Free Employee Non-Compete Agreement Template

Employee Non-Compete Agreement Template

An employee non-compete agreement restricts an employee from working for competitors or starting a similar business within a defined geographical area and period after leaving a company. These agreements protect trade secrets, client relationships, and other sensitive business interests.

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Last updated June 17th, 2025

An employee non-compete agreement restricts an employee from working for competitors or starting a similar business within a defined geographical area and period after leaving a company. These agreements protect trade secrets, client relationships, and other sensitive business interests.

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Is It Legal?

Non-compete agreements are enforceable in most states, but they’re banned or heavily restricted in:

  • California, North Dakota, Oklahoma, Washington, D.C.

Some states also require specific notice periods or additional compensation (e.g., Massachusetts and Oregon do not allow non-competes to be introduced after employment begins).

Consideration Requirements

To be valid, the agreement must offer something in return. This could include:

  • A new job offer
  • A promotion or raise
  • A bonus or cash payment

Merely continuing employment may not be enough in all states.

Core Agreement Terms to Include

  • Restricted Industry or Activities
  • Geographic Scope (e.g., 50 miles from company HQ)
  • Timeframe (usually 6–24 months)
  • Non-Solicitation Terms (restricting contact with clients or coworkers)
  • Release Option (whether the employee can “buy out” of the agreement)
  • Governing Law (which state’s laws apply)

How to Use This Agreement

  1. Define both parties (employer and employee) and contact info
  2. Specify what the employee is restricted from doing, where, and for how long
  3. Include consideration (e.g., job offer, promotion)
  4. Add any extra terms (e.g., non-solicitation, buyout clause)
  5. Both parties sign and date the agreement

 

State Laws

State Is continued employment treated as sufficient consideration? Laws
 Alabama Yes Daughtry v. Capital Gas Company (1970)
 Alaska Courts have not addressed this issue. –
 Arizona Yes Mattison v. Johnston (1986)
 Arkansas Yes Ark. Code § 4-75-101(g)
 California Non-competes are prohibited for employment purposes. Sections 16600-16607
 Colorado Yes Lucht’s Concrete Pumping, Inc. v. Horner (2011)
 Connecticut No Torrington Creamery, Inc. v. Davenport (1940), Van Dyck Printing Co. v. DiNicola (1993)
 Delaware Yes All Pro Maids, Inc. v. Layton (2004)
 Florida Yes Balasco v. Gulf Auto Holding, Inc. (1998)
 Georgia No Glisson v. Global (2007)
 Hawaii Yes Standard Register Co. v. Keala (2015)
 Idaho Yes § 44-2704(1)
 Illinois Yes, if there is a promise of employment for at least 2 years. Fifield v. Premier Dealer Servs., Inc. (2013)
 Indiana Yes Ackerman v. Kimball Intern., Inc. (1995)
 Iowa Yes Iowa Glass Depot, Inc. v. Jindrich (1983)
 Kansas Yes Puritan-Bennett Corp. v. Richter (1983)
 Kentucky No Charles T. Creech, Inc. v. Brown (2014)
 Louisiana Yes Cellular One, Inc. v. Boyd (1995)
 Maine Yes Brignull v. Albert (1995)
 Maryland Yes Simko, Inc. v. Graymar Co. (1983)
 Massachusetts No Intepros, Inc. v. Paul Athy (2013)
 Michigan For at-will employment only. Lowry Computer Products, Inc. v. Head (1997)
 Minnesota No Witzke v. Mesabi Rehabilitation Services, Inc. (2008)
 Mississippi Yes Frierson v. Sheppard Bldg. Sup. Co. (1963), Raines v. Bottrell Insurance Agency, Inc. (2008)
 Missouri Yes Comput. Sales Int’l, Inc. v. Collins (1986)
 Montana Non-competes are prohibited for employment purposes. MCA § 28-2-703
 Nebraska Yes Securities Acceptance Corp. v. Brown (1960)
 Nevada Yes Camco, Inc. v. Baker (1997)
 New Hampshire Yes Smith, Batchelder & Rugg v. Foster (1979)
 New Jersey Yes Hogan v. Bergen Brunswig Corp. (1977)
 New Mexico Yes Nichols v. Anderson (1939)
 New York Yes Zellner v. Conrad (1992)
 North Carolina No Hejl v. Hood, Hargett & Associates, Inc. (2009)
 North Dakota Non-competes are prohibited for employment purposes. § 9-08-06
 Ohio Yes Lake Land Employment Group of Akron, LLC v. Columber (2004)
 Oklahoma Non-competes are prohibited for employment purposes. Okla. Stat. tit. 15 § 217
 Oregon No ORS 653.295(1)(B)
 Pennsylvania No George W. Kistler, Inc. v. O’Brien (1975)
 Rhode Island Yes Nestle Food Co. v. Miller (1993)
 South Carolina No Poole v. Incentives Unlimited (1999)
 South Dakota Yes § 53-8-7
 Tennessee Yes Central Adjustment Bureau, Inc. v. Ingram (1984)
 Texas No CRC-Evans Pipeline International, Inc. v. Myers (1996)
 Utah Yes System Concepts, Inc. v. Dixon (1983)
 Vermont Yes Summits 7, Inc. v, Kelly (2005)
 Virginia Yes Mona Electric Group, Inc. v. Truland Service Corp. (2002)
 Washington No RCW 49.62.020
Washington D.C. Non-competes are prohibited for employment purposes. D.C. Law 23-209
West Virginia No Environmental Products Co. v. Duncan (1981)
 Wisconsin No Runzheimer Int’l, Ltd. v. Friedlen (2015)
 Wyoming No Jennifer Brown v. Best Home Health & Hospice LLC (2021)

 

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