Non-Compete Clause

What This Clause Does

This clause says you can't work for competitors — or start a competing business — for a set period after you leave. That might sound reasonable, but "competitor" is often defined so broadly that it could cover most jobs in your industry. A 2-year ban in a major city sounds different from a 2-year ban that applies nationwide.

Before you sign, check two things: how long the restriction lasts and how wide the geographic scope is. Courts in many U.S. states (including California and Minnesota) refuse to enforce non-competes at all — but you can't count on that as your safety net if you're in a state that upholds them.

What This Looks Like in a Contract

"For a period of [12/24] months following the termination of employment, Employee shall not directly or indirectly engage in, own, manage, operate, or be employed by any business that competes with Company within the [State/Region/United States]."

Red Flags to Watch For

• No geographic limit — applies anywhere in the country or worldwide
• Restriction period longer than 12 months
• "Competitor" defined to include any company in the same industry, not just direct rivals
• Clause survives termination by the employer for any reason, including layoffs

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