Scrutr AI — Contract Review

Is my non-compete actually enforceable?

Non-compete enforceability is almost entirely determined by your state. In some states, non-competes aren't enforced at all. In others, courts enforce any reasonable restriction. Here's what determines whether yours is binding.

Review my non-compete → See a sample review

The single most important factor in non-compete enforceability is geography — specifically, which state's law governs the agreement. This varies dramatically: California essentially bans non-competes for employees. Most other states enforce them if they're 'reasonable.' Understanding where your state falls is the first step.

States that effectively ban non-competes

California is the most well-known — California Business and Professions Code Section 16600 voids non-competes for employees almost categorically, with very narrow exceptions. Minnesota banned non-competes for employees effective January 1, 2023. North Dakota has long prohibited non-competes except in very specific circumstances (sale of a business, dissolution of a partnership). Oklahoma prohibits non-competes entirely. If you live in these states, a non-compete in your employment agreement is likely unenforceable — though governing law clauses that point to another state can complicate this.

What makes a non-compete 'reasonable' in states that enforce them

States that enforce non-competes apply a reasonableness test. Courts typically evaluate: duration (6–12 months is generally considered reasonable; 2+ years invites scrutiny), geographic scope (restricted to where you actually worked or competed), industry scope (limited to your actual role, not the entire industry), and whether the employer provides adequate consideration (something of value for your agreement). A non-compete that fails any of these tests may be unenforceable or limited in scope by a court.

What a governing law clause means for your non-compete

Most employment agreements include a governing law clause stating which state's law applies — often the state where the company is headquartered, not where you live. If you live in California but your contract says 'governed by Delaware law,' courts will have to decide which law applies. California courts often apply California law to protect California employees regardless of governing law clauses. But this is litigation-dependent — the governing law clause is something to pay attention to.

The FTC rule on non-competes

In 2024, the FTC issued a rule broadly prohibiting non-competes for most workers. This rule faced significant legal challenges and its status has been contested in federal courts. As of 2026, the enforceability of the FTC rule remains unsettled. The practical implication is that you should not assume federal protection and instead understand your state's rules. Scrutr identifies the specific terms of your non-compete — duration, scope, geography — so you can assess enforceability with your state's rules in mind.

What to do if you have an overbroad non-compete

If your non-compete appears overbroad, you have several options depending on timing. Before signing: negotiate a narrower scope — shorter duration, limited geography, specific role rather than entire industry. After signing but before leaving: document that any work at a new employer would be outside the restricted scope. After leaving: consult an employment attorney if a former employer threatens enforcement — many overbroad non-competes are not pursued in court because the cost-benefit doesn't favor the employer.

Common questions

Is a non-compete enforceable if I was laid off?

In most states, yes — termination doesn't automatically void a non-compete. However, some courts reduce enforcement of non-competes when the employer terminates the employee without cause, reasoning that enforcing the restriction in that situation is inequitable. A few states have explicit rules limiting enforcement in layoff situations. This varies significantly by state.

Can a non-compete prevent me from working in my entire industry?

Probably not — courts generally require non-competes to be limited to the specific type of work you actually did, not an entire industry. A software engineer's non-compete can't prevent them from doing any software work. Courts will often narrow overbroad restrictions rather than void them entirely.

What happens if I violate a non-compete?

The former employer can seek a temporary restraining order to stop you from working at the new company, and potentially damages. In practice, most non-compete violations are not pursued in court — litigation is expensive and the outcome uncertain. The most significant real-world effect of a non-compete is often the chilling effect: new employers may not hire you if they know you have one.

Does a non-compete apply if I work remotely?

The geographic scope of non-competes becomes complicated with remote work. If you work remotely from California for a company headquartered in Texas, both states' laws may be relevant. This is an evolving area — courts in different jurisdictions are applying different approaches. A non-compete that specifies a geographic radius may have limited practical effect on a fully remote worker.

Can I negotiate a non-compete?

Yes. Before signing, you can ask for a shorter duration (6 months instead of 2 years), narrower scope (limited to your specific role rather than entire industry), or carve-outs for specific companies or clients you already have relationships with. Scrutr generates a negotiation email with specific asks based on what it finds in your non-compete language.

Related guides

Offer letter review → Offer letter red flags → How to negotiate a contract →

Read before you sign.

Upload or paste any contract. Get a full analysis in under 60 seconds — free to try.

Review my non-compete — it's free →