Industry News

Non-Compete Agreements for Yoga Teachers: Enforceability

The FTC's federal non-compete ban collapsed in 2025, leaving yoga studios navigating state-by-state rules. Most agreements wouldn't survive court review.

Key Takeaways

Federal non-compete ban collapsed: The FTC's April 2024 rule banning most employee non-competes was struck down by federal courts and the agency withdrew its appeals in September 2025, leaving enforcement fragmented across state laws.
Most yoga studio non-competes are unenforceable: Industry lawyers estimate 80% of non-compete agreements in yoga and wellness practices would not hold up in court, yet studios continue using them as deterrents.
Financial impact on teachers is severe: Non-competes typically restrict teaching within a multi-mile radius for up to one year after departure, forcing instructors who earn around $30 per class to stop teaching entirely to avoid legal risk.
State laws provide some protection: Massachusetts now prohibits non-competes for hourly workers like yoga teachers, while California, North Dakota, and Oklahoma have broader bans in place.
Courts require legitimate business interests: To be enforceable, non-competes must protect trade secrets or customer relationships, not simply block competition, and must be reasonable in geographic scope and duration.

The Federal Ban That Never Was

On April 23, 2024, the U.S. Federal Trade Commission voted 3-2 to finalize a rule banning most non-compete clauses for employees nationwide. The rule was published in the Federal Register on May 7, 2024, with an effective date of September 4, 2024.

That effective date never arrived. On August 20, 2024, a federal court in Texas set aside the Rule and prohibited the FTC from enforcing it. A Florida district court issued a similar ruling. On September 5, 2025, the Federal Trade Commission voluntarily dismissed its appeals of both federal court rulings, effectively ending the federal ban before it began.

On the same day it withdrew its appeals, the FTC filed a complaint challenging a large US employer's restrictive non-compete agreements with nearly 1,800 employees, signaling that enforcement will now proceed case-by-case rather than through a blanket prohibition. For yoga studio operators and teachers, this means the legal landscape remains a patchwork of state laws and individual contract challenges.

Why Most Studio Non-Competes Would Not Survive Court Scrutiny

According to Cory Sterling, a labor lawyer who has reviewed contracts in the wellness industry, 80% of non-competes he sees in yoga and other wellness practices would not hold up in court if challenged. The fundamental problem is that courts require non-competes to protect a legitimate business interest beyond simply preventing competition.

As legal experts explain in Yoga Journal, the real crux of the issue is that studios must demonstrate they are protecting trade secrets, proprietary methods, or genuine customer relationships. Non-compete clauses are rarely enforced, and courts typically do not uphold them unless they are very specific in scope, with reasonable geographic limits and time restrictions.

Many yoga studio non-competes fail these tests. They often contain vague language, overly broad geographic restrictions, or durations that exceed what courts consider reasonable for the fitness industry. Yet despite their legal weakness, these agreements continue to function as powerful deterrents because most teachers cannot afford to litigate.

The Reality for Teachers: Financial Necessity Meets Legal Threat

For yoga teachers, the ability to teach at more than one studio is a financial necessity. Constrained by limited class slots, instructors may only teach two or three classes per week at a single studio, earning around $30 per class. Multi-studio teaching is not a luxury but a requirement for a viable income.

Non-competes typically restrict yoga teachers from teaching at other studios and contacting students, often for up to one year after leaving. Some agreements, like those formerly used by Down Under School of Yoga in Boston, prevented teachers from teaching anywhere within a few miles of any studio location, either while employed or for one year after departure, without explicit permission.

The impact is severe. Many teachers reported that leaving a studio under a non-compete threatened their livelihood, forcing them to stop teaching yoga altogether to make ends meet. Teachers described the agreements as causing them pain and leaving them in constant fear of being sued, even when they had done nothing wrong beyond seeking additional work.

State Law Protections Filling the Federal Void

With no federal ban in place, state laws now determine what is permissible. Massachusetts enacted non-compete reform that specifically protects hourly workers. Under this law, employers cannot use non-competes with workers who are non-exempt under labor laws, meaning anyone paid by the hour rather than salary. This protection covers most yoga teachers.

The Massachusetts law also provides that non-competes are not enforceable against employees who are terminated without cause or laid off. Three states have gone further: California, North Dakota, and Oklahoma maintain near-total bans on employee non-competes, though the nuances vary by jurisdiction.

For studios operating in multiple states, this creates compliance complexity. A contract template that functions as a deterrent in one state may be explicitly illegal in another, exposing the studio to legal risk even if the non-compete is never enforced.

A Boston Studio Rewrites Its Approach

This spring, more than two dozen former teachers of Down Under School of Yoga in Boston signed an open letter calling on the studio to remove "onerous requirements" from its contracts. The teachers stated that the non-compete caused them pain and left them in constant fear of being sued.

Studio owner Cohen responded by apologizing and acknowledging that her employment agreement "feels punitive." She wrote to former teachers still bound by the non-compete to inform them it was no longer in effect. She then had current teachers rewrite the contract themselves, creating a new system where teachers choose their level of commitment to the studio. Those who agree to teach exclusively may be paid at a higher rate, turning what was once a legal restriction into a voluntary compensation tier.

The case illustrates both the power imbalance created by non-competes and the practical alternatives available when studios prioritize teacher retention over legal enforcement. Cohen's experience also highlights a common industry dynamic: when studios tried to hire teachers, almost every candidate had a pre-existing non-compete, especially in barre, leading some studios to train their own teachers rather than navigate the legal complexity.

What This Means for Studio Operators

Editorial analysis, not reported fact:

If you currently use non-compete agreements, conduct a legal review in every state where you operate. Contracts that serve as effective deterrents today may expose you to regulatory action tomorrow, particularly as the FTC has signaled continued case-by-case enforcement even without a blanket rule. The reputational cost of being named in an enforcement action or teacher advocacy campaign may far exceed any competitive protection the agreement provides.

Consider whether your legitimate business interests can be protected through narrower tools. Non-disclosure agreements that protect proprietary sequencing or business methods, non-solicitation clauses that prevent poaching of students through direct contact, and structured compensation tiers that reward exclusivity may achieve your goals without the legal and ethical baggage of broad non-competes. If you operate in Massachusetts or states with similar hourly-worker protections, non-competes with most yoga teachers are already illegal.

The Down Under School of Yoga case offers a roadmap: involve teachers in rewriting agreements, create voluntary commitment tiers with differential pay, and recognize that teacher mobility is not inherently threatening when your studio culture and compensation are strong. The studios facing the most hiring friction are those where nearly every candidate arrives encumbered by a competitor's non-compete, not those that have abandoned the practice.