Non-Compete Agreement Template, Free Download 2026
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When Do You Need a Non-Compete Agreement?
You are onboarding a new employee in a senior, sales, or technical role who will have access to trade secrets, proprietary customer lists, pricing strategies, or confidential business methods, and you need a legally enforceable restriction on post-employment competition.
A key employee or executive is resigning to join a competitor, and you need to review or enforce the non-compete they signed at hire to prevent the immediate transfer of your confidential strategies, client relationships, and institutional knowledge to a direct rival.
Your company is acquiring another business and wants the selling owners and key personnel to sign non-competes as part of the purchase agreement to protect the goodwill and customer base you are paying for, these sale-of-business non-competes receive broader judicial enforcement than employment non-competes.
You are hiring an independent contractor (use our independent contractor agreement template) or consultant who will be exposed to highly sensitive proprietary information and want to include a reasonable non-competition provision in the engagement agreement or as a standalone document.
A departing employee has signed an employment agreement sample document with non-compete provisions, but the terms need to be updated, narrowed, or extended as part of a promotion, role change, or severance negotiation to ensure continued enforceability under current state law.
What Should a Non-Compete Agreement Include?
Restricted Activities Definition
Precisely define what competitive activities the restricted party is prohibited from engaging in. A well-drafted non-compete clause template specifies the types of products, services, industries, or roles that are restricted rather than using a blanket prohibition on "any competitive business." Courts are far more likely to enforce narrowly tailored activity restrictions that protect a legitimate business interest without preventing the individual from earning a living in their general field.
Geographic Scope
Specify the geographic area where the non-compete restriction applies. This may be defined by radius (e.g., 25 miles from the employer's offices), by specific cities, counties, or states, or by the territories or markets where the employer actively conducts business. An overly broad geographic restriction, such as "worldwide" for a local service company, is a common reason courts strike down or reform non-compete agreements.
Duration of the Restriction
State the time period during which the non-compete is in effect after the relationship ends. Most enforceable employment non-competes range from 6 months to 2 years, with 12 months being the most commonly upheld duration. Sale-of-business non-competes may extend to 3 to 5 years. The duration should be proportional to the sensitivity of the information the restricted party accessed and the time it would take for that information to become stale or for the employer to re-establish client relationships.
Consideration Clause
A non-compete must be supported by valid consideration, something of value given in exchange for the restriction. For new employees, the offer of employment itself is generally sufficient consideration. For existing employees, many states require new consideration beyond continued employment, such as a promotion, raise, bonus, stock options, access to new confidential information, or a severance payment. The Department of Labor provides guidance on how restrictive covenants intersect with wage and hour obligations. Without adequate consideration, the agreement may be unenforceable from the start.
Legitimate Business Interest Statement
Identify the specific business interests the non-compete is designed to protect. Courts require that a non-compete serve a legitimate purpose, such as protecting trade secrets (as defined under the Defend Trade Secrets Act), confidential customer information, specialized training investments, or business goodwill acquired through a sale. A non-compete that merely prevents ordinary competition without a protectable interest will not survive judicial scrutiny.
<strong>Non-Solicitation</strong> and Non-Recruitment Provisions
Many non-compete agreements include companion provisions that prohibit the restricted party from soliciting the employer's customers, clients, or accounts (non-solicitation) and from recruiting or hiring the employer's employees (non-recruitment). These provisions are often enforced even in jurisdictions that disfavor traditional non-competes, making them a critical backup protection.
Remedies and Injunctive Relief
Specify that a breach of the non-compete will cause irreparable harm not adequately compensable by money damages, entitling the employer to seek injunctive relief, a court order prohibiting the violation, in addition to monetary damages. Including a tolling provision that extends the restricted period by the length of any violation ensures the employer receives the full benefit of the bargain.
Severability and Judicial Modification
Include a clause allowing a court to modify (or "blue pencil") any provision found to be overbroad rather than invalidating the entire agreement. Many states permit judicial reformation of unreasonable non-competes, and a severability clause signals to the court that the parties intended for the agreement to be enforced to the maximum extent permitted by law.
Legal Details: Key Clauses in a Non-Compete Agreement
Parties
This Non-Compete Agreement ("Agreement") is entered into as of the Effective Date set forth above between [Company Name], a [State] [entity type] with its principal place of business at [Address] ("Company"), and [Individual Name], an individual residing at [Address] ("Restricted Party"). The Parties acknowledge that this Agreement is ancillary to and made in connection with [an employment agreement / offer of employment / sale of business / partnership agreement] between the Parties dated [Date].
Restricted Party acknowledges that by virtue of Restricted Party's [employment with / business relationship with] the Company, Restricted Party has had and will continue to have access to the Company's trade secrets, Confidential Information, customer relationships, and specialized training, the protection of which constitutes a legitimate business interest justifying the restrictions set forth in this Agreement.
Consideration
[FOR NEW EMPLOYEES:] The mutual promises contained in this Agreement and the Company's offer of employment, including access to Confidential Information, specialized training, and customer relationships, constitute adequate and sufficient consideration for Restricted Party's obligations hereunder. [FOR EXISTING EMPLOYEES:] In consideration of [continued employment and/or $Amount / promotion / equity grant / access to additional Confidential Information / other consideration], which Restricted Party acknowledges constitutes adequate, independent, and sufficient consideration, Restricted Party agrees to be bound by the restrictions set forth herein.
Restricted Party acknowledges that the consideration received is fair and reasonable and that this Agreement would not have been entered into by the Company absent Restricted Party's agreement to the restrictive covenants contained herein. In jurisdictions that require additional consideration for non-compete agreements with existing employees, the Parties agree that the consideration described above satisfies any such requirement.
Restricted Activities
During the Restricted Period, Restricted Party shall not, directly or indirectly, whether as an employee, officer, director, partner, member, owner, investor (other than a passive investment of less than two percent (2%) of the outstanding shares of a publicly traded company), consultant, independent contractor, advisor, agent, or in any other capacity: (a) engage in any Competing Business; (b) establish, operate, manage, or control any Competing Business; (c) be employed by, render services to, or consult for any Competing Business; or (d) assist any person or entity in engaging in any Competing Business.
"Competing Business" means any business, enterprise, or activity that develops, produces, markets, distributes, sells, or provides [specific products/services] that are substantially similar to or competitive with the products and services offered by the Company as of the date of Restricted Party's separation, or that were in active development by the Company during the last [twelve (12)] months of Restricted Party's [employment / engagement]. The Parties intend this definition to encompass direct competitors and not to extend to businesses that are merely tangentially related to the Company's core operations.
The restrictions set forth in this Article shall not prohibit Restricted Party from: (a) owning a passive investment of less than two percent (2%) of the outstanding equity securities of any publicly traded company; (b) engaging in employment, consulting, or business activities that do not involve Competing Business activities within the Restricted Territory; or (c) performing work in a department, division, or capacity of an otherwise competitive entity that is functionally separate from and does not involve the competitive activities described herein, provided Restricted Party implements appropriate safeguards to prevent the disclosure of the Company's Confidential Information.
Geographic Scope
The restrictions set forth in this Agreement shall apply within the following geographic area (the "Restricted Territory"): [Specific description, e.g., a radius of X miles from Company's principal place of business / the states or metropolitan areas in which the Company conducts business / the specific counties, cities, or regions where Restricted Party performed services or had customer contact]. The Restricted Territory is limited to the geographic areas where the Company has established goodwill, customer relationships, or business operations and where Restricted Party's competitive activities would pose a genuine threat to the Company's legitimate business interests.
The Parties acknowledge that the geographic scope is reasonable and narrowly tailored to protect the Company's legitimate business interests in the specific markets where Restricted Party had material responsibilities, customer relationships, or access to market-specific Confidential Information. If a court of competent jurisdiction determines that the Restricted Territory is overbroad, the Parties request that the court reduce the geographic scope to the minimum extent necessary to render the restriction enforceable.
Duration
The restrictions set forth in this Agreement shall remain in effect for a period of [Number] months/years following the termination of Restricted Party's [employment / engagement] with the Company for any reason, whether voluntary or involuntary, with or without cause (the "Restricted Period"). The Restricted Period shall be tolled during any period in which Restricted Party is in violation of the covenants set forth herein, such that the Restricted Period shall be extended by the duration of any such violation.
If a court of competent jurisdiction determines that the Restricted Period is longer than is necessary to protect the Company's legitimate business interests, the Parties agree that the court may reduce the Restricted Period to the maximum duration that the court deems reasonable and enforceable under applicable law. The Parties intend the Restricted Period to be interpreted and enforced to the fullest extent permitted by the law of the governing jurisdiction.
Legitimate Business Interests
Restricted Party acknowledges that the Company has invested substantial time, resources, and capital in developing its trade secrets, proprietary business processes, customer relationships, vendor relationships, workforce stability, and goodwill, and that these constitute protectable legitimate business interests under applicable law. Restricted Party further acknowledges that Restricted Party's position provided access to the Company's most sensitive Confidential Information, strategic plans, and key customer and vendor relationships, the misappropriation or exploitation of which would cause substantial and irreparable competitive harm to the Company.
Restricted Party acknowledges receiving specialized training, mentoring, and professional development from the Company that enhanced Restricted Party's skills, knowledge, and market value beyond the level that Restricted Party possessed prior to the Company relationship. The restrictions in this Agreement are designed to protect these legitimate investments and are not intended to prevent Restricted Party from earning a livelihood in fields unrelated to the Company's competitive activities.
Remedies and Injunctive Relief
Restricted Party acknowledges that any breach of this Agreement would cause the Company irreparable harm for which monetary damages would be an inadequate remedy. Accordingly, the Company shall be entitled to seek temporary, preliminary, and permanent injunctive relief to enforce the provisions of this Agreement, without the necessity of proving actual damages or posting a bond or other security, to the fullest extent permitted by applicable law and court rules.
The Company's right to injunctive relief shall be in addition to, and not in limitation of, all other remedies available at law or in equity, including the recovery of compensatory damages, consequential damages, lost profits, disgorgement of profits derived from competitive activities, and punitive or exemplary damages where permitted by applicable law. The prevailing party in any action to enforce this Agreement shall be entitled to recover its reasonable attorneys' fees, court costs, and litigation expenses from the non-prevailing party.
Judicial Modification
If any provision of this Agreement is found by a court of competent jurisdiction to be unreasonable, overbroad, or otherwise unenforceable as to scope, duration, geographic area, or activity, the Parties expressly authorize and request the court to reform such provision to the minimum extent necessary to render it valid and enforceable, rather than declaring the entire provision or Agreement void. The Parties intend that the restrictions herein be enforced to the maximum extent permitted by applicable law in the governing jurisdiction.
The Parties acknowledge that the enforceability of non-compete agreements varies significantly among jurisdictions. Certain states, including but not limited to California, Minnesota, North Dakota, and Oklahoma, generally prohibit non-compete agreements with employees, while other states impose specific requirements regarding notice, consideration, duration, or scope. This Agreement shall be interpreted and enforced in accordance with the laws of the state specified in the Governing Law provision, and any provision that is unenforceable under such law shall be deemed modified or severed to the extent necessary.
Non-Solicitation
During the Restricted Period, Restricted Party shall not, directly or indirectly, solicit, contact, or communicate with any customer, client, or business partner of the Company with whom Restricted Party had material contact or about whom Restricted Party obtained Confidential Information during the last [twelve (12) / twenty-four (24)] months of Restricted Party's [employment / engagement], for the purpose of providing, offering, or marketing products or services that are competitive with those offered by the Company.
During the Restricted Period, Restricted Party shall not, directly or indirectly, recruit, solicit, hire, engage, or attempt to recruit, solicit, hire, or engage any employee, independent contractor, or consultant of the Company, or encourage or induce any such person to terminate or reduce their relationship with the Company. This restriction does not prohibit Restricted Party from hiring individuals who respond to general job advertisements or postings not specifically targeted at Company personnel.
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 principles. The Parties agree that any action or proceeding arising out of or related to this Agreement shall be brought exclusively in the state or federal courts located in [County], [State], and the Parties hereby irrevocably consent to the personal jurisdiction and venue of such courts and waive any objection based on inconvenient forum.
If the Restricted Party is employed or resides in a state whose laws would render any provision of this Agreement void or unenforceable, the Parties agree that such state's laws shall apply to the extent required by mandatory choice-of-law principles, and the remaining provisions shall continue to be governed by the law of the state specified above. The Parties acknowledge that this Agreement may be subject to state-specific notice requirements, garden leave provisions, or other statutory conditions to enforceability.
General Provisions
This Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior negotiations, representations, and agreements, whether written or oral, relating to non-competition obligations. This Agreement may not be amended except by a written instrument signed by both Parties. No waiver of any breach shall constitute a waiver of any subsequent breach.
This Agreement shall be binding upon and inure to the benefit of the Parties and their respective heirs, executors, administrators, successors, and assigns. The Company may assign this Agreement to any successor entity, including through merger, acquisition, or asset sale, without Restricted Party's consent. Restricted Party may not assign this Agreement. If any provision is held invalid or unenforceable, the remaining provisions shall remain in full force and effect.
Restricted Party acknowledges having read this Agreement in its entirety, having had the opportunity to consult with independent legal counsel, and having entered into this Agreement voluntarily and with full understanding of its terms and consequences. Restricted Party agrees that each restriction in this Agreement is reasonable and necessary to protect the Company's legitimate business interests.
Signature Requirements
E-Signature Valid
Non-compete agreements are valid with electronic signatures under ESIGN/UETA.
Related Employment Templates
A non-compete agreement is often used alongside other employment documents. Depending on your situation, you may also need:
How to Fill Out a Non-Compete Agreement
Identify the Parties and the Relationship Context
Enter the full legal names of the employer (or company) and the employee or contractor subject to the restriction. Indicate the nature of the relationship, new hire, existing employee receiving new consideration, independent contractor, or seller of a business. The context matters because courts apply different enforceability standards depending on the relationship type.
Define the Restricted Activities with Precision
Describe the specific competitive activities that are prohibited. Instead of broad language like "any business that competes," use targeted descriptions such as "providing SaaS-based accounting software to mid-market companies" or "soliciting clients for residential real estate brokerage services." Reference the restricted party's specific role and the information they accessed to justify the scope.
Set the Geographic and Temporal Boundaries
Enter the geographic area (radius, states, territories, or client-based restriction) and the duration of the restriction. Research your state's enforcement standards before setting these parameters, a 1-year, 50-mile restriction is far more likely to be enforced than a 5-year, nationwide prohibition. If the restricted party works remotely or serves clients nationally, consider using a client-based restriction instead of a geographic one.
Specify the <strong>Consideration</strong> Being Provided
Document exactly what the restricted party is receiving in exchange for the non-compete. For new hires, state that employment and access to confidential information constitutes consideration. For existing employees, specify the additional consideration, a raise, bonus, equity grant, or new role. In sale-of-business transactions, the purchase price and any earnout provisions serve as consideration.
Include <strong>Non-Solicitation</strong> and Non-Recruitment Terms
Define which customers, clients, or accounts the restricted party cannot solicit, typically limited to those with whom they had material contact during a specified lookback period (12 to 24 months). Set the non-recruitment restriction to cover key employees or team members the departing individual managed or worked closely with.
Select Governing Law and Obtain Signatures
Choose the governing state law carefully, as non-compete enforceability varies dramatically between states. California, Minnesota, North Dakota, and Oklahoma largely prohibit non-competes, while states like Florida, Texas, and Georgia enforce them under specific statutory frameworks. Have both parties sign and date the agreement, with the restricted party acknowledging they received adequate consideration and had the opportunity to consult an attorney.
Free Template vs Custom Non-Compete Agreement
| Feature | Free Template | Custom (AI or Attorney) |
|---|---|---|
| Basic <strong>non-compete</strong> with activity, geography, and duration (printable) | ||
| <strong>Non-solicitation</strong> and non-recruitment provisions | ||
| State-specific enforceability languageCritical, enforceability varies dramatically by state | - | |
| Garden leave / paid restriction period clause | - | |
| Judicial modification (blue pencil) provision | - | |
| Tolling provision for breach periods | - | |
| Carve-outs for specific clients or industries | - | |
| Attorney-reviewed enforceability assessmentStrongly recommended before enforcement | - |
Key Facts About Non-Compete Agreement Documents
Non-compete restricts employee from competing after termination.
Enforceability depends on reasonable scope and duration.
State law governs non-compete enforceability.
Adequate consideration required for valid non-compete.
FTC rule affects non-compete enforceability nationwide.
Key Legal Terms in a Non-Compete Agreement
When a Free Template Is Not Enough
Free templates cover standard situations, but a professionally drafted non-compete agreement accounts for state-specific requirements, unusual circumstances, and enforceability considerations that generic forms miss. If your situation involves significant assets, complex terms, or potential disputes, request an attorney-drafted non-compete agreement with a custom quote based on your situation.
Non-Compete Agreement Template FAQ
What is a non-compete agreement?
Are non-compete agreements enforceable?
How long can a non-compete last?
Can I be forced to sign a non-compete?
What happens if I violate a <strong>non-compete</strong> agreement?
What is the difference between a <strong>non-compete</strong> and a <strong>non-solicitation</strong> agreement?
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