Your employer wants to stop you from working for competitors—but are they legally able to? Non-compete agreements restrict where you can work after leaving a job, but they’re not always enforceable. Depending on your state and circumstances, you may be able to challenge the agreement, work for competitors anyway, or even sue your employer.
Quick Answer
Yes, you may be able to take legal action regarding a non-compete agreement. Employees can file declaratory judgment actions asking courts to rule the non-compete unenforceable. In some states like California, employees can sue employers who try to enforce illegal non-competes. Conversely, employers can sue employees who violate valid agreements. Whether a non-compete is enforceable depends heavily on your state’s laws and whether the restrictions are reasonable.
What Is a Non-Compete Agreement?
A non-compete (also called a covenant not to compete or restrictive covenant) is a contract provision that limits your ability to:
- Work for competitors after leaving
- Start a competing business
- Solicit former clients or coworkers
These agreements typically specify:
- Duration: How long the restriction lasts (e.g., 1-2 years)
- Geographic scope: Where you can’t compete (e.g., within 50 miles)
- Industry/activity scope: What work is prohibited
Are Non-Competes Enforceable?
Enforceability varies dramatically by state:
States That Ban or Severely Limit Non-Competes
| State | Status |
|---|---|
| California | Generally void and unenforceable (except narrow exceptions) |
| North Dakota | Generally unenforceable |
| Oklahoma | Generally unenforceable |
| Minnesota | Banned (as of July 2023) |
| Washington D.C. | Banned for most workers |
States With Strong Limitations
Many states prohibit non-competes for:
- Low-wage workers
- Healthcare workers
- Broadcast employees
- Specific professions
States That Generally Enforce Reasonable Non-Competes
Florida, Texas, and most other states will enforce non-competes if they meet reasonableness standards.
When Courts Refuse to Enforce Non-Competes
Even in enforcement-friendly states, courts may void non-competes that are:
Overly Broad
- Too long: 5 years may be excessive; 1-2 years often reasonable
- Too wide geographically: Nationwide restrictions for a local business
- Too restrictive: Prevents you from working in your entire field
Lacking “Consideration”
- No new benefit provided when you signed (in some states)
- Signed after employment started without additional compensation
Against Public Policy
- Restricts essential workers (doctors, nurses)
- Leaves you unable to earn a living
- Harms competition more than it protects legitimate interests
Not Protecting Legitimate Business Interests
- Employer has no trade secrets to protect
- You don’t have client relationships worth protecting
- General skills rather than proprietary knowledge
Legal Actions You Can Take as an Employee
Declaratory Judgment Action
File a lawsuit asking the court to declare the non-compete unenforceable before you start working for a competitor:
- Puts you in control of timing and venue
- Gets clarity before making career moves
- May pressure employer to negotiate or release you
Challenge Enforcement When Sued
If your former employer sues you for violating the non-compete:
- Argue the agreement is unenforceable
- Show the restrictions are unreasonable
- Demonstrate employer’s misconduct (breach of contract, wrongful termination)
Sue for Wrongful Enforcement (Some States)
In California and a few other states:
- Sue employers who attempt to enforce void non-competes
- Recover damages for being forced to turn down jobs
- May recover attorney fees
What Employers Can Do
If you violate a non-compete your employer believes is valid, they may:
Seek an Injunction
- Court order stopping you from working for the competitor
- Often sought on emergency basis
- Can be devastating to your new job
Sue for Damages
- Lost profits from competition
- Value of trade secrets disclosed
- Recruiting and training replacement costs
Sue Your New Employer
- Tortious interference with contract
- Can make new employer reluctant to hire you
Defenses Against Non-Compete Enforcement
Common defenses when your employer tries to enforce:
| Defense | Argument |
|---|---|
| Unreasonable restrictions | Time, geography, or scope is excessive |
| Lack of consideration | You received nothing for signing |
| Employer breached first | They violated the employment contract |
| Changed circumstances | You were laid off; restrictions shouldn’t apply |
| No legitimate interest | Employer has nothing worth protecting |
| Public policy violation | Enforcement would harm the public |
| Fraud or duress | You were misled or coerced into signing |
Recent Changes in Non-Compete Law
FTC Proposed Ban
The Federal Trade Commission proposed banning most non-competes nationwide in 2024. However, court challenges blocked implementation, and the rule’s future remains uncertain.
State-by-State Expansion
More states are limiting non-competes:
- Banning them for low-wage workers
- Requiring advance notice before requiring signatures
- Mandating garden leave pay during restriction periods
- Requiring agreements be in writing
Negotiating Your Way Out
Before taking legal action, consider negotiating:
- Ask for a release: Especially if you’re leaving on good terms
- Negotiate narrower terms: Shorter time, smaller geography
- Offer consideration: Extended transition, consulting arrangement
- Get it in writing: Any modifications or releases must be documented
Frequently Asked Questions
Can I just ignore my non-compete?
Risky. Even if the agreement is potentially unenforceable, your former employer can still sue you. Defending a lawsuit is expensive and stressful. Your new employer might fire you rather than deal with litigation. Consider getting legal advice before deciding.
Does my non-compete apply if I was laid off or fired?
In many states, yes—termination doesn’t automatically void the agreement. However, some courts are more willing to limit enforcement when the employee was terminated without cause. Some states now require employers to continue paying you during the restriction period if they want to enforce it.
My new job is in a different state. Which law applies?
This is complex. The non-compete may specify which state’s law governs. Courts sometimes ignore these provisions and apply local law. Working in a state like California may give you additional protections. An attorney can analyze your specific situation.
Can my new employer indemnify me?
Some employers offer to cover legal costs if your old employer sues. This can provide protection, but your new employer might change their mind if litigation gets expensive. Get any indemnification promises in writing.
What about non-solicitation or confidentiality clauses?
These are different from non-competes and often enforceable even when non-competes aren’t. You may be free to work for competitors but prohibited from soliciting former clients or revealing trade secrets.
When to Contact a Lawyer
Consult an employment attorney if:
- You signed a non-compete and want to understand your options
- You’re considering a job offer that might violate your agreement
- Your former employer is threatening legal action
- You want to challenge your non-compete proactively
- You’ve been asked to sign a non-compete and want advice
- Your new employer is asking about your non-compete
Many employment attorneys offer consultations to review non-compete agreements. Given the stakes—your career and potential liability—professional guidance is often worthwhile.
