Non-Compete Agreement
In one sentence
A contract clause restricting an employee from working for competitors or starting a competing business after leaving.
Plain English
A non-compete agreement is a contract between an employer and employee that prevents the employee from working for a competitor or starting a competing business for a set period after leaving the job. These agreements are designed to protect the employer's trade secrets and customer relationships. However, courts scrutinize them carefully because they restrict a person's right to earn a living. A non-compete is generally enforceable only if it is reasonable in scope (limited to a specific geographic area and time period) and protects a legitimate business interest. Some states, like California, disfavor non-competes entirely.
Ad slot
Example
A software engineer signs a non-compete agreement stating she cannot work for any competitor within 50 miles for two years after leaving. When she quits to join a rival firm six months later, her former employer sues to enforce the agreement. A court might find it reasonable if the company can show it protects genuine trade secrets.
Used in a sentence
“The non-compete agreement prevented him from joining a competitor for 18 months after his resignation.”
How Non-Compete Agreement differs by state
Non-Compete Agreement can apply differently depending on the state. Click a state to see local specifics.
Alabama
Alabama enforces reasonable non-competes but requires legitimate business interests and reasonable time, area, and line-of-business limits.
Alaska
Alaska disfavors non-competes and enforces them only when necessary to protect trade secrets or substantial relationships with prospective customers.
Arizona
Arizona enforces reasonable non-competes protecting legitimate business interests, with a presumption against enforceability for restrictions exceeding two years.
Arkansas
Arkansas enforces reasonable non-competes but requires they protect legitimate business interests and be reasonable in time, area, and scope.
California
California generally voids non-compete agreements as unlawful restraints on trade, with narrow exceptions for sale of business and partnership dissolution.
Colorado
Colorado voids most non-competes unless they protect legitimate business interests and are reasonable in scope, duration, and geography.
Connecticut
Connecticut enforces non-competes only if they protect legitimate business interests and are reasonable in time, area, and line of business.
Delaware
Delaware enforces reasonable non-competes that protect legitimate business interests, with no statutory time limit but courts generally require proportionality.
Florida
Florida enforces non-competes if they protect legitimate business interests and are reasonable in time, area, and line of business.
Georgia
Georgia enforces non-competes that protect legitimate business interests and are reasonable in duration, area, and scope of prohibited activity.
Hawaii
Hawaii strongly disfavors non-competes and enforces them only to protect legitimate business interests with reasonable restrictions.
Idaho
Idaho enforces reasonable non-competes that protect legitimate business interests, with no statutory time limit specified.
Illinois
Illinois enforces reasonable non-competes under the Compete Act, which requires legitimate business interests and reasonableness in scope, duration, and geography.
Indiana
Indiana enforces reasonable non-competes that protect legitimate business interests, with courts examining reasonableness in duration, geography, and scope.
Iowa
Iowa enforces non-competes only when they protect legitimate business interests and are reasonable in time, area, and scope of prohibited activity.
Kansas
Kansas enforces non-competes if they protect legitimate business interests and are reasonable in scope, time, and geography.
Kentucky
Kentucky enforces reasonable non-competes that protect legitimate business interests and are not unduly restrictive in time, area, or line of business.
Louisiana
Louisiana strictly limits non-competes and requires they be necessary to protect legitimate business interests, with narrow geographic and time restrictions.
Maine
Maine enforces non-competes only if they protect legitimate business interests and are reasonable in scope, duration, and geography.
Maryland
Maryland enforces non-competes that are reasonable in time, area, and line of business and protect legitimate business interests.
Massachusetts
Massachusetts strictly limits non-competes to protect employee mobility; courts enforce only reasonable restrictions on time, area, and line of business.
Michigan
Michigan enforces non-competes only when they protect legitimate business interests and are reasonable in scope, time, and territory.
Minnesota
Minnesota enforces non-competes under a reasonableness standard but requires they protect legitimate business interests and impose no undue hardship on employees.
Mississippi
Mississippi enforces reasonable non-competes that protect legitimate business interests without imposing undue hardship on the employee.
Missouri
Missouri enforces non-competes that are reasonable in time, territory, and line of business and protect legitimate business interests.
Montana
Montana bans non-compete agreements entirely except in narrow sale-of-business contexts.
Nebraska
Nebraska enforces reasonable non-competes that protect legitimate business interests and are not overly broad.
Nevada
Nevada enforces non-competes only to protect trade secrets, not general customer relationships or competition.
New Hampshire
New Hampshire enforces reasonable non-competes that protect legitimate business interests without undue hardship.
New Jersey
New Jersey enforces non-competes only when they protect legitimate interests and are reasonable in scope and duration.
New Mexico
New Mexico disfavors non-competes and enforces them only if they protect legitimate business interests and are reasonable in scope, duration, and geography.
New York
New York enforces non-competes only if they are reasonable in time, area, and line of business, and must protect legitimate business interests.
North Carolina
North Carolina enforces reasonable non-competes that protect legitimate business interests and are limited in time, area, and line of business.
North Dakota
North Dakota enforces non-competes if they are reasonable in time, area, and line of business and protect legitimate business interests.
Ohio
Ohio enforces non-competes under Ohio Revised Code § 1.01 if they are reasonable in time, area, and line of business and protect legitimate interests.
Oklahoma
Oklahoma enforces non-competes only if they protect legitimate business interests and are reasonable in scope, time, and geography.
Oregon
Oregon severely restricts non-competes; they are generally unenforceable except for narrow situations involving sale of a business or partnership dissolution.
Pennsylvania
Pennsylvania enforces reasonable non-competes that protect legitimate business interests and are not unduly harsh or oppressive to the employee.
Rhode Island
Rhode Island enforces non-competes that are reasonable in time, area, and line of business and protect legitimate business interests.
South Carolina
South Carolina enforces non-competes if they are reasonable in time, area, and line of business and protect legitimate business interests.
South Dakota
South Dakota enforces non-competes if they protect legitimate business interests and are reasonable in scope, time, and geography.
Tennessee
Tennessee enforces reasonable non-competes protecting legitimate business interests, with a statutory framework requiring reasonable time, area, and line of business limits.
Texas
Texas enforces non-competes under Texas Business & Commerce Code § 15.50 if they protect legitimate business interests and are reasonable in scope and duration.
Utah
Utah enforces non-competes if they protect legitimate business interests and are reasonable in time, area, and line of business under Utah Code § 34-47-501.
Vermont
Vermont enforces non-competes only if they are reasonable and necessary to protect legitimate business interests, with courts applying strict scrutiny.
Virginia
Virginia enforces non-competes only if they protect legitimate business interests and are reasonable in scope, time, and geography.
Washington
Washington presumes non-compete agreements are void unless the employer proves they protect legitimate business interests and are reasonable.
West Virginia
West Virginia enforces reasonable non-competes that protect legitimate business interests and are not unduly restrictive.
Wisconsin
Wisconsin enforces non-competes if they are reasonable in time, area, and line of business and protect legitimate interests.
Wyoming
Wyoming enforces non-competes that are reasonable in time, area, and line of business and protect legitimate business interests.
District of Columbia
D.C. enforces non-competes only when they protect legitimate business interests and impose reasonable time, area, and line-of-business restrictions.
Related terms
Breach of Contract
Failure to do what a contract requires, without a valid legal excuse.
Implied Contract
A contract where the parties' intent to be bound is shown by conduct rather than explicit words.
Damages
Money awarded by a court to compensate a party for losses caused by a breach or wrongdoing.
Right to Work
A legal principle that employees cannot be forced to join a union or pay union fees as a job condition.
At-Will Employment
An employment relationship where either party can end the job at any time without cause or notice.
Wrongful Termination
Illegal firing of an employee in violation of law, contract, or public policy.
Minimum Wage
The lowest hourly wage an employer is legally required to pay employees.
Overtime Pay
Compensation at an increased rate for hours worked beyond the standard workweek, typically 1.5 times the regular wage.
This page is a plain-English reference and is not legal advice. Laws vary by jurisdiction and change over time. For specific situations consult a licensed attorney.