The Federal Reset: Why Non-Competes Are Now a State-Law Question
As of February 2026, there is no federal ban on non-compete agreements. The Federal Trade Commission’s April 2024 rule, which would have banned most non-competes nationally, was vacated by a federal district court in Texas in August 2024, and the FTC formally abandoned its appeal in September 2025. Whatever protection an agency has against a departing producer soliciting clients now runs entirely through state law, not a uniform federal standard.
That reset matters more for insurance agencies than it might for a typical employer, because producer-driven businesses depend so heavily on the relationship a single person carries with a book of clients.
Why Courts Favor a Client Non-Solicit Over a Broad Non-Compete
Courts are, per MarshBerry’s own analysis of the current legal landscape, far more willing to enforce client non-solicitation clauses, particularly in producer-driven businesses, than broad non-competes. A broad non-compete tries to stop a departing producer from working in the industry at all for a period of time, a restriction courts have grown skeptical of even before the FTC’s own attempted ban. A narrowly drafted non-solicitation clause, restricting only active solicitation of the specific clients a producer worked with, holds up far more reliably.
For an agency writing or reviewing a producer’s employment agreement, that distinction is the whole ballgame: a broad non-compete that feels protective on paper may simply not survive a court challenge, while a narrow non-solicit is far more likely to actually hold.
What a Non-Solicit Stops, and What It Doesn’t
A non-solicitation clause restricts the departing producer’s own conduct, it stops them from actively reaching out to their former clients to move the business. It does not, and generally cannot, stop a client from independently deciding to call their old producer and follow them to a new agency on their own initiative.
That distinction is exactly why what follows a producer who leaves is not fully answerable by contract language alone. A well-drafted non-solicit limits active pursuit; it does not eliminate a client relationship strong enough to survive a producer’s departure without any solicitation at all.
A Real Example at Scale: the Brown & Brown and Howden Dispute
MarshBerry’s analysis points to the Brown & Brown and Howden dispute as a real, named example of what a large-scale departure actually looks like in practice: approximately 200 employee departures in a single event. That is not a single producer quietly moving to a competitor, it is what MarshBerry characterizes as a lift-out, a coordinated group departure that moves a meaningful piece of a book all at once.
Seeing that scale named and documented, rather than treated as a hypothetical worst case, is useful context for any agency principal who assumes departure risk means one producer at a time.
Why Lift-Outs Are Becoming a Normal Risk, Not an Occasional One
MarshBerry’s own framing is direct: large-scale producer lift-outs are now a defining market feature of the industry, not an episodic risk an agency principal can reasonably treat as rare. Agency consolidation, private equity roll-ups, and competitive recruiting all raise the incentive for a competitor to attempt exactly this kind of coordinated departure, group non-competes and non-solicits included.
That framing changes how an agency should think about the question. This is not a risk to insure against once and forget, it is an ongoing condition of operating a producer-driven business in the current market.
Where the Familiar Replacement-Cost Number Still Fits
None of this replaces the well-known replacement-cost math: replacing a single departing producer runs an estimated 75% to 150% of their departing salary, 15,000 to 50,000 dollars in direct cost, according to industry data on producer turnover. That figure is real and worth knowing, but it answers a different question than this piece is asking. It measures what it costs to backfill a role. It says nothing about whether the departing producer’s clients are legally, or practically, still available to follow them, which is the actual mechanics question a well-drafted agreement, or the lack of one, decides.
Getting the contractual question right is what determines whether that replacement-cost number is the whole story, or just the smaller half of it.
What an Agency Should Have in Place
The practical takeaway is not complicated to state, even if it is easy to skip: a narrowly drafted client non-solicitation clause, reviewed against current state law rather than assumed to be enforceable because it is in a signed contract, is worth far more than a broad non-compete an agency principal feels good about but a court is unlikely to uphold.
Human + AI SDRs keep new-business prospecting running regardless of producer turnover, so a departure, planned or not, does not also mean a quiet freeze on the pipeline while an agency sorts out what its agreements actually protect.
Sources
The external data in this article draws on the sources below. Figures described in the text as estimates or industry triangulations are directional and are not attributed to a single dataset.
- MarshBerry, Non-Competes Still Exist, But So Do Talent Raids
- The Insurance Dudes, citing Big I / Reagan Consulting Best Practices Study