Is My Non-Compete Enforceable?
Non-compete agreements (also called restrictive covenants or covenants not to compete) restrict an employee's ability to work for competitors or start a competing business after leaving their employer. But not all non-competes are enforceable — courts scrutinize them carefully because they restrict a person's ability to earn a living.
The Reasonableness Test
Most states evaluate non-competes using a reasonableness test that examines three key factors:
1. Duration
Courts generally consider 6 months to 2 years reasonable
Restrictions longer than 2 years are frequently struck down
Some industries may warrant shorter or longer periods depending on the nature of the work
2. Geographic Scope
The restricted area must be related to where the employer actually does business
A nationwide restriction for a local business is likely unenforceable
With remote work and internet businesses, geographic restrictions have become more complex
3. Scope of Activities
The restriction must be limited to activities that genuinely compete with the employer
Preventing you from working in an entirely different industry is likely unenforceable
The more narrowly the restricted activities are defined, the more likely the agreement will be upheld
State-by-State Variations
Non-compete enforcement varies dramatically by state:
California — Non-competes are virtually unenforceable (Business and Professions Code Section 16600). Employers cannot restrict former employees from working for competitors.
Oklahoma, North Dakota, Minnesota — also broadly prohibit non-compete agreements
Colorado, Illinois, Oregon, Washington — have enacted laws limiting non-competes for lower-wage workers (typically those earning below a certain threshold)
Texas, Florida, Georgia — generally enforce reasonable non-competes but apply strict scrutiny
Massachusetts — requires "garden leave" pay during the restricted period
What Makes a Non-Compete More Likely Enforceable?
The employee received something of value (consideration) in exchange — a job offer, promotion, bonus, or access to trade secrets
The employer has a legitimate business interest to protect — trade secrets, customer relationships, specialized training
The restrictions are narrowly tailored to protect that interest
The employee had access to truly confidential or proprietary information
What Makes a Non-Compete Less Likely Enforceable?
The employee was terminated without cause (some states won't enforce non-competes against fired employees)
No additional consideration was provided (the employee was already employed when asked to sign)
The restrictions are so broad they effectively prevent the person from working at all
The employee did not have access to trade secrets or significant customer relationships
The employee is a low-wage worker — many states now prohibit non-competes below certain income thresholds
Blue-Penciling
Blue-penciling refers to a court's ability to modify an overly broad non-compete rather than striking it down entirely. Courts in some states will:
Reduce the duration (e.g., from 5 years to 1 year)
Narrow the geographic scope
Limit the restricted activities
Other states follow the all-or-nothing rule — if the non-compete is unreasonable, the entire agreement is void.
What to Do If You Have a Non-Compete
Read it carefully — understand exactly what is restricted
Check your state's law — some states severely limit or ban non-competes
Consult an employment attorney — especially before starting a new job or business
Negotiate before signing — it's much easier to modify a non-compete before you sign it
Document your independent knowledge — show that your skills and contacts existed before the employment
Disclaimer: This guide is for informational purposes only. Non-compete law is complex and state-specific. Consult an employment attorney for advice about your particular agreement.