Non-compete Clause

Summary

This is an employee non-compete clause (also known as a non-competition clause or covenant not to compete) intended for use in a broader agreement between the employer and employee. This clause includes practical guidance, drafting notes, and alternate clauses. The following map identifies in orange the states that mostly prohibit employee non-competition agreements and in green the states that prohibit non-competition agreements for low-wage workers: Visualization of Employee Noncompete: State Limitations (current as of September 1, 2023). This template is the template for our state non-competition clauses and has not been tailored for any jurisdiction. Use this template alone or customize it for one or more jurisdictions. For additional boilerplate terms to consider when incorporating a non-compete into an agreement, see Non-compete, Customer and Employee Non-solicitation, and Confidentiality Agreement. A traditional non-compete prohibits competing activities by an employee, typically for a specified period and often within a designated geographical area. Such covenants raise restraint-of-trade and other public policy concerns, and many states restrict their use by statute or common law. For a full listing of key content covering restrictive covenant considerations, see Restrictive Covenants Resource Kit. For additional information on non-competition agreements, see Non-compete Agreements: Key Negotiation, Drafting, and Legal Issues; Non-compete Agreements Checklist (Best Drafting Practices for Employers); Restrictive Covenant Basics, Including Adequate Consideration, Protectable Interests, Geographic and Time Restrictions, and Permissible Scope; Restrictive Covenants: Drafting Common Provisions; and Non-compete and Non-solicitation Agreements Checklist (Addressing Suspected Violations). For information on state laws concerning non-compete agreements, see Non-competes and Trade Secret Protection State Practice Notes Chart. For state law compliant non-compete agreements, see Non-competes and Trade Secret Protection State Expert Forms Chart.