Non-Compete Clause

The clause that decides what you are allowed to do after the relationship ends.

No account, no card — the whole reading, in about half a minute.

What A Non-Compete Clause Does

A non-compete clause restricts one party from competing with the other after the contract ends — for a period, in a place, over a defined range of activity. It belongs to a family of restrictive covenants that also includes non-solicitation of customers and non-poaching of staff, and the three are often bundled into one paragraph and read as one thing when they are not.

Three tests decide whether it binds you, and they are judged together rather than one at a time: activity (is the restriction tied to work you actually did?), geography (does the area match where the business really operates?) and duration (how long after you leave?). A narrow restriction on all three is far more likely to be enforced than a wide one on any.

Jurisdiction matters more here than in any other clause on this site. Some places refuse to enforce non-competes for most employees, some require the employer to pay during the restricted period, and some enforce reasonable restrictions much as written. The same paragraph can be binding in one country and void in another.

In plain language

“After this ends, I cannot do this kind of work, in this area, for this long — assuming the courts here will enforce it.”

The Clause, As It Usually Arrives

Nothing below is unusual drafting. That is what makes it worth reading twice.

The wording

For a period of three (3) years following termination, the Employee shall not, directly or indirectly, engage in, be employed by, or have any interest in any business which competes with the Company anywhere in the world.

What it means once it is in force

Three years, worldwide, and "any business which competes" rather than the work the employee actually did. In many jurisdictions this is unenforceable — but unenforceable is not the same as harmless: most people comply with what they signed rather than pay a lawyer to find out, so the clause works even where it would fail.

General information about a common drafting pattern, not legal advice about your document.

What Can Go Wrong

A restriction wide enough to prevent you working in your own field at all, which is a period of unpaid unemployment you agreed to in advance.
Restrictions on "indirect" involvement, which can catch advisory work, small shareholdings and family businesses.
A clause that reaches clients you brought with you, or people you knew before the relationship started.
Liquidated damages set at a number unrelated to any loss, so leaving carries a fixed penalty regardless of harm.
Severability drafted so that an over-wide clause is read down to something enforceable, rather than falling away entirely — which removes the incentive to draft it reasonably.

Wordings Worth Stopping At

Search your own document for these before you read anything else in the clause.

"anywhere in the world" / nationwide, in a local business

Geography should match where the business actually competes. A worldwide restriction from a regional employer is a sign the clause was copied, not considered.

more than twelve to twenty-four months

Outside senior roles and the sale of a business, longer periods are commonly treated as excessive — and are the first thing a court reduces.

"any business which competes"

Not tied to your role. It restricts the whole industry rather than the work you did in it.

no consideration for the restriction

Some jurisdictions require something of value — a payment, a promotion, compensation during the restricted period. Where it is required and absent, the clause can fail entirely.

no carve-out for existing clients or passive investments

Relationships you brought with you, and a few shares in a listed company, are the usual exceptions. Their absence is worth asking about.

Who It Protects

The employer or buyer It protects client relationships, confidential information and the value paid for a business — which is why non-competes on the sale of a company are enforced far more readily than the ones in employment contracts.

The person restricted, when it is paid Where compensation runs during the restricted period, the clause becomes a paid transition rather than a period of enforced idleness.

Nobody, when it is copied from a template An over-wide restriction is unenforceable where it matters and chilling where it does not — it deters honest people and does not stop determined ones.

What Is Normally Negotiable

Reduce the duration to twelve months. It is the most widely accepted period and the ask least likely to be refused outright.

Tie the restricted activity to the work you actually performed. It gives the employer the protection they are entitled to — your knowledge of their business — without taking your profession away.

Limit geography to where you personally worked or held client relationships. It matches the restriction to the risk, which is the standard a court applies anyway.

Swap the non-compete for a non-solicitation. It protects the clients and colleagues the employer actually cares about while leaving you able to work. This trade is accepted more often than people expect.

Ask for payment during the restricted period. If the restriction is worth having, it is worth paying for — and the request itself reveals how much they believe in it.

How LegalValidate Reads a Non-Compete Clause

The review reads the whole document and reports six scores out of ten, each with the reasoning behind it. Here is where this clause shows up in that.

The analysis reads the restriction and reports it under Legal Enforceability and Balance of Terms, with a sentence naming the scope, the geography and the duration it found.
Non-competes are frequently folded into an NDA or a consulting agreement rather than standing alone — the review reads the whole document, so it reports the restriction wherever it is written.
What it will not do is tell you whether the clause binds you where you live. Enforceability is jurisdiction-specific and changes with legislation and case law; the review flags the clause and its width so you can take a specific question to a local lawyer instead of a general one.

Check the non-compete clause in your own contract

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Analysis Results

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Documents Where This Clause Matters Most

Each of these pages says what the review checks in that kind of agreement.

Non-Compete Agreement Review it free → Employment Contract Review it free → Consulting Agreement Review it free → NDA Review it free →

Non-Compete Clause — Questions

Are non-compete clauses enforceable? +

It depends heavily on where you are and what you do. Some jurisdictions refuse to enforce them for most employees, some require payment during the restricted period, and some enforce reasonable restrictions as written. What travels everywhere is that scope, geography and duration are weighed together, and a narrow restriction is far more likely to hold than a wide one.

What is the difference between a non-compete and a non-solicitation? +

A non-compete stops you doing the work; a non-solicitation stops you approaching specific clients or colleagues. Non-solicitation is narrower, easier to enforce, and usually enough to protect what an employer genuinely needs to protect — which is what makes it a realistic thing to offer in place of a non-compete.

Does a non-compete have to be paid for? +

In some jurisdictions, yes — continued employment alone is not treated as sufficient consideration, and a few require compensation for the whole restricted period. Where payment is required and absent, the restriction may be unenforceable regardless of how reasonably it is drafted.

How do I check the restriction in my own agreement? +

Upload it — the free review reports the scope, geography and duration it finds, along with the other five scores. No account, and nothing about the document is kept afterwards.