Non-Compete Agreement FAQ

A non-compete agreement restricts a person from working for competitors or starting a competing business for a specified period after leaving a company. The restrictions typically cover a defined time period, geographic area, and type of competing activity.

It depends heavily on the state. California bans them entirely. States like Florida and Texas generally enforce reasonable ones. States like Massachusetts and Washington have added restrictions. The trend is toward more limitations, but most states still enforce reasonable non-competes.

You can refuse, but the employer may make it a condition of employment. In some states, existing employees must receive additional consideration (like a raise or promotion) for a new non-compete to be enforceable. In California, you have every right to refuse — non-competes are void.

Courts typically evaluate three factors: (1) reasonable time period (usually 6 months to 2 years), (2) reasonable geographic scope (your actual market area, not nationwide), and (3) reasonable activity restrictions (specifically defined competing activities, not any job in the industry).

No. California Business & Professions Code Section 16600 makes non-compete agreements void, with a narrow exception for the sale of a business. SB 699 (2024) extends this protection to employees of California companies working anywhere.

California bans them entirely. Minnesota, North Dakota, and Oklahoma also broadly restrict them. States like Colorado, Illinois, Maine, Maryland, Oregon, Virginia, and Washington have enacted significant restrictions, often including income thresholds below which non-competes are void.

Common alternatives include: NDAs (protect specific confidential information), non-solicitation clauses (prevent recruiting clients or employees), garden leave provisions (paid leave during transition), IP assignment agreements, and clawback provisions on bonuses or equity.