Can I ask an existing employee to sign a non-compete?

Yes, but in many states you must provide additional consideration — something of value beyond continued employment alone. Simply requiring an existing employee to sign as a condition of keeping their job may not be enforceable in states like Illinois, Texas, or New York. Providing a raise, bonus, or additional benefits at the time of signing strengthens enforceability.

What is the FTC's proposed ban on non-competes?

In January 2023, the FTC proposed a rule that would ban most non-compete clauses nationwide. The rule has faced significant legal challenges and its status remains uncertain. Employers in all states should monitor this development and consider whether their reliance on non-competes remains viable.

What is the difference between a non-compete and a non-solicitation agreement?

A non-compete prohibits the employee from working for a competitor or starting a competing business. A non-solicitation is narrower — it only prohibits the employee from soliciting the employer's clients or employees, without necessarily preventing them from working in the same industry. Non-solicitation agreements are generally easier to enforce and more widely accepted by courts.

Can a court modify an overly broad non-compete?

In many states, yes. Courts apply 'blue penciling' — rewriting an overly broad restriction to make it enforceable — rather than voiding the entire agreement. However, some states (like California) will simply void an unenforceable non-compete without rewriting it. Draft restrictions narrowly to avoid having them reduced or eliminated by a court.

Does a non-compete survive an employee being laid off?

In most states, yes — a properly drafted non-compete remains in effect even if the employee is terminated, unless the agreement specifically provides otherwise. Some states (like Illinois) restrict enforcement against employees who were laid off without cause. Review your state's rules carefully, especially if non-competes are used with at-will employees.

What happens if someone violates a non-compete?

The employer can seek a court injunction to stop the competing activity and monetary damages for losses caused by the breach. Because proving monetary damages from competition can be difficult, injunctive relief is typically the primary remedy. Courts may also award attorneys' fees if the agreement includes a fee-shifting clause.

Free Non-Compete Agreement Template — Fill Out & Download Instantly

Free — No Sign-Up RequiredPDF & WordUpdated March 30, 2026

⚠️ Legal Disclaimer: This template is attorney-reviewed and built to US legal standards. It does not substitute for professional legal advice. For complex situations, we recommend consulting a licensed attorney.

Document Completeness9%

Enforceability varies greatly by state — read warnings carefully

Governing State*

Non-compete enforceability varies significantly by state — California, Minnesota, North Dakota, and Oklahoma prohibit them

Employer / Company Name*

Full legal name of the employer or business

Employer Address*

Employee / Contractor Full Name*

Employee / Contractor Address*

Effective Date*

MM/DD/YYYY

Restricted Competitive Activities*

Be specific — courts may void overly broad restrictions

Geographic Scope*

Specify the geographic area where the restriction applies

Non-Compete Duration*

Period after employment/contract ends during which restriction applies

Include Customer / Client Non-Solicitation Clause

Include Employee Non-Solicitation Clause

Include Confidentiality / Trade Secrets Clause

Consideration Provided to Employee*

Describe the value provided in exchange for signing this agreement

Remedies for Breach*

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NON-COMPETE AGREEMENT

This Non-Compete Agreement ("Agreement") is entered into as of [Effective Date], by and between:

[Employer / Company Name] ("Employer")

Address: [Employer Address]

and

[Employee / Contractor Full Name] ("Employee")

Address: [Employee / Contractor Address]

RECITALS

WHEREAS, Employer and Employee have entered into or are entering into an employment or contractor relationship; and

WHEREAS, in the course of this relationship, Employee will have access to Employer's confidential information, trade secrets, customer relationships, and proprietary business methods;

NOW, THEREFORE, in consideration of [Consideration Provided to Employee], and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1. NON-COMPETITION

During the term of Employee's engagement with Employer and for a period of 1 year following the termination of that engagement for any reason, Employee agrees not to:

[Restricted Competitive Activities]

Geographic Scope: This restriction applies [Geographic Scope].

2. SCOPE OF RESTRICTION

Employee acknowledges that the scope, duration, and geographic limits of this restriction are reasonable and necessary to protect Employer's legitimate business interests, including trade secrets, proprietary information, and established customer relationships.

3. NON-SOLICITATION OF CLIENTS

For a period of 1 year following termination of Employee's engagement, Employee agrees not to directly or indirectly solicit, contact, or accept business from any client, customer, or prospective customer of Employer with whom Employee had material contact during the last 24 months of employment.

CONFIDENTIALITY

Employee acknowledges that in the course of employment, Employee will receive or have access to confidential business information, trade secrets, customer data, financial information, technical data, and other proprietary information of Employer ("Confidential Information"). Employee agrees to hold all Confidential Information in strict confidence during and after employment, and not to use or disclose such information for any purpose other than furthering Employer's business interests. This obligation survives the termination of this Agreement and any employment relationship.

REMEDIES

[Remedies for Breach]

Employee agrees that any breach of this Agreement would cause irreparable injury to Employer for which monetary damages alone would be inadequate, and that Employer shall be entitled to seek injunctive and other equitable relief in addition to any monetary remedies available at law.

SEVERABILITY

If any provision of this Agreement is found to be unenforceable as written, the court is authorized to modify the provision to the minimum extent necessary to make it enforceable ("blue penciling"), and the remaining provisions shall continue in full force.

GOVERNING LAW

This Agreement shall be governed by the laws of the State of [Governing State].

ENTIRE AGREEMENT

This Agreement constitutes the entire agreement between the parties regarding non-competition and supersedes any prior understandings on this subject.

IN WITNESS WHEREOF, the parties have executed this Non-Compete Agreement as of the date first written above.

_________________________________

[Employer / Company Name]

Authorized Representative

Date: _______________

_________________________________

[Employee / Contractor Full Name]

Employee / Contractor

Date: _______________

Document Completeness9%

Enforceability varies greatly by state — read warnings carefully

Governing State*

Non-compete enforceability varies significantly by state — California, Minnesota, North Dakota, and Oklahoma prohibit them

Employer / Company Name*

Full legal name of the employer or business

Employer Address*

Employee / Contractor Full Name*

Employee / Contractor Address*

Effective Date*

MM/DD/YYYY

Restricted Competitive Activities*

Be specific — courts may void overly broad restrictions

Geographic Scope*

Specify the geographic area where the restriction applies

Non-Compete Duration*

Period after employment/contract ends during which restriction applies

Include Customer / Client Non-Solicitation Clause

Include Employee Non-Solicitation Clause

Include Confidentiality / Trade Secrets Clause

Consideration Provided to Employee*

Describe the value provided in exchange for signing this agreement

Remedies for Breach*

What Is a Non-Compete Agreement Template?

A non-compete agreement (also called a covenant not to compete) is a contract in which one party — typically an employee or contractor — agrees not to engage in competitive business activities for a defined period and within a defined geographic area after the relationship ends. Non-competes protect employer investments in training, trade secrets, and client relationships. This template includes restricted activities, geographic scope, duration, optional non-solicitation and confidentiality clauses, and state-specific guidance on enforceability limits..

When Do You Need It?

You need a non-compete agreement when: hiring a key employee who will have access to trade secrets or client relationships, engaging a contractor for specialized work, selling a business and restricting the seller from immediate competition, or protecting proprietary systems from being used at a competing firm. Note that several states significantly restrict or prohibit non-competes — review your state's laws before using this form..

What's Included in This Template

Employer and employee/contractor identification
Effective date of the agreement
Description of restricted competitive activities
Geographic scope of the restriction
Duration of the non-compete
Optional: Customer/client non-solicitation clause
Optional: Employee non-solicitation clause
Optional: Confidentiality and trade secrets clause
Consideration clause
Injunctive relief and remedies provision
Governing law and severability
Signature blocks for both parties

How to Fill It Out

Select Your State — This is the most critical step. Non-compete enforceability varies dramatically by state. California prohibits them almost entirely. Several other states impose significant limits. Review your state's laws carefully before proceeding.

Enter Party Details — Fill in the employer's or company's legal name and address, and the employee's or contractor's full name and address. Use the registered legal entity name for businesses.

Define Restricted Activities — Describe the specific competitive activities prohibited — this should be tailored to the actual work performed, not a blanket prohibition on all employment in an industry. Courts scrutinize overly broad restrictions.

Set Geographic Scope and Duration — Specify the geographic area (radius, specific cities, states) and the duration. Courts require reasonable scope — a 50-mile radius and 1-year duration for a regional business is more defensible than a nationwide 3-year restriction.

Enable Optional Clauses — Add non-solicitation clauses to prevent poaching clients or employees. Add a confidentiality clause to reinforce trade secret protection alongside the non-compete.

Specify Consideration — The agreement must be supported by consideration (something of value). For new employees, the job offer is consideration. For existing employees, additional benefits, raises, or bonuses must be provided.

Legal Requirements & Notes

CRITICAL STATE-BY-STATE ENFORCEABILITY WARNINGS:

California: Non-compete agreements are void and unenforceable under California Business and Professions Code § 16600, with very limited exceptions (sale of business, dissolution of partnership). Using a California non-compete may violate state law.

Minnesota: Effective January 1, 2023, Minnesota bans non-compete agreements for employees (Minn. Stat. § 181.988). Existing agreements remain in effect.

North Dakota: Non-competes are generally void under N.D.C.C. § 9-08-06.

Oklahoma: Non-competes are generally unenforceable under Okla. Stat. tit. 15, § 219A.

FTC Proposed Rule: The FTC proposed a nationwide ban on non-compete agreements in January 2023. The rule's legal status is subject to ongoing litigation — monitor developments before relying on non-competes.

Other States: States including Illinois, Colorado, Massachusetts, Washington, Virginia, and Oregon have enacted salary thresholds, notification requirements, or other significant restrictions on non-competes. Consult an employment attorney in the applicable state.

Consideration: Courts in many states require that agreements signed by existing employees be supported by adequate new consideration (a raise, bonus, or other benefit) beyond continued employment alone.

Reasonable Scope: Courts generally require that non-competes be narrowly tailored — reasonable in geographic scope, duration, and activity restrictions. Overly broad agreements risk invalidation of the entire restriction.

Frequently Asked Questions

It depends on the state. Non-competes are enforceable in many states when they are reasonably limited in scope, duration, and geography. However, California, Minnesota, North Dakota, and Oklahoma essentially prohibit them. Many other states impose salary thresholds or other requirements. Even in permissive states, courts will not enforce overly broad restrictions.