High RiskEmployment · found in 38% of contracts

Non-Compete

You can't work for competitors for a set time after leaving. Enforceability varies widely by state.

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Found in 38% of contracts
What It Actually Means

A non-compete agreement (also called a restrictive covenant) prohibits you from working for competitors — or starting a competing business — for a defined period after leaving. Courts across the country take wildly different views on enforceability. California, North Dakota, Oklahoma, and Minnesota have banned most non-competes entirely. Other states (like Florida) enforce them very aggressively. Even unenforceable non-competes can create real-world harm: an employer can sue you, requiring you to spend money on legal defense even if you ultimately win. The key variables are geographic scope (city vs. nationwide), duration (6 months vs. 3 years), and the definition of 'competitor.' Overly broad non-competes that cover any business in your entire industry are the most dangerous. The FTC attempted a nationwide ban in 2024 but it was blocked by courts — the legal landscape is still evolving.

Red Flags — When to Push Back
Geographic scope is nationwide or global (beyond where you actually worked)
Duration exceeds 12 months
'Competitor' is defined to include any company in your industry
Applies to you as a client of the company, not just an employee
No compensation or consideration offered in exchange for the restriction
What to Do — Negotiation Guidance

Check your state's law immediately — if you're in California, Minnesota, Oklahoma, or North Dakota, the clause is likely unenforceable. In other states, negotiate for: (1) limited geography to your actual work territory, (2) duration of 6 months or less, (3) narrow definition of competitor, and (4) additional compensation for signing. An employment attorney can tell you exactly what's enforceable in your jurisdiction.

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