Yes, and the federal rule that was supposed to wipe them out has now been formally removed from the books. The FTC’s nationwide non-compete ban has been struck down in court and abandoned on appeal and removed from the Code of Federal Regulations as of February 12, 2026. Wisconsin law still governs your agreement and has not changed.
What Happened to the Federal Ban
A Texas federal court set aside the FTC’s rule in August 2024 before it ever took effect. The Commission then appealed and dropped those appeals in September 2025. After a workshop in January 2026, the FTC confirmed that it would not pursue a nationwide ban but instead challenge specific anti-competitive practices on a case-by-case basis under Section 5 of the Federal Trade Commission Act.
That enforcement is real, but narrow. The FTC finalized an order in June 2026 banning a national pest control company from enforcing non-compete clauses against thousands of workers. Most Wisconsin employers and employees will never encounter this situation.
Wisconsin’s Statute Is Already One of the Strictest in the Country
Wis. Stat. § 103.465 allows for a restrictive covenant only if the restrictions are reasonably necessary to protect the employer. The Wisconsin courts interpret this requirement narrowly, and there are five conditions that must be met:
- The restriction must protect a legitimate business interest, rather than just the employer’s disapproval of competition.
- The time limit must be reasonable.
- The geographic scope of the restriction must be reasonable.
- The restrictions must not be harsh or oppressive towards the employee.
- They must not harm the public.
If any of these conditions are not met, the covenant will be considered invalid. There is no room for partial compliance with the requirements.
One Overbroad Clause Can Void the Entire Restriction
This is where Wisconsin differs sharply from most states. Judges here can’t rewrite an unreasonable contract into a reasonable one. The law says that an unreasonable restriction is illegal, invalid, and unenforceable, even if it would have been reasonable in some respects.
Employers get one meaningful break. Under Star Direct, Inc. v. Dal Pra, genuine separate promises in the same contract can stand on their own if they are drafted so that one does not depend on the other to be understood. Covenants that cross-reference each other tend to fall together.
The Statute Covers More Than the Clause Labeled “Non-Compete”
Employers often assume that renaming a provision solves the problem, but it does not. The Wisconsin courts have applied § 103.465 to customer non-solicitation clauses, employee non-solicitations, no-hire agreements between businesses and confidentiality provisions that function as competition restraints.
Restrictions tied to the sale of a business or stockholder agreements are usually analyzed differently because the parties are treated on more equal footing in bargaining. That distinction depends on the actual relationship rather than the caption on the document.
Out-of-State Employers Cannot Draft Around It
A choice-of-law clause pointing to Illinois, Texas, or Delaware will not save an agreement covering a Wisconsin employee. Our Supreme Court has applied § 103.465 to restrictive covenants affecting Wisconsin residents, regardless of what law the contract is named under. Companies expanding into Wisconsin with their home state form of agreement routinely end up with something that is unenforceable.
One point often surprises employees: continued employment alone is enough consideration in Wisconsin. If your employer asks you to sign a non-compete clause for the job without any raise attached, that alone does not invalidate the contract.
Nothing Changed in Madison This Session
Two bills would have changed the landscape. Assembly Bill 567 would have eliminated most post-employment non-compete clauses outright. Assembly Bill 675 and Senate Bill 657 would have limited them for physicians, physician assistants, advanced practice registered nurses, and psychologists, including a provision that would void the covenant entirely if the employer terminated the practitioner.
Both failed when the 2025-2026 session ended on March 23, 2026. Section 103.465 stands as written, and the five-factor analysis that Wisconsin courts have built around it remains the whole game.
Have the Agreement Reviewed Before Anyone Files Anything
Enforceability here is determined clause by clause, based on facts specific to the job, territory, and information genuinely worth protecting. A contract that looked bulletproof when it was signed can collapse under a single overly broad phrase, and an employee who assumes the same can end up being enjoined.
The Milwaukee litigation attorneys at Kerkman & Dunn handle restrictive covenant disputes in state and federal courts, and are equally effective at resolving them through negotiation or mediation, when a lawsuit would cost more than what is recovered. Contact us to schedule a consultation.
