Non-compete clauses: are they enforceable, and what to watch for
What is a non-compete clause?
Non-competes limit competitive activity for a period after the relationship ends. Courts weigh whether the restriction is reasonable in duration, geography, and scope, and whether it protects a legitimate interest. Enforceability varies widely by jurisdiction.
Why it matters
An overbroad non-compete can limit your ability to earn a living or grow your business long after the deal is over. Even unenforceable clauses can chill behavior because few want to litigate.
Red flags to watch for
- Duration longer than 12 months
- Geography broader than where the business actually operates
- Scope covering work unrelated to the actual engagement
- No consideration (nothing given in exchange for the restriction)
- Restrictions on soliciting any employee or customer, not just those you worked with
Safer language to ask for
Narrow the restriction to the specific market and clients involved, cap duration at 6–12 months, and limit geography to where the business genuinely competes.
Example: before & after
Risky
For three years after termination, the Contractor shall not engage in any business that competes with the Company anywhere in the world.
Safer
For 12 months after termination, the Contractor shall not provide services substantially similar to those provided here to the Company's direct competitors in [region].
FAQ
Are non-competes enforceable?
It depends heavily on jurisdiction and reasonableness. Some places ban them for employees outright; others enforce narrow, reasonable ones.
What makes a non-compete unenforceable?
Excessive duration, geography, or scope; lack of a legitimate protectable interest; or no consideration given in return.
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