Non-compete agreement template
A non-compete agreement stops someone from working for a competitor, or starting one, for a period after they leave. It's also the employment document most likely to be unenforceable, because states increasingly limit or ban it. This template keeps the restriction narrow: a defined business, area and time, with notice and review built in. Read the state rules below before you use it, then send it from SignMaster.
Updated November 5, 2026 · 4 min read
The contract
Gray blanks are yours to fill in before you send. Each signer fills in the blanks in their color.
- You, before sending
- Employee
- Company
Non-Compete Agreement
This Non-Compete Agreement (the "Agreement") is made on Agreement date between Company name (the "Company") and Employee name (the "Employee"), who works or will work for the Company as Job title.
1. Why this Agreement exists
In this role the Employee will have access to the Company's confidential information, such as pricing, plans, methods and customer relationships, that would give a competitor an unfair advantage. The restriction below is meant to protect that information and those relationships, and no more.
2. What the Employee receives
In exchange for this Agreement, the Employee receives: What the employee receives. The Employee agrees this is fair value for the promises below.
3. The restriction
For Restricted months months after the Employee's work for the Company ends for any reason (the "Restricted Period"), the Employee will not, within Restricted area (the "Restricted Area"), own, manage, work for or provide services to a business that does the following, in a role similar to the one the Employee held at the Company: Restricted business (a "Competing Business").
4. What is not restricted
- Owning up to 2% of the shares of a publicly traded company.
- Working for a Competing Business in a role unrelated to the Employee's role at the Company, where the Employee doesn't use or share the Company's confidential information.
- Any work the Company approves in writing in advance, which it will not refuse unreasonably.
- Other exceptions: Other exceptions.
5. Notice and review
The Company first gave this Agreement to the Employee on Date first provided. The Employee has had the chance to review it and is advised to consult a lawyer of their choice before signing. Signing this Agreement is not a condition of continued work unless the Company has said so in writing.
6. Telling a new employer
During the Restricted Period, the Employee will tell any new employer in a Competing Business about this Agreement before starting work, and will tell the Company the name of any new employer that might be a Competing Business. The Company may share a copy of this Agreement with that employer.
7. Confidential information
Nothing in this Agreement reduces the Employee's separate duty to keep the Company's confidential information secret, and nothing in it stops the Employee from reporting possible violations of law to a government agency or from discussing wages and working conditions as the law protects.
8. Remedies
If the Employee breaks section 3, the Company may ask a court to order the breach to stop, in addition to any other remedy the law allows. The Company will not seek to enforce this Agreement in any state where the law makes it unenforceable against the Employee.
9. Reasonable limits and severability
The parties intend the restriction to be no broader than reasonably needed. If a court finds any part of it too broad, the court may narrow it to the extent the law allows and enforce it as narrowed. If any part can't be enforced, the rest of this Agreement stays in effect.
10. Governing law and the whole agreement
This Agreement is governed by the laws of the state where the Employee primarily lives and works, which the parties understand to be Work state. It is the whole agreement about non-competition, does not create employment for any set period, and can be changed only in writing signed by both parties. Electronic signatures count as originals.
Employee details
Home address: Employee address
I have read this Agreement, I had time to review it and the chance to consult a lawyer, and I understand the restriction in section 3.
Employee
For the Company
Opens it in SignMaster as a template you can edit and send.
A starting point, not legal advice. Have a lawyer review it for your state and situation. Non-competes are void or limited in many states, including California, Minnesota, North Dakota and Oklahoma, and for lower-paid workers in several others. Have a lawyer in the employee's state review this before you use it.
On this page
Check your state first
Non-compete law is set state by state, and it's moving fast. California voids most employee non-competes and makes it unlawful to enter into or try to enforce one. Minnesota banned new employee non-competes from July 2023, and North Dakota and Oklahoma also refuse to enforce most of them. Several other states, including Colorado, Illinois, Oregon, Virginia and Washington, ban them for workers earning below a pay threshold, and some require advance notice before signing. Where they're allowed, courts still strike or trim restrictions that go further than needed.
At the federal level, the FTC's 2024 rule that would have banned most non-competes was set aside by a federal court before it took effect, and the FTC later dropped its appeal. The agency can still act against individual non-competes it considers unfair.
What makes a non-compete enforceable
- A legitimate interest: protecting trade secrets, confidential information or customer relationships, not just avoiding competition.
- A reasonable time: months rather than years, matched to how long your information stays valuable.
- A reasonable area: where the person actually worked or had customers, not the whole country by default.
- A narrow activity: the kind of work they did for you, not any job in the industry.
- Something in return: a job offer for a new hire; many states expect a raise, bonus or promotion for an existing employee.
- Fair notice: time to read it and talk to a lawyer before signing, which some states require.
What the template covers
- The restricted business: a description of the competing work, tied to the person's role.
- Period and area: the number of months after leaving, and the region.
- What the employee receives in exchange, written into the agreement.
- Exceptions: owning a small stake in a public company, and work unrelated to the role.
- Notice and review: when the employee got the agreement, and that they may consult a lawyer.
- Reasonable limits: a court may narrow a restriction instead of striking it, and the law of the state where the employee works applies.
Mistakes that sink non-competes
- Using one agreement in every state. A clause that's routine in Florida can be unlawful in California.
- Asking a receptionist to sign the same non-compete as a sales director. Restrict only roles with real access to secrets or clients.
- Springing it on someone on their first day. Send it with the offer, with time to review.
- Choosing another state's law to dodge local rules. Several states block that for people who live and work there.
- Relying on a non-compete when a non-solicitation agreement or a confidentiality agreement would protect the same interest with less risk.
How to send it with SignMaster
- 1
Open the template
Press Use this template. The period, area and what the employee receives are blanks, so you can save a filled-in copy for each state you hire in. The employee signs first and the company second.
- 2
Fill in the restriction
Complete the gray blanks: the restricted business, the months, the area, what the employee receives and the date you first gave them the agreement.
- 3
Send it early, with a deadline
Add the employee or candidate and set a sign-by date that leaves the review time your state expects. SignMaster shows when they opened it, and the certificate of completion records when they viewed it and when they signed.
- 4
Keep the record
Countersign for the company. Both of you get the signed PDF. Its SHA-256 fingerprint means any later edit to the PDF can be detected, which matters if the agreement is ever tested in court.
Sending it with offer letters
If a role needs a non-compete, add it to the same envelope as the offer letter, so the candidate sees the restriction before accepting the job. Hiring several people for the same role in the same state? Bulk send can send one envelope per hire from a spreadsheet, but only after you've confirmed the restriction is lawful for every person on the list.
Questions? Answers.
Are non-compete agreements enforceable?
It depends on the state. Some ban most employee non-competes, others limit them by pay level, and the rest enforce them only when they're reasonable in time, area and scope and protect a legitimate business interest.
Did the FTC ban non-competes?
The FTC issued a rule in 2024, but a federal court set it aside before it took effect, and the FTC later dropped its appeal. State law still decides most cases.
How long can a non-compete last?
There's no single answer. Courts tend to accept six months to a year more readily than longer periods, and some states set their own limits. Keep it as short as protects your interest.
Can an employee sign a non-compete electronically?
Yes, in general. E-signatures are valid for employment agreements. Some states require advance notice or specific wording, which an electronic signature doesn't change.
Sources
- California Business and Professions Code § 16600 · leginfo.legislature.ca.gov
- Minnesota Statutes § 181.988: covenants not to compete void · revisor.mn.gov
- FTC: Noncompete Rule · ftc.gov