A non-compete agreement is a promise by an employee not to work for a competitor, or start a competing business, for a set time after leaving, within a set area. Employers use them to protect client relationships and inside knowledge. Whether one is enforceable depends almost entirely on state law, and in some states the answer is no. This free non-compete agreement template is deliberately narrow, and the rest of this page explains why.
Is a non-compete even allowed where you are?
Start here, because in some states the right non-compete agreement is none at all.
The federal rule is not in effect. The FTC finalized a rule in 2024 that would have banned most non-competes. On August 20, 2024, a federal district court stopped the FTC from enforcing it. The FTC appealed, and then on September 5, 2025 it voted to dismiss its appeals and accede to the rule’s vacatur. The FTC’s rule page now says plainly that the rule “is not in effect and it is not enforceable.” So there’s no nationwide ban, and there’s no nationwide permission either. Your state’s law controls.
California. Business and Professions Code section 16600 says every contract that restrains anyone from a lawful profession, trade or business is void to that extent. The statute adds that it should be read broadly to void any non-compete in an employment context, “no matter how narrowly tailored,” unless it fits an exception in that chapter. Don’t use this template for a California employee.
Minnesota. Minnesota Statutes section 181.988 makes covenants not to compete void and unenforceable. The exceptions are agreements made during the sale of a business and in anticipation of a business dissolving. The law’s definition of “employee” includes independent contractors, and an employer can’t require someone who primarily lives and works in Minnesota to litigate elsewhere or give up Minnesota law’s protection. Don’t use this template there either.
Everywhere else. Other states allow non-competes to different degrees, and some attach their own conditions. States also differ on what a court does with a clause that goes too far, so don’t count on a judge trimming an overbroad one down to size. Check your state’s current statute, or ask a local employment lawyer, before you rely on one.
Do you actually need a non-compete?
Often you don’t. Be honest about what you’re trying to protect. Say you run a small IT managed-services firm and you’re hiring a technician who’ll get to know your 30 clients. The real worry is that they’ll leave and take clients with them, or take your pricing sheets. A confidentiality agreement covers the pricing sheets. A narrow customer non-solicitation clause covers the clients. Neither stops the technician from earning a living, and both hold up in more places.
So consider these first:
- Confidentiality. Our NDA template protects confidential information and trade secrets. Minnesota’s statute, for one, expressly excludes nondisclosure agreements from its definition of a non-compete.
- Non-solicitation. A promise not to solicit your customers (or poach your staff) for a limited time. Minnesota’s law excludes customer non-solicitation agreements from its non-compete definition too, though other states have their own rules for them.
Our template includes both as separate sections, so you can delete the non-compete section and keep the rest if that’s all you need. If the person is a contractor rather than an employee, put restrictions in the independent contractor agreement instead, and remember that Minnesota’s ban covers contractors as well. For a business sale, the non-compete usually belongs in the purchase documents, not an employee form.
What does this non-compete agreement template include?
The sample non-compete agreement is built around reasonableness. Here’s each part.
Why it exists. A short statement of the business interest being protected (specific client relationships, confidential information). Vague purposes weaken a non-compete.
Consideration. What the employee gets for signing: the job itself for a new hire, or something extra for a current employee, like a bonus or a raise. For someone already on your payroll, the template offers a separate payment option, because a new promise from them deserves something new in return.
Restricted period, area and activity. Blanks for a short period (the template suggests months, not years), a defined area tied to where the employee actually worked, and a narrow description of the competing work, meaning the same kind of role for a direct competitor, not “any business in the industry.”
What’s not restricted. Working in a different role, for a non-competing business, owning a small amount of public-company stock, and anything state law protects.
Optional non-solicitation of customers and employees. Limited to customers the employee actually dealt with.
Confidentiality and the whistleblower notice. The federal Defend Trade Secrets Act (18 U.S.C. 1833(b)) gives immunity for confidential reports of suspected legal violations to government officials or attorneys, and an employer that doesn’t give notice of that immunity in an agreement covering trade secrets can’t get exemplary damages or attorney fees under that Act against that employee. The template includes the notice.
Severability and reformation. If a court finds a restriction too broad, the template asks it to narrow the restriction where the law allows, and keeps the rest of the agreement alive. Whether a court will do that depends on the state.
How do you fill it in and get it signed?
- Confirm your state allows it for this employee. If not, delete section 4 and use the confidentiality and non-solicitation sections alone.
- Fill in the narrowest restriction that protects the real interest. Ask yourself whether you’d think it fair if you were signing it.
- Give it to the employee before they accept the job, or with real extra consideration if they’re already working for you. Give them time to read it, and to have a lawyer read it.
- Both sign, and both keep a copy.
E-signing is fine for the contract itself; the federal ESIGN Act generally treats electronic signatures like handwritten ones (see are electronic signatures legally binding). What e-signing can’t do is make an unenforceable restriction enforceable. Download it, adapt it, and send it with any e-signature tool you like. (We’re building SignWren for this; join the waitlist if you’d like early access.)
This template and guide are general information, not legal advice. Non-compete law changes often and differs a great deal by state, so talk to an employment lawyer licensed where the employee works before you use one.
Template from signwren.com. General information, not legal advice. Check your state's rules and adapt it before you use it.
Important: Non-compete agreements are not enforceable everywhere. California (Business and Professions Code section 16600) and Minnesota (Statutes section 181.988) void most of them in employment, and other states limit them. The FTC's 2024 non-compete rule is not in effect. If your state doesn't allow a non-compete for this employee, delete section 4 and use the confidentiality and non-solicitation sections only.
NON-COMPETE AGREEMENT
This Non-Compete Agreement ("Agreement") is made on [date] between:
Employer: [Company's full legal name], of [address] ("Employer"), and
Employee: [Employee's full legal name], of [address] ("Employee").
1. Why this Agreement exists
Employee will have access to Employer's [describe, e.g. "client relationships in the Tampa area, pricing and service contracts"] (the "Protected Interests"). This Agreement is meant to protect those Protected Interests, and only to the extent reasonably needed to protect them.
2. What Employee receives for signing
In exchange for Employee's promises in this Agreement, Employee receives (tick one or more):
☐ Employment in the position of [job title], starting [start date]. Employee received this Agreement on [date], before accepting the job offer.
☐ A one-time payment of [$ amount], paid within [number] days after signing.
☐ Other: [e.g. a raise to $ amount, a promotion to title, access to a bonus plan].
3. Confidential information
During and after employment, Employee will keep Employer's confidential information secret and use it only for Employer's work. "Confidential information" means non-public business information, such as client lists and contact details, pricing, contracts, financial information, plans, and trade secrets. It does not include information that is or becomes public through no fault of Employee, that Employee knew before working for Employer, or that Employee's general skill and experience include.
When employment ends, Employee will return or delete Employer's confidential information and property, and confirm in writing that this has been done.
Whistleblower immunity notice. Nothing in this Agreement prevents Employee from reporting a possible violation of law to a government agency or from making disclosures protected by law. Under 18 U.S.C. 1833(b), an individual will not be held criminally or civilly liable under any federal or state trade secret law for disclosing a trade secret that is made (a) in confidence to a federal, state or local government official, directly or indirectly, or to an attorney, solely for the purpose of reporting or investigating a suspected violation of law, or (b) in a complaint or other document filed in a lawsuit or other proceeding, if that filing is made under seal. An individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to their attorney and use it in the court proceeding, if they file any document containing the trade secret under seal and do not disclose it except under court order.
4. Non-compete (delete this section if your state does not allow it)
For [number] months after Employee's employment ends, for any reason, Employee will not, within [area, e.g. "Seminole and Orange Counties, Florida" or "a 25-mile radius of the office at address"], work in a role substantially similar to Employee's role at Employer for a Competing Business, or own or run a Competing Business.
A "Competing Business" means a business that provides [describe the specific services or products Employer actually offers, e.g. "managed IT support services to small businesses"] in that area.
☐ Garden-leave pay (optional). During the restricted period, Employer will pay Employee [$ amount or percentage of base salary] per [month], paid on Employer's normal payroll schedule. If Employer stops these payments, section 4 ends.
5. What is not restricted
This Agreement does not stop Employee from:
- working for a Competing Business in a role that is not substantially similar to Employee's role at Employer, or outside the area in section 4;
- working for any business that is not a Competing Business;
- owning up to [2]% of the publicly traded shares of any company as a passive investment; or
- doing anything the law protects, including discussing wages and working conditions or reporting possible violations of law.
6. Non-solicitation (optional)
For [number] months after employment ends, Employee will not:
☐ Customers. Solicit, for the purpose of providing services that compete with Employer, any customer of Employer that Employee personally dealt with, or learned confidential information about, in the last [12] months of employment.
☐ Employees. Solicit any employee of Employer whom Employee worked with to leave Employer. General job ads not aimed at Employer's staff are not solicitation.
7. Telling a new employer
During any restricted period, if Employee accepts a new job, Employee will give the new employer a copy of sections 3 to 6 of this Agreement (not the payment terms). Employer may also let a new employer know that this Agreement exists.
8. If a restriction is too broad
The parties intend each restriction to be reasonable. If a court decides any restriction is too broad in time, area or scope, the parties ask the court to narrow it to the broadest restriction the law allows and enforce it as narrowed. If the law does not allow that, the restriction is removed and the rest of this Agreement stays in effect. Each numbered section is separate.
9. Remedies
If either party breaks this Agreement, the other may seek any remedy the law allows, including an order to stop the breach. Each party pays its own attorney fees unless a law or a court orders otherwise.
10. Employment status
This Agreement does not change Employee's employment status or promise employment for any period. [If employment is at will, it remains at will.]
11. General terms
Entire agreement. This Agreement is the entire agreement about the restrictions it covers. It does not replace Employee's offer letter or other employment terms except where they conflict on these restrictions.
Amendments. Any change must be in writing and signed by both parties.
Governing law and venue. This Agreement is governed by the laws of the State of [State where Employee primarily lives and works]. Any lawsuit about it will be brought in [county and state]. Nothing in this section takes away a protection that the law of the state where Employee primarily lives and works gives Employee.
Time to review. Employee confirms that Employee had at least [number] days to review this Agreement and the chance to talk to a lawyer before signing.
Counterparts and electronic signatures. The parties agree this agreement may be signed electronically and in counterparts, and an electronic signature has the same effect as a handwritten one.
Signatures
Employer
Signature: ______________________________
Name: [full name]
Date: [date]
Employee
Signature: ______________________________
Name: [full name]
Date: [date]