# Non Compete Agreement > Creates non-compete agreements with reasonable scope, duration, geographic limits, and enforceability notes. Use when protecting business interests from competition. - Skill: `reaperinvest/non-compete-agreement` (Agent Skill) - Install (CLI): `npx skillmds@latest add reaperinvest/non-compete-agreement` - Raw SKILL.md: https://api.skillmd.com/api/skills/reaperinvest/non-compete-agreement/raw - Safety review: pending - Works with: Claude Code, Claude.ai, OpenAI Codex - Category: Coding & Dev Tools - Author: reaperinvest (https://skillmd.com/u/reaperinvest) - Updated: 2026-09-22 - Page: https://skillmd.com/skills/reaperinvest/non-compete-agreement --- # Non-Compete Agreement ## When to Use This Skill Use this skill when you need to: - Draft a non-compete agreement for employees, contractors, or partners - Define reasonable scope, duration, and geographic restrictions - Understand enforceability considerations by state - Create non-solicitation and non-disclosure provisions alongside a non-compete **DO NOT** use this skill without subsequent attorney review. Non-compete enforceability varies significantly by state and jurisdiction. This is a drafting tool, not legal advice. --- ## Core Principle A NON-COMPETE IS ONLY AS STRONG AS ITS REASONABLENESS — OVERLY BROAD RESTRICTIONS ARE UNENFORCEABLE AND DAMAGE YOUR RELATIONSHIP WITH THE SIGNER. --- ## Phase 1: Agreement Context ### Required Inputs | Input | What to Ask | Default | |-------|------------|---------| | **Your business** | "What is your business name and industry?" | No default — must be provided | | **Signer's role** | "Who is signing this? (employee, contractor, partner, seller of a business)" | Employee | | **Competitive activity** | "What activities do you want to restrict?" | No default — must be provided | | **Geographic scope** | "Where should the restriction apply? (state, region, nationwide)" | State-level | | **Duration** | "How long should the restriction last after departure?" | 12 months | | **State** | "Which state's law governs this agreement?" | No default — critical for enforceability | **GATE: Do not proceed without the signer's role, competitive activity, and governing state.** --- ## Phase 2: Agreement Structure ``` ## Non-Compete Agreement **This Non-Compete Agreement** is entered into as of [Date] between: **Company:** [Business Legal Name] ("Company") **[Employee/Contractor/Partner]:** [Name] ("Restricted Party") ### 1. Recitals WHEREAS, the Restricted Party [is employed by / provides services to / is a partner in] the Company and has access to confidential information, trade secrets, and client relationships; WHEREAS, the Company has a legitimate business interest in protecting its [confidential information / customer relationships / goodwill / specialized training provided]; NOW THEREFORE, in consideration of [continued employment / compensation of $X / the opportunity to participate in the business / the purchase price of the business], the parties agree as follows: ### 2. Non-Compete Covenant During the Restricted Period and within the Restricted Territory, the Restricted Party shall not, directly or indirectly: a) Engage in, own, manage, operate, or control any business that competes with the Company's [specific business activities] b) Serve as an employee, contractor, officer, director, or advisor to any competing business c) Invest in any competing business (except passive investments of less than 5% in publicly traded companies) **Competing business** means any business that [specific definition of competitive activity — be narrow and specific]. ### 3. Restricted Period The restrictions in Section 2 apply during the Restricted Party's engagement with the Company and for [12/18/24] months following the termination of the relationship, regardless of the reason for termination. ### 4. Restricted Territory The restrictions apply within [specific geographic scope]: - [Option A: specific states or metro areas] - [Option B: within X miles of any Company office or client location] - [Option C: nationwide — use only if justifiable] ### 5. Non-Solicitation For [12/24] months following termination, the Restricted Party shall not: a) Solicit, contact, or attempt to do business with any client or customer of the Company with whom the Restricted Party had contact during the last [12/24] months of engagement b) Recruit, solicit, or encourage any employee or contractor of the Company to leave the Company ### 6. Non-Disclosure The Restricted Party shall not disclose or use any Confidential Information of the Company during or after the engagement. Confidential Information includes [customer lists, pricing, strategies, trade secrets, proprietary processes, financial information]. ### 7. Consideration In exchange for the Restricted Party's obligations under this Agreement, the Company provides the following consideration: [Employment / continued employment / $X lump sum / $X monthly during restriction period / access to trade secrets and specialized training / proceeds from business sale] ### 8. Remedies The Restricted Party acknowledges that a breach would cause irreparable harm. The Company shall be entitled to injunctive relief in addition to any other legal remedies, including recovery of attorney fees. ### 9. Severability If any provision is found unenforceable, the court may modify it to the minimum extent necessary to make it enforceable rather than voiding the entire agreement. ### 10. Governing Law This Agreement is governed by the laws of [State]. ``` --- ## Phase 3: Enforceability Review ``` ## Enforceability Considerations ### State-Specific Notes [Provide general guidance for the governing state — examples:] **Generally Enforceable States:** Most states enforce reasonable non-competes (FL, TX, GA, NC, OH, PA, and most others). **Restrictive States:** - **California:** Non-competes are generally unenforceable for employees (Cal. Bus. & Prof. Code 16600). Use NDAs and non-solicitation instead. - **Colorado:** Enforceable only for executives/management earning above threshold, or for sale of business. - **Minnesota, Oklahoma, North Dakota:** Significant restrictions or bans on employee non-competes. - **Washington:** Enforceable only above income thresholds. ### Reasonableness Factors Courts Examine | Factor | Reasonable | Likely Unreasonable | |--------|-----------|-------------------| | Duration | 6-12 months | 3+ years | | Geography | Metro area or state | Nationwide (without justification) | | Scope | Specific competing activities | "any business" | | Consideration | New employment, promotion, or payment | Nothing (signing existing employee with no new benefit) | ### Red Flags That Weaken Enforceability - No consideration (signing an existing employee without new benefit) - Overly broad scope (restricting all work, not just competing work) - Excessive duration (varies by state, but over 2 years is suspect) - No legitimate business interest (protecting goodwill, trade secrets, or client relationships) ``` --- ## Phase 4: Finalize ``` ## Agreement Checklist - [ ] Competitive activity is narrowly and specifically defined - [ ] Duration is reasonable for the industry and state - [ ] Geographic scope is limited to where you actually do business - [ ] Adequate consideration is provided (not just continued at-will employment) - [ ] Non-solicitation clause included (often more enforceable than non-compete) - [ ] Non-disclosure clause included - [ ] Severability clause allows judicial modification - [ ] Governing state's enforceability rules reviewed - [ ] Agreement reviewed by an attorney in the governing state - [ ] Both parties have signed with dates ``` --- ## Example: Marketing Agency Employee **Scope:** Cannot work for or start a competing marketing agency serving the healthcare industry. **Duration:** 12 months. **Geography:** Within the state of Texas. **Non-solicitation:** Cannot solicit agency clients for 18 months. **Consideration:** Employment + access to proprietary client strategies and processes. --- ## Anti-Patterns - **Overly broad scope** — "cannot work in any capacity for any competitor" is unenforceable in most states. Narrow to specific activities and industries. - **No consideration for existing employees** — signing an existing employee without a raise, promotion, or bonus often voids the agreement - **Ignoring state law** — California non-competes are void for employees. Know your state's rules. - **Using a template from another state** — enforceability is jurisdiction-specific. A Texas-valid non-compete may be void in Colorado. - **Relying solely on the non-compete** — non-solicitation and NDA clauses are often more enforceable and more practical. Layer all three. --- ## Recovery - **Operating in California or another ban state:** Replace the non-compete with a strong NDA and non-solicitation agreement. These are generally enforceable everywhere. - **Non-compete already signed without consideration:** May be unenforceable. Consult an attorney before relying on it. - **Former employee violating the agreement:** Document the violation, send a cease and desist, and consult an attorney about injunctive relief. - **Candidate refuses to sign:** Consider whether the role truly requires a non-compete. Non-solicitation and NDA may be sufficient and less objectionable.