An independent contractor in the United States can be asked to sign a non-compete. Whether the clause can bind you is decided by state law, not federal law. There is no federal non-compete rule operating: the Federal Trade Commission states that its Noncompete Rule "is not in effect and it is not enforceable", after a district court order on 20 August 2024 stopped the FTC enforcing it (Federal Trade Commission), checked 14 September 2026. States diverge sharply. California's Business and Professions Code § 16600 provides that "Except as provided in this chapter, every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void" (California Legislative Information). Another state may treat the same wording very differently, so the governing-law clause in your contract is where the answer starts.
The position below is United States federal and California law and reflects the Federal Trade Commission and California Legislative Information, current at October 2026. It is general information, not legal, tax or financial advice. Rules vary by country and by state, and they change, so take advice on your own situation.
Can an independent contractor be asked to sign a non-compete?
Yes. Nothing about working through your own company, invoicing per project or filing as a business puts you outside ordinary contract law. A restraint clause is drafted, offered and signed the same way any other commercial term is, and a client is free to put one in front of you.
What changes is where the clause turns up. Contractors rarely receive a document marked "non-compete". The restraint sits in a master services agreement, in a schedule attached to a statement of work, or in supplier portal terms accepted with a tick box. Reading only the SOW and skipping the framework agreement above it is the common way people sign restraints they do not know about, which is why it is worth being deliberate about what a freelance agreement should include before the first invoice goes out.
Being asked is not the same as being bound, and being bound is not the same as the clause surviving a challenge. Those are three separate questions, and only the third turns on the law of a particular state.
Is a non-compete enforceable against a contractor in the US?
There is no single American answer, because there is no national rule to give one. Each state sets its own position through statute and case law, and those positions are genuinely different from each other rather than variations on a theme. A clause that is void where you sit may operate normally two states over.
California is the clearest published example. Section 16600 of the Business and Professions Code provides that "Except as provided in this chapter, every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void" (California Legislative Information). The wording reaches any "profession, trade, or business", and the section was amended with effect from 1 January 2024. It carries its own exceptions, which is what "except as provided in this chapter" signals, so the statute is not a blanket licence to ignore every restraint. Under § 16600(c), the restriction applies even when the person being restrained is not a party to the contract itself (California Legislative Information) — relevant if a restraint on you has been agreed between your client and an intermediary you never signed with.
That is California, and it says nothing about the position anywhere else. If your contract names a different state's law, that state's rules decide the outcome, and a lawyer there is the person to read the clause.
Standards and shared reference points are part of what a trade body exists to maintain.
What happened to the FTC's non-compete rule?
A large amount of published material still describes the FTC's Noncompete Rule as though it governs contracts today. It does not. The Commission's own page states plainly: "The Noncompete Rule is not in effect and it is not enforceable. On August 20, 2024, a district court issued an order stopping the FTC from enforcing the rule" (Federal Trade Commission).
The same page sets out what followed. The FTC appealed that order on 18 October 2024, and on 5 September 2025 moved to dismiss its own appeal in the Fifth Circuit (Federal Trade Commission). That is the sequence recorded by the agency, checked 14 September 2026.
Two consequences follow. A rule that a court has stopped the agency enforcing is not operative law, so no contractor can point at the FTC rule to say a clause is void, and no client can rely on it either. And the relevant law has been state law throughout, which is why the useful question is never "what does the US say" but "which state's law governs this agreement". Litigation status can move, so treat this as the position on the date shown.
How is a non-compete different from a non-solicitation or a confidentiality clause?
Three restrictions commonly travel together in the same schedule and get called by the wrong name. They restrict different things, and conflating them leads people to agree to far more than they intended. This comparison is about what each clause type is aimed at, not about whether any of them is enforceable in a given state.
| Clause | What it restricts | What it does not restrict |
|---|---|---|
| Non-compete | Doing competing work at all, usually for a defined period, activity and area | Ordinary work outside the defined scope |
| Non-solicitation | Approaching named clients, customers or staff of the other party | Competing generally, if the clause is limited to solicitation |
| Confidentiality (NDA) | Using or disclosing defined confidential information | Working for anyone else, unless another clause says so |
The label at the top of a clause carries no weight; the operative wording does. A clause headed "non-solicitation" that bars you from accepting work from anyone in the client's sector is a restraint on trade in substance. Wording deciding the character of a clause is not unique to restraints: in a different jurisdiction and a different context entirely, substitution clauses under the UK's IR35 rules turn on the same problem of drafted terms versus real practice. That is UK employment status law and has nothing to do with American non-competes, but the drafting lesson transfers.
Buyers of contractor services face the mirror image of this problem when their template travels across state lines.
What should an independent professional look at before signing one?
Start with the governing-law clause, because it decides which state's rules apply to everything else. Then read the restraint itself for four things: the activity restricted, the geography, the duration and the trigger. "Shall not provide similar services" without a defined field is wider than most people assume, and a restriction that runs from the end of the whole framework agreement rather than the end of a single project can outlive the engagement by years.
Check whether the restraint binds your company, you personally, or both, whether it reaches subcontractors you engage, and whether the client can extend it by issuing a new schedule.
Where the clause matters commercially, negotiating scope is normal practice rather than an act of aggression: narrowing "competing services" to a named account, or the term to a defined number of months, is a routine request. Where it matters legally, take advice in the state whose law governs the contract. Membership of a trade body does not change your legal status, make a clause enforceable or make one void; how your work is actually performed and what the applicable law says are what decide that, and IFA membership is about standards, frameworks and representation rather than legal outcomes.
Frequently asked questions
Does the FTC ban non-competes for independent contractors?
No. The FTC's Noncompete Rule "is not in effect and it is not enforceable" following a district court order on 20 August 2024 (Federal Trade Commission), verified at October 2026. There is no federal ban in operation, and restraints are governed by the law of the relevant state.
Does California's § 16600 apply to independent contractors?
The statute is written by reference to the person restrained, providing that every contract restraining anyone "from engaging in a lawful profession, trade, or business of any kind is to that extent void", except as provided in that chapter (California Legislative Information). How it applies to a specific agreement, including the chapter's exceptions, is a question for a California lawyer.
Can a client restrain me through a contract I never signed?
Under California's § 16600(c), the restriction applies even when the person being restrained is not a party to the contract itself (California Legislative Information). That is California's position; other states are not covered here.
Is an NDA a non-compete?
No. A confidentiality clause restricts the use and disclosure of defined information. It does not stop you working for other clients unless a separate restraint says so. Signing one is not agreeing to a non-compete, and the two should be reviewed separately.
Read the framework agreement, not just the statement of work, and read it before the project starts rather than when the client objects to your next engagement.
Standards and templates are the part of this a trade body can carry for you.