Six editable non-compete templates for US small business: a standalone employee agreement, a drop-in clause, a current-employee version with separate consideration, a contractor version, a sale-of-business covenant, and a non-solicitation agreement for the states where a non-compete is void. Bracketed fields for duration, geography, and the interest you are protecting. Download as DOCX. No signup.
The first non-compete I ever handed someone was a form I found online, filled in with a two-year term and the name of my state, because that felt like what a real company did. A lawyer read it later and told me two things. In the state where that employee actually worked, the restriction was void. And the thing I was genuinely worried about, which was the client list, was covered by a document I had not bothered to send.
That is the whole problem with non-compete paperwork for a small business. The document is easy. The judgment behind it is not, because whether the paper is worth anything is decided by the state where your employee works, and that answer has moved several times in the last few years.
There are six templates here: a standalone employee non-compete, a clause you can drop into an employment agreement, a version for an employee already on staff, a contractor version, a sale-of-business covenant, and a non-solicitation agreement for the situations where a non-compete is either void or overkill. Each downloads as an editable Word document, free and without an email, with the decisions left as bracketed fields instead of defaults.
TL;DR
A non-compete agreement restricts an employee from doing competing work for a set time and area after leaving. There is no federal ban: the FTC rule never took effect and was removed from the CFR in February 2026, so state law governs. Four states (California, Minnesota, North Dakota, Oklahoma) void nearly all employee non-competes; several others void them below an earnings threshold set by statute. Download six free DOCX templates: employee, clause, current-employee, contractor, sale-of-business, and non-solicitation. This is general information, not legal advice.
What These Templates Are
These are fill-in-the-blank non-compete documents for an employer, covering the situations a small business actually runs into: a new hire, an existing employee moving into a sensitive role, a contractor, and the sale of a business. Each is written as a starting draft, not a finished contract, because the terms that decide enforceability have to be chosen for your situation.
A non-compete is one type of restrictive covenant. It restricts competing work after employment ends, which makes it the broadest and the hardest to enforce of the three common tools. The other two, confidentiality and non-solicitation, protect narrower things and hold up in more places.
Common, and No Longer Regulated Federally
The Federal Trade Commission estimated in its 2024 rulemaking that about one in five American workers, roughly 30 million people, was subject to a non-compete. That rule is dead: the FTC states plainly that the Noncompete Rule is not in effect and is not enforceable, after a court order stopped enforcement in August 2024, the agency dismissed its appeal in September 2025, and the rule was removed from the Code of Federal Regulations in February 2026. Non-competes are governed by state law only. This is general information, not legal advice.
Check Your State First
Before you fill in a single bracket, confirm what the state where your employee actually works allows. In four states an employee non-compete is void no matter how carefully it is drafted, and in several others it is void below an earnings threshold set by statute. The employee's work state controls, not your headquarters, which is what catches employers who hire remotely.
Group
What it means
What to use instead
Ban states: California, Minnesota, North Dakota, Oklahoma
Employee non-competes are void, with narrow exceptions tied mainly to the sale of a business
Confidentiality plus a non-solicitation agreement, where the state allows one
Threshold states, including Illinois, Washington, Colorado, Oregon
Void below an earnings floor that is set by statute and often adjusted for inflation each year
Check the current figure for the year before deciding; use the non-solicit below the floor
Reasonableness states (the majority)
Enforceable if reasonable in duration, geography, and scope, tied to a real interest, with consideration
The employee or clause template, filled in narrowly
Sale of a business (nearly everywhere)
A covenant tied to the goodwill or ownership interest sold is treated far more favorably than an employee restriction
The sale-of-business template
California is the state to be most careful about, because the exposure runs in the other direction. Under Business and Professions Code Section 16600.1, it is unlawful to include a void non-compete clause in an employment contract at all, employers had to notify affected current and former employees in writing by February 14, 2024, and a violation counts as an act of unfair competition.
Minnesota voids covenants not to compete under Minnesota Statutes Section 181.988, keeping only narrow exceptions for the sale or dissolution of a business. Washington takes the threshold approach instead: its Department of Labor and Industries publishes an earnings floor that is adjusted annually and exceeded $123,000 for employees in 2025, with a much higher figure for independent contractors. Oklahoma voids the restraint itself under Title 15 Section 219A while still permitting a limit on directly soliciting the former employer's established customers.
Process Rules Can Void an Otherwise Reasonable Agreement
Several states regulate how you ask, not just what you ask for. Under the Illinois Freedom to Work Act, a covenant not to compete or not to solicit is void unless the employer advises the employee in writing to consult an attorney and gives at least 14 calendar days to review the document, and the Act also sets earnings floors that step up on January 1, 2027. A perfectly modest six-month restriction is void there if you skip either step. Confirm the process rules for the employee's state before you send the file. This is general information, not legal advice.
Which Template Should You Use?
Match the template to who is signing and when. A new hire in a state that allows non-competes gets the standalone agreement or the clause. Someone already on staff needs the current-employee version, because the consideration question changes. A contractor gets the narrow version, a seller gets the sale-of-business covenant, and anyone in a ban state gets the non-solicitation agreement instead.
Employee Non-Compete
New hire, standalone
The full standalone agreement for a new hire in a state that allows non-competes. Consideration, a named business interest, a bracketed duration and geography, protected-rights language, and a governing-law section that switches the restriction off where state law voids it.
Non-Compete Clause
Drop into a contract
The same restriction written as a numbered clause to insert into an employment agreement or offer letter, with definitions, carve-outs, a state-law limit, and drafting notes to delete before you send it.
Current-Employee Version
Someone already on staff
For asking an existing employee to sign, where continued employment alone may not be enough. Adds a separate consideration section, a written advisement to consult an attorney, and a review period before signing.
Contractor Version
Freelancers and 1099 work
A narrow restriction for an independent contractor, limited to named accounts or a defined category, paired with customer and personnel non-solicitation and a statement that contractor status is unchanged.
Sale-of-Business Version
Seller covenant
The covenant a buyer asks a seller to sign at closing, tied to the goodwill or ownership interest being sold. This is the version that survives in states that void ordinary employee non-competes.
Non-Solicitation Agreement
The narrower alternative
Restricts who the person may approach rather than where they may work: customers they personally served and colleagues they worked with, for a stated period, with carve-outs for general advertising.
Start With the State and the Person
Hiring someone new in a state that allows non-competes: the employee agreement, or the clause if you already have an employment contract. Asking a current employee to sign: the current-employee version, with the new consideration written into the document. Engaging a freelancer: the contractor version. Buying a business: the sale-of-business covenant. Working in California, Minnesota, North Dakota, or Oklahoma, or below a threshold state's earnings floor: the non-solicitation agreement plus a confidentiality agreement. This is general information, not legal advice.
Whichever version you pick, it gets signed in the same sitting as the offer letter and the rest of the new hire paperwork, which is where the practical problems start rather than end. Applicant tracking is coming soon to FirstHR.
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Download all six as one set or take the version you need. Each arrives as an editable DOCX with the sections, brackets, carve-outs, and state-law language already in place, free and with no signup. Fill in the interest you are protecting, the duration, the geography, the restricted activities, and the consideration, then delete any drafting notes before you send it.
Download All 6 Non-Compete Templates
Employee agreement, drop-in clause, current-employee version, contractor version, sale-of-business covenant, and non-solicitation agreement. All as DOCX files in one download.
Template 1: Employee Non-Compete Agreement
The standalone agreement for a new hire in a state that permits non-competes, with consideration, a named business interest, bracketed duration and geography, explicit carve-outs, and a governing-law section that switches the restriction off where state law voids it.
Employee Non-Compete Agreement
EMPLOYEE NON-COMPETE AGREEMENT
This Non-Compete Agreement (the "Agreement") is made effective as of _
(the "Effective Date") by and between [Company legal name], a [state] [entity type],
located at [address] (the "Company"), and [Employee name], residing at [address]
(the "Employee").
The Employee's primary work location is [city, state]. The parties intend the law of
that state to govern whether the restrictions below are enforceable.
1. CONSIDERATION
The Employee is signing this Agreement in exchange for [the Company's offer of
employment, which the Employee accepts by signing / the following separate
consideration: describe the payment, bonus, promotion, or benefit], which the Employee
is not otherwise entitled to receive. The parties agree this is adequate consideration
for the restrictions below.
2. LEGITIMATE BUSINESS INTEREST
The Company is entering into this Agreement to protect the following specific interests:
[list the actual interests, for example: trade secrets and confidential pricing models;
customer relationships the Employee will manage; specialized training the Company will
provide]. The Employee acknowledges that the Employee will have access to these
interests in the course of employment.
3. NON-COMPETE RESTRICTION
For [6 to 24] months after the Employee's employment ends, for any reason, the Employee
will not perform [describe the specific competing activities, for example: sales,
account management, or product development for a business that offers services
substantially similar to those the Employee performed for the Company during the final
12 months of employment] within [describe the actual geography, for example: a 25-mile
radius of the Company's [city] office, or the following counties: _____].
4. WHAT THIS AGREEMENT DOES NOT RESTRICT
This Agreement does not restrict the Employee from: (a) using general skills, training,
knowledge, and experience the Employee had before employment or acquired generally in
the industry; (b) working for a competitor in a role that does not involve the
activities described in Section 3; (c) accepting employment outside the geographic area
described in Section 3; or (d) any activity that applicable state law protects.
5. CONFIDENTIALITY
The Employee's obligations under [the Company's confidentiality or non-disclosure
agreement dated _] remain in effect and are separate from this Agreement.
Those obligations survive regardless of whether the restrictions in Section 3 are
enforceable.
6. PROTECTED RIGHTS
Nothing in this Agreement limits the Employee from reporting possible violations of law
to a government agency, filing a charge with or participating in an investigation by an
agency such as the EEOC or NLRB, or discussing wages or working conditions. This
Agreement does not waive any right that cannot be waived by law.
7. AT-WILL EMPLOYMENT
This Agreement does not change the at-will nature of the employment relationship, and
it does not promise employment for any period. It governs conduct after employment
ends.
8. GOVERNING LAW AND STATE-LAW LIMITS
This Agreement is governed by the law of [the state where the Employee primarily works].
If the law of that state voids or limits the restriction in Section 3, that section does
not apply, or applies only to the extent the state permits, and the remainder of this
Agreement stays in effect. The Company will not seek to enforce Section 3 against an
employee working in a state where such a restriction is void.
9. SEVERABILITY AND REMEDIES
If a court finds any part of this Agreement unenforceable, the rest remains in effect,
and the court may reduce the duration, geography, or scope to what the court considers
reasonable, where state law allows that. A breach may cause harm that money alone cannot
fix, and the Company may seek injunctive relief in addition to other remedies.
10. ENTIRE AGREEMENT AND SIGNATURES
This is the entire agreement between the parties on this subject and may be amended only
in writing signed by both parties.
EMPLOYEE
Signature: __ Name: __ Date: _
COMPANY
Signature: __ Name: __ Title: _
DISCLAIMER: This is a sample template for general information only and is not legal
advice. Employee non-competes are void in California, Minnesota, North Dakota, and
Oklahoma, and void below an earnings threshold in a number of other states, including
Illinois, Washington, Colorado, and Oregon. Some states also require an attorney
advisement in writing and a review period before signing. Confirm the law of the state
where the employee actually works and have a qualified employment attorney review this
Agreement before use.
Template 2: Non-Compete Clause for an Employment Agreement
The same restriction written as a numbered clause to insert into an employment contract or offer letter, with definitions, carve-outs, a state-law limit, and drafting notes to delete before sending.
Non-Compete Clause for an Employment Agreement
NON-COMPETE CLAUSE (INSERT INTO AN EMPLOYMENT AGREEMENT)
Insert this clause into an employment agreement or offer letter as a numbered section,
usually after the confidentiality section. Renumber to match the surrounding document.
SECTION [X]. RESTRICTED ACTIVITY AFTER EMPLOYMENT
(a) Definitions. "Restricted Period" means the [6 to 24] months following the end of
Employee's employment for any reason. "Restricted Area" means [a 25-mile radius of
Employee's primary Company work location / the following counties: _____].
"Restricted Activity" means [describe the specific work, for example: selling or
managing accounts for products or services substantially similar to those Employee
sold or managed for the Company during the final 12 months of employment].
(b) Restriction. During the Restricted Period and within the Restricted Area, Employee
will not perform the Restricted Activity for any person or entity other than the
Company.
(c) Consideration. Employee is entering into this Section in exchange for [the offer of
employment Employee accepts by signing this Agreement / the following separate
consideration: _____], which Employee is not otherwise entitled to receive.
(d) Carve-outs. This Section does not restrict Employee from using general skills,
training, and industry knowledge; from working for a competitor in a role that does
not involve the Restricted Activity; or from any activity protected by law,
including reporting a suspected violation of law to a government agency.
(e) State-law limits. This Section is governed by the law of the state where Employee
primarily works. If that state voids or limits post-employment non-compete
restrictions, this Section does not apply, or applies only as far as that state
permits, and the remainder of the Agreement, including the confidentiality and
non-solicitation sections, stays in full effect.
(f) Severability. If a court finds any part of this Section unenforceable, the rest of
the Agreement remains in effect, and the court may narrow the Restricted Period,
Restricted Area, or Restricted Activity where state law allows.
DRAFTING NOTES (DELETE BEFORE SENDING)
•Fill in every bracket. A clause that restricts "any competitive activity anywhere" is
the version courts most often refuse to enforce.
•Match the geography to where the business actually operates, not to the whole state
by default.
•If the employee is already on staff, use the current-employee version with separate
consideration instead of adding this clause to an existing contract.
•Several states require a written advisement to consult an attorney and a minimum
review period before the employee signs. Confirm both before you send the document.
DISCLAIMER: This is a sample clause for general information only and is not legal
advice. Enforceability is decided by the law of the state where the employee works, and
that law changes. Have a qualified employment attorney review the clause and the
For asking someone already on staff to sign, where continued employment alone may not be adequate consideration. Adds a separate consideration section, a written advisement to consult an attorney, and a review period before signing.
This Non-Compete Agreement (the "Agreement") is made effective as of _
between [Company legal name] (the "Company") and [Employee name] (the "Employee"), who
is already employed by the Company as of the date of this Agreement.
The Employee's primary work location is [city, state].
1. WHY THIS AGREEMENT IS BEING OFFERED NOW
The Employee's role has changed, or the Employee is being given access to information or
relationships the Employee did not previously have, specifically: [describe the change,
for example: promotion to [title]; assignment of the [name] account portfolio; access to
the Company's pricing model].
2. SEPARATE CONSIDERATION
In exchange for signing this Agreement, the Company will provide the following, which
the Employee is not otherwise entitled to receive:
•[A signing payment of ____________ dollars, gross, payable on ____________.]
•[A promotion to [title], effective ____________, with a base salary of ____________.]
•[Other consideration: ____________.]
The parties acknowledge that this consideration is separate from, and in addition to,
the Employee's continued employment. Continued employment alone is not treated as
sufficient consideration under this Agreement.
3. REVIEW PERIOD AND RIGHT TO CONSULT AN ATTORNEY
The Company advises the Employee in writing to consult an attorney before signing this
Agreement. The Employee has been given at least [14] calendar days to review it. The
Employee may sign sooner if the Employee chooses, and signing sooner does not shorten
the period the Company was required to offer.
4. NON-COMPETE RESTRICTION
For [6 to 24] months after the Employee's employment ends, for any reason, the Employee
will not perform [describe the specific competing activities] within [describe the
geography]. This restriction does not limit the Employee's use of general skills,
training, and industry knowledge, or work for a competitor in a role that does not
involve the described activities.
5. PROTECTED RIGHTS AND AT-WILL STATUS
Nothing in this Agreement limits the Employee from reporting possible violations of law
to a government agency, participating in an agency investigation, or discussing wages or
working conditions. This Agreement does not change the at-will nature of employment.
6. GOVERNING LAW, SEVERABILITY, SIGNATURES
This Agreement is governed by the law of the state where the Employee primarily works.
If that state voids or limits the restriction in Section 4, that section does not apply,
or applies only as far as the state permits, and the rest of the Agreement remains in
effect.
EMPLOYEE
Signature: __ Name: __ Date: _
COMPANY
Signature: __ Name: __ Title: _
DISCLAIMER: This is a sample template for general information only and is not legal
advice. Asking an existing employee to sign a non-compete raises consideration questions
that are decided state by state, and some states set a statutory review period and
require a written attorney advisement. Confirm your state's rules and have a qualified
employment attorney review this Agreement before use.
Template 4: Independent Contractor Non-Compete and Non-Solicitation
A deliberately narrow restriction for a freelancer or 1099 contractor, limited to named accounts, paired with customer and personnel non-solicitation and a statement that contractor status is unchanged.
Independent Contractor Non-Compete and Non-Solicitation Agreement
INDEPENDENT CONTRACTOR NON-COMPETE AND NON-SOLICITATION AGREEMENT
This Agreement is made effective as of _ between [Company legal name] (the
"Company") and [Contractor legal name] (the "Contractor"), in connection with the
services described in [the Independent Contractor Agreement dated _].
1. INDEPENDENT CONTRACTOR STATUS
Nothing in this Agreement creates an employment relationship. The Contractor controls
the manner and means of performing the services, may work for other clients, and is
responsible for the Contractor's own taxes, tools, and personnel.
2. WHAT IS BEING PROTECTED
Through the engagement, the Contractor will have access to [describe, for example: the
Company's client list and project pricing; product designs; the specific accounts named
in Exhibit A]. The restrictions below are limited to those interests.
3. NARROW NON-COMPETE
During the engagement and for [6 to 12] months afterward, the Contractor will not
provide [describe the specific services] to [name the specific competitors, or describe
a narrowly defined category, for example: any business that directly competes for the
accounts listed in Exhibit A] within [describe the geography or the named accounts].
This Agreement does not restrict the Contractor from serving other clients, from
continuing existing client relationships disclosed before the engagement began, or from
using general skills and industry knowledge.
4. NON-SOLICITATION
During the engagement and for [12] months afterward, the Contractor will not: (a)
solicit business from any Company client the Contractor worked with or learned about
during the engagement; or (b) solicit any Company employee or contractor to end their
relationship with the Company. General advertising not targeted at those people is not a
violation.
5. CONFIDENTIALITY AND PROTECTED RIGHTS
The Contractor's confidentiality obligations under [the Independent Contractor Agreement
/ the non-disclosure agreement dated _] remain in effect. Nothing here
limits the Contractor from reporting possible violations of law to a government agency
or participating in a government investigation.
6. CONSIDERATION, GOVERNING LAW, SIGNATURES
The Contractor is signing in exchange for [the engagement and the fees payable under the
services agreement / separate consideration of _____]. This Agreement is governed
by the law of [state]. If that state voids or limits these restrictions, the affected
section does not apply and the rest remains in effect.
CONTRACTOR
Signature: __ Name: __ Date: _
COMPANY
Signature: __ Name: __ Title: _
DISCLAIMER: This is a sample template for general information only and is not legal
advice. Restricting where a contractor may work can also cut against independent
contractor status, and several states apply their non-compete statutes to contractors as
well as employees, sometimes at a separate earnings threshold. Confirm classification and
state law, and have a qualified attorney review this Agreement before use.
Template 5: Sale-of-Business Non-Compete
The covenant a buyer asks a seller to sign at closing, tied to the goodwill or ownership interest being sold and to the area where that business was carried on. California recognizes this category by statute in Section 16601, which is why it survives where employee non-competes do not.
Sale-of-Business Non-Compete Agreement
NON-COMPETE AGREEMENT (SALE OF A BUSINESS)
This Non-Compete Agreement (the "Agreement") is made effective as of _ (the
"Closing Date") between [Seller legal name] (the "Seller") and [Buyer legal name] (the
"Buyer"), in connection with [the Asset Purchase Agreement / Stock Purchase Agreement /
Membership Interest Purchase Agreement] dated _ (the "Purchase Agreement").
1. THE TRANSACTION
Under the Purchase Agreement, the Seller is selling to the Buyer [all or substantially
all of the operating assets of [business name] together with its goodwill / all of the
Seller's ownership interest in [entity name]]. Part of the price the Buyer is paying is
for the goodwill of the business, which depends on the Seller not immediately competing
against it.
2. CONSIDERATION
The consideration for this Agreement is [the purchase price paid under the Purchase
Agreement / an allocated amount of _____ dollars of the purchase price], receipt
of which the Seller acknowledges. This Agreement is a condition of closing.
3. COVENANT NOT TO COMPETE
For [3 to 5] years after the Closing Date, the Seller will not carry on a business that
is substantially similar to [describe the business sold] within [describe the geographic
area in which the business sold has been carried on, for example: the following
counties: _____].
For the same period, the Seller will not solicit the customers or employees of the
business sold, and will not use the trade name, brand, or customer information conveyed
to the Buyer.
4. WHAT THE SELLER MAY STILL DO
This Agreement does not prevent the Seller from: (a) owning up to [2] percent of a
publicly traded company; (b) working in [describe any agreed carve-out, for example: a
non-competing line of business]; or (c) any activity outside the geographic area
described in Section 3.
5. GOVERNING LAW AND ENFORCEMENT
This Agreement is governed by the law of [state]. Most states allow a covenant tied to
the sale of a business and its goodwill even where they void ordinary employee
non-competes, provided the duration and geography are reasonable and tied to the
business sold. If a court finds any part unenforceable, the rest remains in effect and
the court may narrow the restriction where state law allows.
6. SIGNATURES
SELLER
Signature: __ Name: __ Date: _
BUYER
Signature: __ Name: __ Title: _
DISCLAIMER: This is a sample template for general information only and is not legal
advice. Sale-of-business covenants are governed by their own statutes and case law, and
the exception is usually tied to the sale of goodwill or of an ownership interest, which
makes the structure of the deal legally significant. If the seller will also work for the
buyer afterward, employee non-compete rules may apply to that role separately. Have a
qualified attorney review this Agreement and the Purchase Agreement before use.
Template 6: Non-Solicitation Agreement
The narrower alternative, restricting who the person may approach rather than where they may work: customers they personally served and colleagues they worked with, for a stated period, with carve-outs for unsolicited inquiries and general advertising.
Non-Solicitation Agreement (Customers and Employees)
NON-SOLICITATION AGREEMENT
This Non-Solicitation Agreement (the "Agreement") is made effective as of _
between [Company legal name] (the "Company") and [Employee or Contractor name] (the
"Signer"). It restricts who the Signer may approach after the working relationship ends.
It does not restrict where the Signer may work.
1. CONSIDERATION
The Signer is signing in exchange for [the Company's offer of employment or engagement,
accepted by signing / the separate consideration of _____], which the Signer is
not otherwise entitled to receive.
2. CUSTOMER NON-SOLICITATION
For [12] months after the working relationship ends, the Signer will not solicit business
of the type the Company provides from any customer the Signer personally served, managed,
or learned confidential information about during the final [12] months of the
relationship.
Responding to an unsolicited inquiry, or general advertising not targeted at those
customers, is not a violation of this Section.
3. EMPLOYEE NON-SOLICITATION
For [12] months after the working relationship ends, the Signer will not solicit any
Company employee or contractor the Signer worked with to leave the Company. General job
postings and advertising not targeted at Company personnel are not a violation.
4. WHAT THIS AGREEMENT DOES NOT DO
This Agreement does not prevent the Signer from working for a competitor, starting a
competing business, or using general skills and industry knowledge. It restricts
solicitation only.
5. PROTECTED RIGHTS
Nothing in this Agreement limits the Signer from reporting possible violations of law to
a government agency, participating in a government investigation, or discussing wages or
working conditions.
6. GOVERNING LAW, SEVERABILITY, SIGNATURES
This Agreement is governed by the law of the state where the Signer primarily works. If
that state limits non-solicitation restrictions, including by setting an earnings
threshold, this Agreement applies only as far as that state permits. If a court finds any
part unenforceable, the rest remains in effect.
SIGNER
Signature: __ Name: __ Date: _
COMPANY
Signature: __ Name: __ Title: _
DISCLAIMER: This is a sample template for general information only and is not legal
advice. Non-solicitation agreements are limited by state law too, sometimes at a lower
earnings threshold than non-competes, and a customer non-solicit drafted too broadly can
be read as a disguised non-compete. Have a qualified employment attorney review this
Agreement before use.
Word or PDF?
Every template downloads as a Word file, and you convert it to PDF yourself once it is filled in. DOCX opens in Word, Google Docs, and Pages, and each of those exports or prints to PDF in one step, so a fixed final version is a single click away.
The order matters more than the format. A non-compete with an empty duration or an unnamed geography protects nothing, so fill in the brackets first, delete the drafting notes, then freeze it as a PDF if you want to. Keep the editable original, because the next hire will need a different geography or a different term.
What a Non-Compete Includes
A complete non-compete covers four groups: the parties and the interest being protected, the restriction itself, the limits and carve-outs, and the legal and closing terms. The groups below are the structure the templates follow.
Parties and purpose
Company and signer, with addresses
The signer’s actual work state
The interest being protected
The restriction
Duration after employment ends
Geographic area
The specific activities restricted
Limits and carve-outs
General skills and industry knowledge
Non-competing roles
Protected reports to agencies
Legal and closing
Consideration for signing
Governing law and state-law switch-off
Severability, remedies, signatures
Two of those sections do disproportionate work, and generic forms usually skip both. The carve-outs, which confirm the person may still use general skills and take a non-competing role, are what make the restriction look proportionate rather than punitive. And the governing-law section, which turns the restriction off in a state that voids it, is what keeps one relocation from turning your standard document into a compliance problem.
What Makes One Hold Up
In states that allow non-competes, courts weigh four things: how long the restriction lasts, where it applies, what activities it covers, and what the person received for agreeing to it. Those four fields are exactly the ones left bracketed in the templates, because they cannot be filled in generically.
Duration: shorter survives
Courts in states that allow non-competes ask whether the length is no longer than the protected interest actually requires. For most small-business roles that is measured in months, not years, and a term that outlasts the value of the information or the customer relationship is the first thing a judge trims or voids. The templates leave the period bracketed rather than defaulting to a long number, because the honest answer is usually shorter than the drafter’s instinct. This is general information, not legal advice.
Geography: where you actually operate
The restricted area should match the territory the business serves and the person worked in, not a whole state chosen for convenience. A radius around the office or a list of named counties is easier to defend than a blanket statewide or nationwide restriction, and for a remote worker the analysis gets harder rather than easier. Write the geography before you write the duration; it is the field that most often exposes an agreement as overbroad. This is general information, not legal advice.
Scope: activities, not industries
A restriction on the specific work the person did for you is defensible. A restriction on working anywhere in the industry, in any capacity, usually is not, because it stops the person from earning a living without protecting anything in particular. Name the activity: the accounts they managed, the product line they built, the services they sold. The narrower the activity clause, the more likely the rest of the agreement survives with it. This is general information, not legal advice.
Consideration: the part employers forget
The signer has to receive something of value in exchange. For a new hire, the job offer itself is usually enough. For someone already on staff, several states treat continued employment alone as insufficient, so a raise, bonus, or promotion is what makes the agreement stand. Illinois goes further and defines adequate consideration by statute, counting either two years of employment after signing or separate professional or financial benefits. Confirm the rule in your state before you circulate anything. This is general information, not legal advice.
The pattern across all four is proportionality. A narrow, specific, well-paid-for restriction is far stronger than a sweeping one, and the aggressive version is usually the one that fails. If a draft would stop a former employee from working almost anywhere in their field for years, that is a weakness, not protection.
The Existing-Employee Trap
The most common way a small business wastes a non-compete is by circulating one to the whole current team with nothing offered in return. Contracts need consideration, and while the job offer covers a new hire, several states do not accept continued employment on its own for someone already on staff. Illinois settles the point by statute, defining adequate consideration as either two years of employment after signing or separate professional or financial benefits. Use the current-employee template, name what the person is getting, and record it. This is general information, not legal advice.
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For most small-business roles, a confidentiality agreement and a non-solicitation agreement protect what you actually care about and survive in more states than a non-compete does. Each of the four documents below restricts something different, and the narrowest one that covers your real risk is the right choice.
Document
What it restricts
Best for
Confidentiality / NDA
Disclosing or using trade secrets and confidential information
Almost everyone; valid in every state, including the four ban states
Non-solicitation
Approaching the customers served and the colleagues worked with
People who own client or team relationships
Non-compete
Doing competing work at all, for a period and in an area
A small number of senior or high-access roles, where state law allows
Sale-of-business covenant
The seller competing against the goodwill just sold
Buying or selling a business, in nearly any state
Start with the confidentiality agreement, which stops someone from taking your information without stopping them from earning a living. Add the non-solicitation agreement for anyone who owns customer relationships. Reach for the non-compete only when a specific role leaves a real gap that neither of the others covers, and when the state where that person works actually permits one.
For a contractor the calculus tips further toward the narrow tools, because a broad work restriction argues against the independence the classification depends on. Write the confidentiality and non-solicitation terms into the independent contractor agreement itself, and keep any competitive restriction tied to named accounts.
Send, Sign, and Store
A non-compete earns its value at two moments: when it is signed with the right consideration, and years later when someone has to produce it. Both are process problems rather than drafting problems, and both are where small businesses lose agreements they thought they had. Run through the checks below before the document goes out. Applicant tracking is coming soon to FirstHR.
Confirm the work state
Look up the rule for the state where the person actually works and lives, not where the company is registered. A remote hire can put you under another state’s law overnight.
Check the process rules
Some states require a written advisement to consult an attorney and a minimum review period before signing. Missing the process voids the agreement even if the terms are modest.
Fill in every bracket
An unfilled duration, geography, or activity field is what turns a template into an unenforceable form. If you cannot name the interest you are protecting, do not send the document.
Get a local review
For any role where the restriction would actually matter, a short review by an attorney licensed in the employee’s state costs far less than an agreement that fails when you need it.
After signing, the agreement has to stay findable. Keep the executed copy in the personnel file together with a record of what the person received for signing, because in a dispute the consideration is the fact you will be asked to prove. Disciplined HR document management is what turns a signed PDF into something you can retrieve three years later.
Pick and fill the version
Choose the employee, clause, current-employee, contractor, sale-of-business, or non-solicit version, then fill in the interest, duration, geography, and consideration.
Sign it at the right moment
A new hire signs with the rest of the offer paperwork. An existing employee signs after the review period, with the separate consideration named in the document.
Store the executed copy
Keep the signed agreement with the person’s record, along with proof of what they received for signing, so the file answers the question years later.
Re-check when things move
Revisit the agreement when someone relocates, changes roles, or when the state changes its rule, because any of the three can turn a valid restriction into a void one.
The templates above work on their own. To run them without chasing paper, FirstHR sends the agreement for e-signature alongside the rest of the onboarding documents, keeps the executed copy against the employee or contractor profile, and stores it with the rest of the employee record in one retrievable place. FirstHR is an onboarding and HR platform, not a law firm: it does not draft your non-compete, decide whether the restriction is valid in your state, or provide legal advice, so pair it with an attorney licensed where the person works. Applicant tracking is coming soon to FirstHR.
Key Takeaways
Six free DOCX templates cover the real situations: employee, drop-in clause, current employee, contractor, sale of a business, and non-solicitation.
There is no federal ban; the FTC rule never took effect and was removed from the Code of Federal Regulations in February 2026, leaving state law in charge.
California, Minnesota, North Dakota, and Oklahoma void nearly all employee non-competes, and the state where the employee actually works is the one that decides.
Duration, geography, restricted activity, and consideration decide enforceability, which is why those four fields are left bracketed rather than filled with defaults.
For an employee already on staff, offer something new for signing; continued employment alone is not enough in several states.
For most roles a confidentiality agreement plus a non-solicitation agreement protects more and fails less often. This is general information, not legal advice.
Frequently Asked Questions
Is there a free non-compete agreement template I can use?
Yes. Every template on this page downloads free, as an editable Word document, with no email required. There are six of them: a standalone employee non-compete, a clause to insert into an employment agreement, a version for an employee already on staff, a contractor version, a sale-of-business covenant, and a non-solicitation agreement. Each one leaves the decisions that matter as bracketed fields rather than filling them with a default: the duration, the geographic area, the specific activities restricted, and the consideration the person receives for signing. What a free template cannot do is tell you whether the restriction is legal where your employee works. That question is decided by state law, it varies enormously, and it is the reason each template includes a governing-law section that switches the restriction off in states that void it. This is general information, not legal advice.
Are non-compete agreements enforceable?
It depends entirely on the state, and there is no federal ban. The Federal Trade Commission rule that would have banned most non-competes nationwide never took effect, and the agency confirms it is not enforceable; the rule was removed from the Code of Federal Regulations in February 2026. That leaves state law in charge. In California, Minnesota, North Dakota, and Oklahoma, employee non-competes are void almost regardless of how carefully they are drafted. In several other states, including Illinois, Washington, Colorado, and Oregon, they are void below an earnings threshold that is usually adjusted each year. In the remaining states, a non-compete is enforceable when it is reasonable in duration, geography, and scope, protects a genuine business interest, and is supported by consideration. The state that matters is where the employee actually works, not where the company is headquartered. This is general information, not legal advice.
How do I get a non-compete agreement in PDF?
Download the Word file from this page and save or print it as a PDF once you have filled it in. Each template downloads as a DOCX, which opens in Word, Google Docs, Pages, and every other common editor, and each of those can export or print to PDF in one step. The reason the templates are not offered as ready-made PDFs is practical: a non-compete is useless until the duration, geography, restricted activities, governing state, and consideration are filled in for your specific situation, and a PDF is the format people find hardest to edit. Fill in the brackets in the Word file, delete the drafting notes, convert to PDF if you want a fixed final version, then send it for signature. Keep the editable original, because you will need it the next time. This is general information, not legal advice.
How long should a non-compete last?
There is no statutory answer in most states; the term is judged by whether it is longer than the interest you are protecting actually requires. For typical small-business roles that means months rather than years, and courts in states that allow non-competes routinely trim or void a period that outlives the value of the confidential information or the customer relationship at stake. A useful test is to ask how long it would take a replacement to take over the relationships or for the pricing information to go stale. That is your term. The templates leave the period bracketed on purpose rather than printing a default number, because a drafter’s instinct is almost always longer than what the situation justifies, and an overlong term is the field that most often sinks an otherwise reasonable agreement. This is general information, not legal advice.
Can I ask an existing employee to sign a non-compete?
You can ask, but the agreement may fail unless the employee receives something new for signing. Contracts require consideration, and while a job offer covers a new hire, several states do not treat continued employment on its own as enough for someone already on staff. That is why the current-employee template includes a separate consideration section for a signing payment, a promotion, or another benefit, and asks you to name it in the document. Illinois defines the point by statute, treating either two years of employment after signing or separate professional or financial benefits as adequate consideration, and it also requires a written advisement to consult an attorney plus at least 14 calendar days to review the agreement. Rolling out a non-compete to a whole existing team without any of that is a common and expensive mistake. This is general information, not legal advice.
Does a non-compete work for an independent contractor?
Sometimes, but it carries an extra risk that an employee non-compete does not. Restricting where a contractor may work cuts against the independence that makes them a contractor rather than an employee, so an aggressive restriction can undermine the classification you rely on. Several states also apply their non-compete statutes to contractors as well as employees, sometimes at a separate and much higher earnings threshold. The contractor template on this page is deliberately narrow: it limits the restriction to named accounts or a defined category, leaves the contractor free to serve other clients and continue disclosed relationships, and pairs the restriction with customer and personnel non-solicitation, which is usually the part you actually needed. Confirm both the classification and the state rule before you send anything. This is general information, not legal advice.
What is the difference between a non-compete and a non-solicitation agreement?
A non-compete restricts where someone may work; a non-solicitation restricts who they may approach. That difference is why non-solicits survive challenges that kill non-competes: a person who can still take any job in the field suffers far less hardship, so courts have much less to object to. For most small businesses the non-solicit is also the better match for the real worry, which is rarely that a departing salesperson works somewhere else and almost always that they call the accounts they managed. Several states that void employee non-competes still enforce reasonable non-solicits, and Oklahoma’s statute is written that way explicitly, permitting a restriction on directly soliciting the former employer’s established customers while voiding the broader restraint. Start with the narrower document and add the broader one only if a real gap remains. This is general information, not legal advice.
Do I need a lawyer to use a non-compete template?
For any restriction you would actually want to enforce, yes, at least for a review. A template gives you the structure, the carve-outs, and the language most free forms leave out, which is real value and saves the drafting time. What it cannot do is apply your state’s rule, and non-compete law is the fastest-moving area of employment paperwork: states have added earnings thresholds, review periods, and outright bans in recent years, and one state makes even asking an employee to sign a void non-compete unlawful. A short review by an attorney licensed where the employee works costs far less than discovering the agreement is worthless at the moment you need it, or that requiring it created liability. Use the template to arrive at that conversation with a filled-in draft rather than a blank page. This is general information, not legal advice.
