Can You Make Your Technicians Sign a Non-Compete?

In a growing number of states, no. And where you still can, a broad non-compete for an hourly technician is the agreement most likely to fail and the one regulators are now looking at. The protection that holds up for a home-service business is narrower: a customer non-solicit limited to the people the tech actually served, a confidentiality clause for what you genuinely keep secret, and a fair agreement on training costs, each written to your state’s rules.

A non-compete is a clause that stops an employee working for a competitor, or starting their own business, for a set time and area after they leave. Whether it binds anyone is a question of state law, because there’s no federal ban.

The FTC rule is gone, but the FTC isn’t

The Federal Trade Commission’s 2024 rule, which would have banned most non-competes nationwide, never took effect. A federal court in Texas set it aside on August 20, 2024. The FTC dropped its appeals in September 2025 and formally removed the rule in February 2026. The FTC’s own page now says it “is not in effect and it is not enforceable”.

That doesn’t leave a trade employer in the clear. The FTC said it would keep going after non-competes case by case under the antitrust laws, and it has done so in a home-service trade. In April 2026 it acted against Rollins, the pest-control company. Its non-competes typically barred employees, pest-control technicians included, from the industry for two years within 75 miles of any of its locations. The final order, in June 2026, freed more than 18,000 employees. The FTC’s chairman also sent warning letters to 13 other pest-control companies.

What your state allows

For a technician paid by the hour, the answer depends heavily on the state, and the trend is toward bans and income floors. Some current examples, each read at the state’s own statute or labor department:

Several other states, including Maine, Maryland and New Hampshire, ban them for lower-paid workers. New York’s Senate has passed a statewide ban, but it isn’t law. Thresholds change every year, so check your state labor department before you rely on any of these figures.

Where a non-compete is still allowed

Even then, the state’s process rules decide whether it survives. Illinois requires you to advise the employee in writing to see a lawyer and give 14 days to review. Massachusetts caps the restriction at 12 months and requires garden leave or other agreed payment. Virginia won’t enforce one against someone you fire without cause unless you pay severance. Miss a step and the clause fails, even for a well-paid manager.

Don’t keep an unenforceable non-compete in your paperwork as a bluff, either. California treats entering into or trying to enforce a void clause as a violation the employee can sue over. Virginia fines $10,000 per violation, and that includes threatening to enforce one.

What protects the business instead of a non-compete

If the real worry is a tech taking the customers they serve, rather than working somewhere else, there are narrower tools for that. Most states treat them more kindly than a non-compete.

1. A narrow customer non-solicit. It stops the technician soliciting your customers for a limited time; it doesn’t stop them working. Keep it to the customers they actually served. The FTC’s 2025 order against Gateway Services allowed one covering only customers the employee “had direct contact” with “or personally provided service” to “in the last 12 months”. Don’t try to stop them accepting work from a customer who calls them first. Virginia’s law expressly protects that, and from 2027 Washington allows non-solicits only for customers the employee developed, for up to 18 months. Illinois requires earnings above $45,000, and California generally voids these too.
2. A confidentiality clause covering real trade secrets. Your customer list with service histories, your pricing and your maintenance-plan data can be trade secrets under the Defend Trade Secrets Act, the federal law that lets a business sue over misappropriated trade secrets. But only if you take “reasonable measures to keep such information secret”. Include the whistleblower immunity notice that 18 U.S.C. 1833(b) requires in any agreement covering confidential information. Without it, you can’t recover exemplary damages or attorney fees from that employee.

Training costs and selling the business

3. A fair training repayment agreement. If you pay for an outside certification, a separate written agreement can ask for part of it back if the tech leaves early. Keep it to the real out-of-pocket cost, state the amount up front, and reduce it month by month. Don’t charge for routine on-the-job training. Colorado limits recovery to training “distinct from normal, on-the-job training”, reducing over two years. Wyoming allows 100% under two years of service, then 66% and 33%. California and New York have each passed laws restricting these agreements. California’s applies to contracts from January 1, 2027, and New York’s has a delayed start.
4. A sale-of-business non-compete, if you ever buy or sell a company. Most ban states still allow one between the buyer and the seller, which is a different thing from restricting an employee.

The other side of this is keeping the technicians you’ve trained. Our guide to retirement plans for contractors compares one benefit that can help.

When a technician leaves

1. Collect devices and keys, and end their access to your field-service app, customer records, supplier accounts and shared drives on their last day. That’s part of the “reasonable measures” trade-secret law expects.
2. Remind them in writing of only the obligations that are valid in your state, such as confidentiality and a narrow non-solicit. Don’t cite a non-compete you couldn’t enforce.
3. Talk to a lawyer if you find real evidence that customer data was taken. A trade-secret claim rests on evidence of misuse. Under the federal law, a court order can’t stop someone taking a job just because of what they know.

The decision for your offer letter

If your techs are hourly and your state bans non-competes for them or sets an income floor they don’t reach, leave it out. If you’re in a state that still allows one, ask whether it would survive the state’s process rules and whether a narrow non-solicit would protect what you actually care about. Whatever you choose, have an employment lawyer in your state review the agreement before anyone signs it.

For the rest of the hiring paperwork, see what hiring your first employee costs, and worker classification if any of your techs work as contractors. The customer relationships worth protecting often start with maintenance plans. More is in our USA business admin guides.