5 min read

Non-Compete Agreements

Non-compete clauses restrict where you can work after leaving a job — but their enforceability varies widely by state, and courts and regulators are increasingly skeptical of them.

What a non-compete does

A non-compete agreement prohibits you from working for a competitor, starting a competing business, or sometimes soliciting former clients or coworkers for a defined period after leaving. The scope — geography, industry, duration — varies enormously. Many employees sign them during onboarding without negotiating the terms.

Enforceability varies by state

California, North Dakota, and a handful of other states ban non-competes almost entirely. Most other states enforce them only if they are reasonable in scope — limited in time, geography, and the type of work restricted. Courts routinely reduce or void non-competes that are overbroad.

The FTC rule

In 2024, the Federal Trade Commission issued a rule banning most non-compete agreements for workers nationwide. That rule has faced legal challenges and its status may still be in flux. An employment attorney can tell you the current state of the law and how it applies to your agreement.

Red flags to watch for

Non-compete covers an entire industry rather than a specific competitor
Duration is longer than one year (courts are skeptical of longer periods)
You were never given a copy of the agreement after signing
You're being threatened with a lawsuit for taking a job in a different role or location
Agreement was added after you were already hired, with no additional compensation offered

Next up

Whistleblower Protections