A non-compete agreement is a contract that restricts your ability to work for a competitor or start a competing business after leaving your employer. They're increasingly common, but they're also increasingly controversial — and in many states, increasingly restricted. Whether your non-compete is enforceable depends heavily on where you live and how it's written.
California, Oklahoma, North Dakota, and Minnesota generally don't enforce non-competes at all. Many other states have passed laws limiting them for low-wage workers. The FTC has also proposed a federal ban — check the latest status.
Even in states where non-competes are allowed, courts evaluate whether the restrictions are reasonable in terms of duration (usually 6 months to 2 years), geographic scope, and the activities restricted. Overly broad agreements are often struck down.
For a non-compete to be enforceable, you generally need to have received something in exchange — a job offer, a promotion, a bonus, or access to trade secrets. Some states require additional consideration beyond just continued employment.
Non-disclosure agreements (NDAs) protect confidential information. Non-solicitation agreements prevent you from poaching clients or employees. These are generally easier to enforce and may apply even in states that ban non-competes.
Before signing a non-compete, you can often negotiate narrower terms — shorter duration, smaller geographic area, or specific carve-outs for certain industries or roles. If you're being asked to sign after starting the job, you may have even more leverage.
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