Jump to Section
Need help with a Non-Compete Agreement?
What Is a Noncompete Agreement?
A noncompete agreement — also known as a noncompete covenant, a covenant not to compete, restrictive covenant, or noncompete clause — is a legal contract between employees and an employer that prevents employees from entering into competing business ventures if they terminate their employment. Businesses may ask new employees to sign this type of agreement to ensure that they don't take the knowledge, skills, and relationships that they gain on the job and use them to set up business as a direct competitor. Employees gain distinct knowledge of their industries, which could make them formidable competitors, as they're aware of the following:
- Pricing strategies
- Workflows
- Product formulas
- Client information
- Salaries
- Business methods
- Pending products
- Research and development information
- Marketing strategies and plans
While a noncompete agreement offers advantages for the business, it may not be as appealing to an employee. A company doesn't necessarily want to lose the valuable investment made into the training, education, and development of an employee. However, these individuals must still retain the basic right to seek other employment opportunities and pursue professional advancement.
See Noncompete Agreement by State
- Alabama
- Alaska
- Arizona
- Arkansas
- California
- Colorado
- Connecticut
- Delaware
- District of Columbia
- Florida
- Georgia
- Hawaii
- Idaho
- Illinois
- Indiana
- Iowa
- Kansas
- Kentucky
- Louisiana
- Maine
- Maryland
- Massachusetts
- Michigan
- Minnesota
- Mississippi
- Missouri
- Montana
- Nebraska
- Nevada
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Ohio
- Oklahoma
- Oregon
- Pennsylvania
- Rhode Island
- South Carolina
- South Dakota
- Tennessee
- Texas
- Utah
- Vermont
- Virginia
- Washington
- West Virginia
- Wisconsin
- Wyoming
Enforceability of Noncompete Agreements By State
Noncompete agreements are not allowed in all states. This type of contract is unenforceable in the following states:
- North Dakota
- Oklahoma
- California
Employers in these states may still ask employees to sign this type of contract in the hopes that the individuals are unaware of their rights and will believe that they cannot legally compete with the business. In California, an employer who requires their employees to sign a noncompete agreement can be sued.
Other states may allow noncompete agreements but confine them to particular industries or circumstances. Do some research on your local laws and understand what's applicable in your state.
What's Included in a Noncompete Agreement?
- The date the agreement becomes effective This date is typically the first date of employment for a new hire. However, some noncompete agreements are executed later in the employee's term. This contract may become necessary before an employee earns a promotion or comes into contact with sensitive business information.
- The reason for the agreement The employer must specify the scope of the noncompete agreement and the purpose for this contract. A noncompete agreement makes more sense for a high-level employee who will work with sensitive company information than for an hourly worker with minimal responsibilities.
- The duration of the agreement Noncompete agreements must be reasonable. These agreements are typically limited to a year or two after employees terminate their employment with the company.
- Compensation for complying with the terms For a new hire, the job itself is usually considered adequate compensation for agreeing to the terms of the noncompete agreement. However, if you're asked to sign a noncompete agreement for a job you're already working in, you may want to ask for a promotion, raise, or other benefits in exchange for your signature on the contract. Some states require a payment of consideration in exchange for signing a noncompete agreement. Courts are more likely to uphold the agreement if the employee received some type of compensation.
The noncompete agreement should also include any relevant specifications regarding the type of competition prohibited. For example, the employee may not be allowed to work for a competitor within a particular region or industry. Jobs that fall outside of the geographical area or specialized industry, however, may be acceptable. The employer may also specify particular companies for which an employee cannot work.
See Non-Compete Agreement Pricing by State
- Alabama
- Alaska
- Arizona
- Arkansas
- California
- Colorado
- Connecticut
- Delaware
- District of Columbia
- Florida
- Georgia
- Hawaii
- Idaho
- Illinois
- Indiana
- Iowa
- Kansas
- Kentucky
- Louisiana
- Maine
- Maryland
- Massachusetts
- Michigan
- Minnesota
- Mississippi
- Missouri
- Montana
- Nebraska
- Nevada
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Ohio
- Oklahoma
- Oregon
- Pennsylvania
- Rhode Island
- South Carolina
- South Dakota
- Tennessee
- Texas
- Utah
- Vermont
- Virginia
- Washington
- West Virginia
- Wisconsin
- Wyoming
How Enforceable are Non-Compete Agreement?
For a court to uphold a noncompete agreement, it must deem the contract reasonable. It is not reasonable for an employee to enforce restrictions so confining that an individual cannot find gainful employment outside the current job. People have the right to earn a living, and the noncompete agreement cannot take this right away from them.
When a court is evaluating a noncompete agreement to determine whether it's reasonable and enforceable, it will consider whether:
- The employer has a legitimate need to protect his or her business interests
- The geographical scope is reasonable in size
- Employees can find other employment opportunities that will not force them to violate the contract
- The term of the noncompete agreement is appropriately limited
- The agreement is unreasonably broad regarding the type of work prohibited
These factors are considered both individually and in conjunction with one another. A long-term agreement is more likely to be enforceable if it's paired with a small geographical scope. Likewise, a noncompete agreement that covers a broad range of companies has a better chance of standing up in court if it applies only for a month.
What Voids a Noncompete Agreement?
An employer cannot typically enforce a noncompete agreement executed simply to keep its employees from leaving the business. The company must prove that it has a legitimate reason to be concerned about employees taking jobs elsewhere. For example, if employees have knowledge about a secret recipe for a major product or have close relationships with and sensitive details about a business's top clients, they could present a notable risk to the company if they took the information elsewhere.
Noncompete Agreements Between Companies: Sale of a Business
If a business is sold to new owners, noncompete agreements may come into play. The entity that acquires a business is often wise about having employees retained within the business sign a noncompete agreement. Lacking this form of protection, the previous owners of the business may poach employees and set up direct competition.
If employees were previously subject to a noncompete agreement, a purchaser would want to investigate these contracts when acquiring the company. The new noncompete agreement must include an assignment provision that allows the new business owner to maintain the contract under new management. If such a provision is not in place, the previous noncompete agreement may become void.
How Are Noncompete Agreements Enforced?
If you want to be released from a noncompete agreement, you should speak with your employer and get a signed document that releases you from the contract. Lacking this document, you are subject to the enforcement of this contract.
Your previous employer may request an injunction or restraining order preventing you from taking any type of employment that falls within the limits of the noncompete agreement. Courts often expedite these cases to protect the employer from potential damage. You may have only days or weeks to prepare your case with an employment lawyer if a hearing is scheduled.
A court may begin by issuing a temporary order that prevents you from taking a particular job. Likewise, the court might deem that your activities are temporarily permitted, but continue to investigate the case. The court may choose to grant an injunction, a legal order that will stop you from working in violation of the noncompete agreement. This injunction can restrict your activities for any period of time set forth by the court.
A noncompete agreement is a beneficial contract for employers in particular situations where an employee could do significant harm to a business by taking knowledge to a competitor. If you're asked to sign a noncompete agreement, review the document carefully to make sure it's valid within your state and does not prohibit you from taking reasonable actions to further your career.






Meet some of our Noncompete Agreement Lawyers
Christina M.
I am a regulatory transactional attorney with 16 years of in-house experience, largely in the gaming/gambling industry. I have negotiated various types and sizes of contracts from janitorial services for a small commercial building to multi-million dollar technology transactions. I also have a strong regulatory background that strengthens my ability to navigate contracts that are subject to stringent regulations.
Keidi C.
Keidi S. Carrington brings a wealth of legal knowledge and business experience in the financial services area with a particular focus on investment management. She is a former securities examiner at the United States Securities & Exchange Commission (SEC) and Associate Counsel at State Street Bank & Trust and has consulted for various investment houses and private investment entities. Her work has included developing a mutual fund that invested in equity securities of listed real estate investment trusts (REITs) and other listed real estate companies; establishing private equity and hedge funds that help clients raise capital by preparing offering materials, negotiating with prospective investors, preparing partnership and LLC operating agreements and advising on and documenting management arrangements; advising on the establishment of Initial Coin Offerings (ICOs/Token Offerings) and counseling SEC registered and state investment advisers regarding organizational structure and compliance. Ms. Carrington is a graduate of Johns Hopkins University with a B.A. in International Relations. She earned her Juris Doctorate from New England Law | Boston and her LL.M. in Banking and Financial Law from Boston University School of Law. She is admitted to practice in Massachusetts and New York. Currently, her practice focuses on assisting investors, start-ups, small and mid-size businesses with their legal needs in the areas of corporate and securities law.
Scott S.
Scott graduated from Cardozo Law School and also has an English degree from Penn. His practice focuses on business law and contracts, with an emphasis on commercial transactions and negotiations, document drafting and review, employment, business formation, e-commerce, technology, healthcare, privacy, data security and compliance. While he's worked with large, established companies, he particularly enjoys collaborating with startups. Prior to starting his own practice in 2011, Scott worked in-house for over 5 years with businesses large and small. He also handles real estate leases, website and app Terms of Service and privacy policies, and pre- and post-nup agreements.
Janice K.
Twenty-plus years experience in family law, employment law, public agency law, federal, state and local contracts drafting and review, appellate practice.
August 30, 2023
Joe C.
Born in Dallas, Texas, Joe Craddock represents clients in a range of litigation and transactional matters covering Contracts, Real Property, Oil and Gas, and Construction Defects.
August 30, 2023
Massa M.
Highly disciplined attorney with over seven years administrative litigation experience. Capable of analyzing complex research, data, and documentation to prepare and represent individuals in sensitive cases. Recognized as a leader with the ability to perform work both autonomously and collaboratively as a member of a diverse legal team. Great problem-solving skills, strong multitasking capabilities and works well under strict deadlines. A professional with a sense of humor, strong work ethic and ability to build trust across all levels.
August 31, 2023
Bryan Kennedy C.
10-year lawyer with a B.A. in Rhetoric and Writing. I use clear, direct language instead of hollow jargon to draft effective legal documents for family law, business, and general contract situations.
Find the best lawyer for your project
Browse Lawyers NowEmployment lawyers by top cities
- Austin Employment Lawyers
- Boston Employment Lawyers
- Chicago Employment Lawyers
- Dallas Employment Lawyers
- Denver Employment Lawyers
- Houston Employment Lawyers
- Los Angeles Employment Lawyers
- New York Employment Lawyers
- Phoenix Employment Lawyers
- San Diego Employment Lawyers
- Tampa Employment Lawyers
Noncompete Agreement lawyers by city
- Austin Noncompete Agreement Lawyers
- Boston Noncompete Agreement Lawyers
- Chicago Noncompete Agreement Lawyers
- Dallas Noncompete Agreement Lawyers
- Denver Noncompete Agreement Lawyers
- Houston Noncompete Agreement Lawyers
- Los Angeles Noncompete Agreement Lawyers
- New York Noncompete Agreement Lawyers
- Phoenix Noncompete Agreement Lawyers
- San Diego Noncompete Agreement Lawyers
- Tampa Noncompete Agreement Lawyers
ContractsCounsel User
Housekeeping
Location: California
Turnaround: Less than a week
Service: Drafting
Doc Type: Non-Compete Agreement
Number of Bids: 4
Bid Range: $495 - $100,000
ContractsCounsel User
Non-Compete Clause in Employment (1099) contract
Location: Massachusetts
Turnaround: Less than a week
Service: Contract Review
Doc Type: Non-Compete Agreement
Page Count: 8
Number of Bids: 5
Bid Range: $250 - $795
User Feedback:
other helpful articles
- Employment Contract
- Employment Offer
- Founders' Agreement
- Offer Letter
- RSU Tax: How Are Restricted Stock Units Taxed?
related contracts
- Bereavement Policy
- BYOD Policy
- Code of Conduct
- Code of Ethics
- Collective Bargaining Agreement
- Compensation Agreement
- Conflict of Interest Policy
- Consulting Agreement
- Contract Services Agreement
- Contractor Agreement