Mistake
Scope is too broad
A nationwide non-compete for a sales rep who only ever worked one region, or a restriction covering all industries rather than the company's specific business, will fail in most courts.
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What a non-compete agreement is for
A non-compete agreement restricts a departing employee, contractor, or business seller from competing against the party they worked for or sold to. Enforceability varies dramatically by state — BizDraft generates non-competes calibrated to your state's standards so they have a real chance of holding up.
Employers seeking to protect client relationships and trade secrets when key employees leave. Business buyers requiring the seller to not re-enter the market. Companies protecting their competitive position after partnerships end.
At employment onboarding for employees with access to trade secrets or key client relationships. As part of a business sale. As a standalone agreement for senior employees or key contractors whose departure could harm the business.
Do not use for California, North Dakota, Minnesota, or Oklahoma employees — non-competes are banned or nearly unenforceable there. Do not use for low-wage workers — many states prohibit non-competes for hourly or below-threshold wage employees.
What BizDraft asks you
Company and the restricted party's name, role, and relationship.
The governing state. Enforceability rules vary enormously — this drives the whole document.
What the person cannot do — work for competitors, solicit clients, start a competing business.
How long the restriction lasts. Ranges from 6 months to 2 years depending on state and role.
Restricted area — specific states, metro areas, or nationwide where the business operates.
What the restricted party receives in exchange. New employment, continued employment, severance, or sale proceeds.
What the AI generates
Plain-English, state-calibrated, with enforceable scope and duration. Broad enough to protect the business. Narrow enough to hold up.
Specific restriction on working for, owning, or consulting for defined competitors within the geographic area for the restriction period.
Restriction on soliciting the company's clients, prospects, and employees for a defined period — often survives in states where geographic non-competes do not.
Explicit acknowledgment by the restricted party of the consideration received — required in many states for a non-compete signed after employment begins.
Statement of the legitimate business interest being protected — trade secrets, client relationships, specialized training — required for enforceability in most states.
If a court finds the scope too broad, it may reduce it rather than void the entire agreement — the blue-pencil clause invites courts to modify rather than strike.
Acknowledgment that breach would cause irreparable harm, entitling the company to seek injunctive relief without posting bond — critical for enforcement.
Common mistakes
The most common reasons non-compete agreements fail to hold up when enforced.
Mistake
A nationwide non-compete for a sales rep who only ever worked one region, or a restriction covering all industries rather than the company's specific business, will fail in most courts.
Mistake
Courts require a protectable interest — trade secrets, confidential client lists, or specialized training investments. A non-compete that protects nothing legitimate is unenforceable.
Mistake
In many states, a non-compete signed after the employee has already started working requires new consideration — a raise, a promotion, a bonus. Just continued employment is not enough.
Mistake
Applying Texas law to a California employee does not make California's ban disappear. Courts apply the law of the state where the employee works, regardless of what the contract says.
Example
"Cybersecurity firm. Signing a non-compete with a senior sales engineer who has deep client relationships and trade-secret access. 18-month restriction, southeastern US, direct competitors only. Non-solicitation of clients and employees. Texas law. Consideration: $10,000 signing bonus."
An 8-section non-compete, Texas-governed. 18-month restriction on working for named competitor categories in southeastern US states. Trade secret and client relationship protectable interests stated. $10,000 consideration acknowledged. 18-month non-solicitation of clients and employees. Blue-pencil savings clause. Injunctive relief provision.
Word (.docx) for editing in any tool. PDF for sending out as-is. Both formats, no watermark, no account needed.
When to ask a lawyer
BizDraft is a drafting tool. It is not a substitute for a lawyer who knows your specific situation. Reach for one when:
If a former employee has violated or is about to violate a non-compete, stop drafting and call an employment attorney immediately. Injunctive relief has strict timing requirements.
When employees work across multiple states, enforceability becomes a patchwork. A uniform non-compete may be unenforceable for some employees. Get state-specific advice.
Seller non-competes in M&A transactions have different legal standards than employment non-competes — they are generally enforceable with broader scope. Attorney drafting is appropriate.
FAQ
Depends on the state. California, North Dakota, Minnesota, and Oklahoma ban employee non-competes nearly entirely. In states where they are permitted, enforceability requires: reasonable scope and duration, a legitimate business interest to protect, and adequate consideration. Courts routinely narrow or void overly broad non-competes.
For employees, 6–24 months is the range courts accept in most states. Restrictions longer than 2 years are frequently reduced or voided. Business-sale non-competes can run 3–5 years with broader geographic scope. BizDraft will suggest a duration calibrated to your state and the employee's role.
A non-compete restricts working for or starting a competing business. A non-solicitation restricts approaching the company's clients or employees. Non-solicitation agreements are generally more enforceable than geographic non-competes and are permitted in many states that ban non-competes.
You can make it a condition of employment. The clearest approach is to include it in the employment offer and have it signed before the first day — then the offer itself is the consideration. Requiring signature after employment starts requires additional consideration in many states.
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