A non-compete agreement restricts competing activity after a relationship ends — enforceable only where reasonable in duration (6–24 months typical), geography (the actual market area), and scope (the actual role/business, not all employment), supported by consideration, and protecting legitimate interests (trade secrets, customer relationships). The state landscape is decisive: California, Minnesota, Oklahoma, and North Dakota void employee non-competes almost entirely; many states impose salary floors; the FTC's attempted nationwide ban was struck down but signaled the direction. Non-solicits and NDAs are the more enforceable, often sufficient alternatives. Sale-of-business non-competes are enforced far more readily than employment ones.
Free Non-Compete Agreement Template
Reviewed by the Agiled editorial teamUpdated June 2026
The non-compete is the most jurisdiction-dependent document in common business use: the same paragraph is enforceable in Florida, judicially rewritten in...
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Full template text
Below is a comprehensive non-compete agreement template you can adapt for your specific needs. Replace all bracketed placeholders with the relevant details before signing.
NON-COMPETE AGREEMENT
This Non-Compete Agreement ("Agreement") is entered into as of [Date], by and between:
Company: [Company Legal Name], a [State of Incorporation] [corporation/LLC/partnership], with its principal place of business at [Company Address] ("Company"),
and
Restricted Party: [Individual's Full Legal Name], residing at [Individual's Address] ("Restricted Party").
Company and Restricted Party are each referred to as a "Party" and collectively as the "Parties."
1. Recitals and Purpose
WHEREAS, the Company possesses valuable trade secrets, proprietary information, customer relationships, and business goodwill developed through substantial investment of time and resources;
WHEREAS, the Restricted Party [is being employed by / has been engaged by / is acquiring a business interest from] the Company and will have access to confidential business information;
WHEREAS, the Company has a legitimate business interest in protecting its competitive position and proprietary assets;
NOW, THEREFORE, in consideration of the mutual promises and covenants set forth herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
2. Non-Compete Covenant
During the Restricted Period and within the Geographic Scope defined herein, the Restricted Party shall not, directly or indirectly:
(a) Own, manage, operate, control, be employed by, consult for, participate in, or be connected in any manner with the ownership, management, operation, or control of any business that competes with the Company's business as described in Exhibit A;
(b) Solicit, divert, or take away any customers, clients, or accounts of the Company that the Restricted Party had contact with or knowledge of during the relationship with the Company;
(c) Recruit, solicit, or induce any employee, contractor, or consultant of the Company to leave the Company's service or to breach any agreement with the Company.
3. Geographic Scope
The restrictions set forth in this Agreement shall apply within the following geographic area: [Specify city, county, state, region, or describe market segment — e.g., "within a 50-mile radius of the Company's principal office" or "within the states where the Company actively conducts business as of the date of this Agreement"].
4. Duration
The non-compete obligations in this Agreement shall remain in effect for a period of [Number] months/years following the termination or expiration of the Restricted Party's relationship with the Company, regardless of the reason for termination ("Restricted Period").
5. Consideration
In exchange for the Restricted Party's agreement to the covenants in this Agreement, the Company shall provide the following consideration:
(a) [For new hires: Employment with the Company, including all associated compensation and benefits];
(b) [For existing employees: A one-time payment of $[Amount] / a salary increase of [Percentage]% / grant of [Number] stock options / other: describe];
(c) [For business sales: The purchase price and associated deal terms set forth in the [Purchase Agreement] dated [Date]].
The Restricted Party acknowledges that the consideration described above is adequate and sufficient.
6. Permitted Activities
Notwithstanding the restrictions above, the Restricted Party may:
(a) Own up to [Percentage]% of the outstanding shares of any publicly traded company, provided the Restricted Party does not otherwise participate in the management or operations of such company;
(b) Engage in employment or business activities in industries or roles that do not compete with the Company's business as described in Exhibit A;
(c) [Any additional carve-outs specific to the arrangement].
7. Remedies
The Restricted Party acknowledges that a breach of this Agreement would cause irreparable harm to the Company that cannot be adequately compensated by monetary damages alone. In the event of a breach or threatened breach, the Company shall be entitled to:
(a) Injunctive relief, including temporary restraining orders, preliminary injunctions, and permanent injunctions, without the necessity of proving actual damages or posting a bond;
(b) Recovery of all actual damages sustained as a result of the breach;
(c) Recovery of reasonable attorneys' fees, court costs, and expenses incurred in enforcing this Agreement;
(d) Any other remedies available at law or in equity.
These remedies are cumulative and not exclusive of any other remedies available to the Company.
8. Severability
If any provision of this Agreement is found by a court of competent jurisdiction to be invalid, illegal, or unenforceable, such provision shall be modified to the minimum extent necessary to make it valid, legal, and enforceable. If such modification is not possible, the provision shall be severed from this Agreement, and the remaining provisions shall continue in full force and effect.
9. Governing Law
This Agreement shall be governed by and construed in accordance with the laws of the State of [State], without regard to its conflict of law provisions. Any disputes arising under this Agreement shall be resolved in the state or federal courts located in [County, State], and each Party consents to the exclusive jurisdiction of such courts.
10. Entire Agreement
This Agreement, together with any exhibits and schedules attached hereto, constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior or contemporaneous understandings, agreements, negotiations, representations, and warranties, both written and oral, with respect to such subject matter.
11. Amendments
No amendment or modification of this Agreement shall be valid unless made in writing and signed by both Parties.
12. Signatures
IN WITNESS WHEREOF, the Parties have executed this Non-Compete Agreement as of the date first written above.
COMPANY
Signature: ____________________________
Name: [Authorized Representative Name]
Title: [Title]
Date: ____________________________
RESTRICTED PARTY
Signature: ____________________________
Name: [Individual's Full Legal Name]
Date: ____________________________
EXHIBIT A — Description of Company's Business
[Provide a detailed description of the Company's business activities, products, services, and markets that are subject to the non-compete restrictions.]
- Duration
- 6 – 24 months, typical
- Void states
- CA, MN, OK, ND (employees)
- Salary floors
- Many states — check yours
- Sale of business
- Far more enforceable
What your non-compete agreement should cover
The restricted activity, narrowly
What's actually prohibited: working in the same role/function for a defined competitor set or business type — not 'any employment in the industry.' The narrower the definition, the likelier enforcement; the broad version risks total invalidation in red-pencil states that won't rewrite.
Duration
6–12 months for most employees, up to 24 for senior executives with deep customer or strategy exposure — courts increasingly trim beyond that. The honest question the term should answer: how long until the protected information goes stale?
Geography
The employer's actual market: a metro radius for local businesses, named territories for regional ones, and for genuinely national/remote roles, a customer-based or competitor-named definition instead of geography — 'everywhere' fails reasonableness almost everywhere.
Consideration
What the worker gets: at hire, the job itself suffices in most states; mid-employment, many states demand new value (a raise, bonus, promotion — continued employment alone fails in a growing list). Garden-leave pay during the restricted period is the gold standard and several states' statutory requirement for enforceability.
Legitimate protectable interest
The recital that carries the document: trade secrets, confidential business information, customer relationships, specialized training investment — stated specifically. 'Avoiding competition' is not a protectable interest anywhere; the clause should name what actually walks out the door.
The state-law reality
California, Minnesota, Oklahoma, and North Dakota void employee non-competes nearly entirely; Colorado, Washington, Illinois, and others impose salary thresholds and notice requirements; some require advance notice before the first day. The choice-of-law clause can't launder a void restraint — courts apply their own public policy.
Non-solicitation, the workhorse
The customer non-solicit (don't take the clients you served, 12–24 months) and employee non-solicit (don't raid the team) — more enforceable than non-competes in every jurisdiction, survivable even in California in trade-secret-protective forms, and often all the protection actually needed.
Confidentiality companion
The NDA layer that needs no geography or duration debate: trade secrets protected as long as they're secret, confidential information defined, and return-of-materials obligations on exit. The layer that always survives.
Severability and blue-pencil terms
If a court finds the restraint too broad: severability plus a reformation request (where state doctrine allows judicial narrowing) — knowing that 'red pencil' states strike overbroad clauses entirely, which is the drafting argument for starting narrow.
Remedies
Injunctive relief acknowledged as appropriate (money can't un-take a client list), the tolling clause (the restricted period extends by violation time), and fee-shifting — drafted knowing some states now penalize employers for suing on unenforceable non-competes.
Non-compete enforceability landscape (U.S., 2026)
| Factor | Common standard | Notes |
|---|---|---|
| Typical duration | 6 – 24 months | Shorter trends stronger |
| Void-by-statute states | CA, MN, OK, ND | Employee non-competes |
| Salary-floor states | CO, WA, IL, OR, others | Thresholds adjust annually |
| Notice requirements | Before offer / 14+ days | Several states |
| Mid-employment consideration | New value required | Many states |
| Sale-of-business restraints | Broadly enforced | Even in California |
| Non-solicit duration | 12 – 24 months | More enforceable everywhere |
This area moves fast: the FTC's 2024 nationwide ban was struck down in litigation, but state legislatures keep narrowing enforceability. Check current state law before relying on any restraint — and before suing on one.
How non-compete agreements work in practice
The departing salesperson
The non-compete's most common deployment — and usually the wrong tool: what the employer actually fears is the book of business walking out, and the customer non-solicit covers exactly that, enforceably, almost everywhere. The layered draft: NDA (the pricing sheets and pipeline data), customer non-solicit (the accounts they touched, 18 months), employee non-solicit (the team), and only then a narrow non-compete (same role, named competitors, their actual territory, 12 months) where the state allows. The employer who leads with the broad non-compete in a hostile state often ends up with nothing — the layered version degrades gracefully.
The sale of a business
The seller's non-compete is the exception to every employee-protective rule: courts — including California's, by statutory carve-out — routinely enforce restraints on someone who was paid for the goodwill they'd otherwise destroy. The buyer's draft can be genuinely broad: 3–5 years, the business's full market area, the business's full scope — because the consideration is the purchase price and the protected interest is the asset itself. The drafting care points: tie the restraint to the goodwill purchased, run it from closing (not from any later employment's end), and paper it inside the purchase agreement, not as an employment afterthought.
The remote-work jurisdiction puzzle
A Delaware-incorporated company, a Texas choice-of-law clause, and an employee working from California: the restraint is void, and the choice-of-law clause won't save it — California courts apply their own public policy to California workers, and statute now exposes employers to liability for even attempting to enforce void restraints against them. The modern drafting posture for distributed teams: assume the most protective state's rules for each worker's location, lead with NDAs and non-solicits (which travel well), reserve true non-competes for the executives and states where they work, and never copy-paste one agreement across a fifty-state workforce.
Mistakes that weaken a non-compete agreement
Drafting broad and hoping courts trim
Red-pencil states strike overbroad restraints whole; even reformation states punish greed with skeptical judges. Start at the narrowest restraint that protects the real interest — more of it survives everywhere.
Ignoring the worker's state
A choice-of-law clause doesn't move the employee out of California. Enforceability follows the worker's jurisdiction, and several states now penalize employers for trying void restraints. Map the workforce first.
Mid-employment non-competes for free
Having existing staff sign 'or else' fails the consideration requirement in many states. New restraints need new value — a raise, a bonus, a promotion — and the paper should recite it.
Using a non-compete where a non-solicit suffices
The fear is usually the clients and the team, not employment itself. Non-solicits are enforceable nearly everywhere, cheaper to litigate, and don't make every offer letter a negotiation.
Restraining everyone
Non-competes for receptionists and line cooks are the practice that brought the regulatory backlash — and salary-floor statutes now void them outright. Restrain only roles with genuine trade-secret or customer exposure.
How to use this template
- 01
Check the worker's state law first — void states, salary floors, notice rules.
- 02
Download the non-compete agreement template in Word or PDF.
- 03
Name the legitimate interest: the specific secrets, relationships, or training.
- 04
Draft narrow: actual role, actual market, 6–24 months, named competitors where possible.
- 05
Layer it: NDA and non-solicits carry most of the protection enforceably.
- 06
Provide real consideration — and notice where statute requires — then sign.
Skip this template if…
- Protecting information alone — an NDA does that job without geography or duration vulnerabilities.
- California, Minnesota, Oklahoma, or North Dakota employees — lead with NDAs and trade-secret-protective non-solicits instead.
FAQs
Are non-compete agreements enforceable?
It depends almost entirely on the state: California, Minnesota, Oklahoma, and North Dakota void employee non-competes nearly entirely; many states impose salary floors and notice requirements; the rest enforce restraints that are reasonable in duration, geography, and scope and protect a legitimate interest. The FTC's attempted nationwide ban was struck down, but the state-by-state narrowing continues.
How long can a non-compete last?
6–12 months holds up best for most employees, with up to 24 months defensible for senior executives with deep customer or strategic exposure. Courts increasingly trim or void longer terms. The principled measure: how long before the protected information goes stale — not how long the employer would enjoy less competition.
What makes a non-compete reasonable?
Three axes plus a foundation: duration matched to the information's shelf life, geography matched to the actual market (or a named-competitor definition for remote roles), restricted activity matched to the actual role — all supported by real consideration and a named protectable interest (trade secrets, customer relationships, specialized training). 'No competition anywhere doing anything' fails everywhere.
What's the difference between a non-compete and a non-solicit?
A non-compete restricts working for competitors at all; a non-solicit only bars taking the clients you served and recruiting your former colleagues. Non-solicits are enforceable in nearly every jurisdiction — including protective ones — cheaper to litigate, and cover the harm employers usually actually fear. The layered draft uses both, leaning on the non-solicit.
Can my employer make me sign a non-compete after I'm hired?
Only with new consideration in many states — continued employment alone increasingly fails. A raise, bonus, promotion, or equity grant tied to the signing satisfies the requirement; several states also require advance notice (sometimes 14+ days) before any non-compete takes effect, even at hire.
Are non-competes enforceable when selling a business?
Far more readily than employment restraints — even California enforces sale-of-business non-competes by statutory exception, because the seller was paid for the goodwill the restraint protects. Buyers can reasonably demand 3–5 years across the business's full market and scope, papered inside the purchase agreement with the restraint tied explicitly to the goodwill purchased.
Non-Compete Agreement Template requirements by state
State law fills in this template's blanks — deadlines, caps, and enforceability rules differ meaningfully across state lines. Pick your state for the specific rules:
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