What is a non-compete agreement and is it enforceable?
A non-compete agreement restricts an employee or contractor from working for competitors after leaving. Enforceability varies wildly by state: California, Minnesota, North Dakota, and Oklahoma BAN them entirely. Most other states enforce 'reasonable' non-competes (typically 6-12 months, limited geography, specific industry).
Non-compete agreements prevent workers from competing against a former employer for a defined period and geographic area. Their enforceability has changed dramatically in recent years.
- California — completely banned
- Minnesota — banned for new agreements (2023+)
- Oklahoma — banned
- North Dakota — banned
- Washington D.C. — banned for most workers
FTC ban: In 2024, the FTC issued a federal rule banning most non-competes. As of 2026, the rule is being challenged in court — check current status before relying on it.
Where they're still enforceable, courts test for reasonableness:
- Time — typically 6-12 months. Anything over 2 years is rarely enforced.
- Geography — must match the employer's actual market. 'Anywhere in the world' is unenforceable.
- Scope — limited to the specific industry/role. Can't prevent someone from working at all.
- Consideration — must be supported by something of value (a job offer, raise, bonus).
Alternatives that hold up better:
- Non-solicitation — prevents poaching clients/employees (more enforceable than non-competes).
- NDA — protects confidential info without restricting where someone works.
- IP Assignment — ensures all work product belongs to the company.
If you need protection without a non-compete, generate a mutual NDA + non-solicitation agreement at icontract.pro instead.
Create your own contract in 2 minutes
iContract drafts a custom, legally sound agreement for free. Start drafting →