What it is
A non-compete clause restricts you from working for competitors, starting a competing business, or operating in a defined geographic area for a set period after your employment ends. Enforceability varies wildly by state.
Why it matters
California, North Dakota, Oklahoma, and Minnesota largely refuse to enforce non-competes for employees. Other states only enforce 'reasonable' restrictions in scope, geography, and duration. The clause may be unenforceable — but most workers don't know that and comply anyway.
Sample clause language
"For a period of 24 months following termination, Employee shall not directly or indirectly engage in any business that competes with Company anywhere in the United States."
What it really means: 24 months and nationwide is overly broad in most states and likely unenforceable. Reasonable scope is typically 6–12 months and limited to a specific city, industry, or client list.
Red flags
- Duration over 12 months
- Geographic scope larger than where you actually work
- 'Any business that competes' — undefined
- Triggers even if you're laid off
- No consideration paid for the restriction
Fair / acceptable
- 6–12 month duration
- Limited geography (city or specific clients)
- Industry/role narrowly defined
- Doesn't apply if employer terminates without cause
- Clear consideration (signing bonus, severance)
How to negotiate
- Cut duration to 6–12 months
- Limit to specific named competitors or clients
- Add 'severance pay during restricted period' clause
- Require employer-paid release if they terminate you
Frequently asked questions
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Not legal advice. For informational purposes only.