of the principal office and adjacent areas, Oklahoma uses a county and contiguous counties, and South Dakota a county, city or other specified area.

What if my state has no non-compete statute?

In 17 jurisdictions no general statute was identified, including New York, Pennsylvania, Ohio and New Jersey. Courts decide enforceability case by case. This registry does not code those decisions; confirm with an attorney.

Did the FTC rule have a sale-of-business exception?

Yes. The 2024 final rule did not apply to a non-compete entered into under a bona fide sale of a business entity, of the person's ownership interest, or of all or substantially all operating assets. The 2023 proposal had limited it to owners of at least 25 percent. The rule was removed effective 2026-02-12.

How often is this registry checked?

Quarterly and after each legislative session. The last full check was 2026-11-02; the next is planned for 2027-02-01.

Download the data

Every table in this report is available as a CSV under CC BY 4.0. The fact sheet lists each value with its source URL and access date.

For journalists and researchers

If you cite only a few, cite these

  1. 13 of 18 employee-restricting jurisdictions carve out business sales (72.2%).[3][20][32]
  2. Washington's 1% ownership floor is the only numeric seller threshold in any state statute.[36]
  3. Tennessee presumes a seller covenant reasonable for the longer of 5 years or the payout period from 2026-07-01.[32]

Most quotable statistics

  • 20 of 51 U.S. jurisdictions expressly allow a seller's non-compete in statute (SMBB registry, 2026-11-02).[3][20][27]
  • 13 of 18 jurisdictions that void employee non-competes still carve out business sales (72.2%).[3][13][36]
  • Washington is the only state that sets a numeric ownership floor for the sale exception: 1% of the business.[36]
  • Only 5 state statutes put a number of years on a seller's non-compete; Louisiana's 2-year cap is the only fixed hard limit.[15][1][10][6][32]
  • The FTC removed its non-compete rule from the Code of Federal Regulations effective 2026-02-12.[41]
  • 46.1% of state counts of employer firms with fewer than 20 employees are in jurisdictions with an express statutory sale exception (Census SUSB 2022).[44]

Press summary

A new registry from Sell My Business Broker codes every state and the District of Columbia from statute text to answer what a business buyer can ask a seller to sign. 20 of 51 jurisdictions expressly allow a seller's non-compete in their codes, and 13 of the 18 jurisdictions that void employee non-competes still carve out business sales (72.2%). Only five statutes state a number of years: Alabama presumes 1 year reasonable, Louisiana caps the covenant at 2 years, Florida presumes 3 years reasonable and more than 7 unreasonable, and Georgia and, from July 2026, Tennessee presume the longer of 5 years or the payout period reasonable. Washington is the only state with a numeric ownership floor, 1%, and keeps it when its full ban starts in June 2027. In 28 jurisdictions the code is silent and courts decide. The FTC removed its 2024 non-compete rule from the federal code on February 12, 2026.

Suggested headlines

  • 20 states write a seller's non-compete into law; 17 leave it to judges
  • States that ban non-competes still protect business buyers: 13 of 18 carve out sales
  • Washington's 1% rule is the only ownership floor for seller non-competes
  • Only five states put a number of years on a business seller's non-compete
  • With the FTC rule gone, state codes decide what a business seller can be asked to sign

How to cite this report

Sell My Business Broker. (2026). Non Compete Sale of Business Rules: 51-Jurisdiction Statute Registry (2026). Retrieved from https://sellmybusinessbroker.com/research/noncompete-sale-of-business-by-state/

Reuse license

Data and tables are licensed CC BY 4.0. Attribution: “Source: Sell My Business Broker, Non Compete Sale of Business Rules: 51-Jurisdiction Statute Registry (2026)” with a link to this page.

Reproduce this analysis

Every figure comes from the files below. The scripts that pulled and computed them are kept with the report and can be re-run.

DatasetPublisherSourceQuery or filterRows usedRetrieved
State non-compete and restraint-of-trade statutes (official pages and archived captures)State legislatures and code publishersFile or endpointgeneral restraint-of-trade and non-compete sections; sale, goodwill and ownership-interest clauses51 jurisdictions, all coded2026-11-02
Alabama Code sections 8-1-190 to 8-1-192Alabama LegislatureFile or endpointcodeOfAlabamaSection, displayId 8-1-190, 8-1-191, 8-1-1923 sections2026-11-02
Statistics of U.S. Businesses 2022, state by enterprise sizeU.S. Census BureauFile or endpointNAICS '–'; ENTRSIZE 01 and 33; STATE 01 to 56 plus 00102 state rows plus 2 national rows2026-11-02
FTC Non-Compete Clause Rule documentsFederal Register and FTCFile or endpointdocuments 2023-00414, 2024-09171, 2026-02866; FTC rule page; eCFR Title 16 structure4 documents2026-11-02

Data quality and exclusions

  • 51 jurisdictions coded. Georgia and Arkansas were coded from enacted session laws because their codes are published through a commercial host; the codified section numbers are as stated in the acts.
  • 13 jurisdictions were coded from Internet Archive captures of the official URL because the live site timed out or returned 403; capture dates are in the Copy used column and raw/ia_snapshots.csv.
  • Oklahoma was coded from a December 2019 Senate compilation; the live code host blocked automated access, so later amendments were not checked.
  • Colorado was coded from the SB 25-083 final act text; the signed act is a scanned image, and an OCR check of its page 3 matched the sale-of-business wording.
  • 17 no-statute rows are marked interpretation needed; official codes were not full-text searched for every term.
  • 2 jurisdictions (New Hampshire, Rhode Island) excluded from the employee-restriction count because operative sections were not opened.
  • SUSB state counts: no suppressed cells for the all-industry rows used; 51 state rows summed.

Methodology

Selection: all 50 states and the District of Columbia. For each, we opened the state's general restraint-of-trade or non-compete statute on the legislature's or code publisher's official site and coded only what the text says. Where the live official page blocked automated access or timed out, we used an Internet Archive capture of the same official URL and recorded the capture date. Session laws were used for Georgia (HB 30 of 2011, from the legislature's document service), Arkansas (Act 921 of 2015), Colorado (SB 25-083, final act text checked against the scanned signed act), Tennessee (Public Chapter 934) and Wyoming (Enrolled Act 87).

Inclusion rules: a jurisdiction is 'express' if its statute names a sale of a business, of goodwill or of an ownership interest as an allowed covenant or as an exclusion from a ban. 'General statute' means a statute that governs covenants generally without a sale clause. 'Employee-only' means the statute regulates employer and employee covenants only. 'No statute identified' means no general statute was found; these rows are coded 'interpretation needed' because court decisions control and were not coded. Health care, broadcast and technology-only statutes do not change a row.

Employee restriction: a jurisdiction counts if its statute voids employee non-competes for all workers or for a class defined by pay, hourly status or role. Duration caps alone do not count. New Hampshire and Rhode Island are left out of that count because their operative employee sections were not opened.

Conflicts: law firm surveys and articles were read only to find statutes to open and are Tier 3 context. Where a secondary source described a change, the row was coded only after the official act was opened.

Derived metrics: category counts, the carve-out rate and statutory year reference points are computed in scripts/compute.py and build_tables.py from scripts/registry_data.py. Firm shares use Census SUSB 2022 state files (all industries, enterprise size class 33, fewer than 20 employees), summing state counts; because a multi-state firm is counted in each state, the denominator exceeds the U.S. total.

Limitations and update: statute text only, no case law, no choice-of-law analysis. Last update 2026-11-02. Brokers and owners who want help with a sale can use the broker match form.

This report presents published data with its limitations. It is not legal, financial or investment advice.

Sources, ranked by quality

Tier 1: primary and official sources (44)

Tier 3: journalism and expert commentary (4)