Non-Compete Agreements, Explained

A non-compete is a promise not to work for a competitor, or start a competing business, for some period after you leave a job or sell a company. The idea is to protect legitimate interests like trade secrets and customer relationships. The catch is that whether a non-compete actually holds up varies enormously — some places enforce them narrowly, and others barely at all.

What a non-compete tries to do

• Stop a departing employee from taking know-how straight to a rival
• Protect customer relationships and confidential information
• Give a buyer confidence that a seller won't relaunch the same business next door
• Set expectations about where and how someone can work afterward

Why enforceability varies so much

Courts weigh a non-compete against a person's right to earn a living, and they look at whether it's reasonable:

• Scope — a narrow, specific restriction fares far better than a sweeping one
• Duration — shorter periods are more likely to be upheld
• Geography — a limited area is easier to justify than "anywhere"
• Local law — some jurisdictions restrict or refuse to enforce them entirely

Before you sign — or enforce

If you're being asked to sign one, understand exactly what it restricts and for how long. If you're an employer relying on one, make sure it's reasonable enough to actually stand up. Because outcomes hinge on local rules, this is a term where jurisdiction-specific advice is especially valuable.