You might be asked to sign a non-compete agreement before starting a job — or discover one buried in your employment paperwork. These agreements can limit what you do after you leave a company. Understanding what they say, how enforceable they are, and what to do if you’re asked to sign one can protect your career options down the road.
What a non-compete agreement is
A non-compete agreement (also called a non-competition clause or covenant not to compete) is a contract in which you agree not to work for a competitor, start a competing business, or engage in certain activities for a period of time after leaving your employer.
A typical non-compete might say: For 12 months after leaving, you agree not to work for any competing company in the healthcare software industry within the United States.
They appear most often in technology, finance, healthcare, sales, media, and consulting — industries where client relationships, trade secrets, or specialized knowledge are particularly valuable.
What they typically cover
- Duration: How long the restriction lasts. Commonly 6 months to 2 years after departure.
- Geographic scope: The area covered — from a specific city to nationwide.
- Industry or competitor scope: Named competitors, or all companies in a defined space.
- Activity restrictions: Working as an employee, contractor, advisor, or even investor in a competing business.
Are non-competes enforceable?
This is where things get complicated. Enforceability varies dramatically by state.
- California, North Dakota, Oklahoma, and Minnesota have banned or severely restricted non-competes. They are generally unenforceable there.
- Most other states enforce them if they are “reasonable” in scope — meaning the duration, geography, and restrictions are not excessive given the employer’s legitimate business interest.
- Federal: The FTC proposed a rule in 2024 to broadly ban most non-competes. As of 2025, that rule is under legal challenge. The law is in flux — check current status.
Even in states where they’re technically enforceable, employers often don’t sue — litigation is expensive and outcomes are uncertain. But “probably won’t be enforced” is a risk, not a guarantee.
Non-competes vs. related agreements
- Non-solicitation: Prohibits you from soliciting the company’s clients or employees after leaving. Separate from non-compete, and more widely enforced.
- Non-disclosure / confidentiality (NDA): Prohibits sharing confidential business information. Generally enforceable everywhere, regardless of non-compete rules.
- Non-disparagement: Prohibits making negative public statements about the employer.
You may be asked to sign any or all of these. They’re different agreements with different implications.
What to do if you’re asked to sign one
- Read it carefully. Understand exactly what you’re agreeing to — duration, scope, and what “competing” means in the agreement’s language.
- Research your state’s law. If you’re in California or another state that limits enforcement, your exposure is lower. If not, it matters more.
- Ask if it’s negotiable. Scope and duration are often more flexible than employers let on. Asking to narrow the geography, shorten the duration, or exclude certain roles is reasonable.
- Consider consulting an employment attorney if the scope is broad or if you expect to want to move within your industry. A one-time consult can clarify your actual risk.
- Don’t assume it’s unenforceable without checking. Some people sign broad agreements and are surprised when a former employer sends a cease-and-desist letter.
What happens if you violate one
A former employer who wants to enforce a non-compete can send a cease-and-desist letter, seek an injunction to stop you from working, or sue for damages. Even if they ultimately lose, the process is disruptive and expensive for you.
Your new employer may also be drawn into the dispute if they knowingly hired you in potential violation of an agreement. Some companies do check for non-competes before making offers.
Low-wage workers and non-competes
Non-competes have increasingly been used for workers in fast food, retail, and other low-wage jobs — people with no access to trade secrets and whose work involves skills that aren’t particularly specialized. This drew significant regulatory attention. Several states have passed laws limiting non-competes for workers below certain salary thresholds. The FTC’s proposed rule was partly a response to this trend.
What to do if you’ve already signed one and want to leave
- Reread what you signed and note the scope, duration, and geography.
- Research your state’s current enforcement posture.
- Talk to an employment attorney before accepting a competing offer — especially if the agreement is broad and your employer has a history of enforcing them.
- Consider whether the new role actually falls under the agreement’s definition of “competing.” Many agreements are drafted broadly but only technically apply to a narrow set of situations.
Further Reading
- How to Read a Job Offer
- How to Write a Two-Week Notice
- What to Do After Losing a Job
- Jobs & Career
- Money Basics
This article is for general educational purposes only and does not constitute legal advice. Non-compete enforceability varies by state and is subject to change. Consult an employment attorney for guidance specific to your agreement and location.