Non-Compete Agreement

A non-compete agreement (NCA) is a contractual clause, often included in an offer letter or employment agreement, that restricts what work you can do after leaving a company. Typically: you can't work for a direct competitor or start a competing business for a defined period (6 months to 2 years) and within a defined geographic area. **Enforceability by state:** Non-competes are not uniformly enforceable. State law governs them. **States that generally ban or severely restrict them:** - California: Non-competes are almost entirely unenforceable - North Dakota, Oklahoma, Minnesota: Largely unenforceable - FTC proposed rule (2024): National ban on most non-competes, challenged in courts as of 2025 **States that enforce them with limitations:** Most other US states enforce non-competes if they're 'reasonable,' meaning the time period, geographic scope, and activity restriction must be proportionate to the employer's legitimate business interest. Courts have voided overly broad agreements. **What to do when asked to sign one:** - Read the scope carefully: What activities are restricted? What's the time period? - Negotiate narrower terms: Shorter duration, limited geographic scope, specific activity list - Check your state's law: A non-compete you sign may not be enforceable anyway - Get legal advice for senior roles with broad restrictions **Non-solicitation vs. non-compete:** Non-solicitation agreements (can't poach former colleagues or clients) are generally more enforceable than non-competes and are often included alongside them.