The first recorded non-compete case was thrown out of an English court in 1414.
The earliest known legal dispute over a non-compete agreement dates to 1414 in England, in a case known as Dyer's Case. A dyer's apprentice had agreed not to practice his trade in the same town for six months after completing his training. When the master attempted to enforce the agreement, the court refused, with the judge reportedly declaring the restraint void.1
English courts remained hostile to non-compete agreements for centuries. In 1711, the case of Mitchel v. Reynolds established the framework for modern enforceability, distinguishing between "general" restraints on trade, which were unenforceable, and "partial" restraints, which could be enforced if they were limited in geography and duration and supported by adequate consideration.2
By the twentieth century, non-compete clauses had become standard in employment contracts across multiple industries, particularly in the United States.
A 2019 study by the Economic Policy Institute estimated that approximately 30 million American workers, roughly 18 percent of the labor force, were bound by non-compete agreements. The practice extended well beyond executives and engineers to include fast-food workers, janitors, and entry-level employees.3
In April 2024, the U.S. Federal Trade Commission voted to ban most non-compete clauses nationwide, calling them an unfair method of competition that suppressed wages and reduced labor mobility. The rule faced immediate legal challenges and was blocked by a federal court in Texas before its effective date.4