Non-compete clauses are among the most common and misunderstood provisions in employment contracts today. Many workers are asked to sign them as a condition of hiring or promotion, often without realizing how deeply they can affect future job opportunities. So, what is a non-compete clause, and should you sign a non-compete if your employer asks? Understanding non-compete law and what’s at stake is critical before you agree to any restrictions that might follow you long after you leave a job.
At their core, non-compete clauses are designed to protect employers safeguarding client relationships, confidential information, and trade secrets. But from the employee’s perspective, they can be career-limiting. A restrictive employee non-compete might prevent you from taking a better offer, starting your own business, or working within your industry for months or even years. For many workers, that can mean lost income, stalled growth, and fewer professional options.
The legal landscape surrounding non-competes is also evolving. Some states have moved to restrict or ban them, while the Federal Trade Commission (FTC) has proposed a sweeping rule to eliminate most non-compete clauses nationwide. As of November 2025, that rule remains paused amid ongoing court challenges, leaving employees uncertain about their rights. This guide explains what a non-compete clause is, how it works, and what to consider before signing so you can protect your career and make an informed decision.
What Is a Non-Compete Clause?
A non-compete clause is a contractual agreement that restricts an employee from working for a competitor or starting a competing business for a certain period after leaving their current employer. A non-compete clause (or covenant not to compete) typically limits post-employment activity by defining time, geography, and type of work.
The purpose of a non-compete is to protect a company’s trade secrets, confidential information, and client relationships. Even well-meant clauses can have serious consequences. Overly broad restrictions can unfairly prevent workers from earning a living, and courts often strike them down as unreasonable.
Courts assess whether a clause is needed to protect business interests and whether its scope and duration are reasonable. If a clause prevents someone from working anywhere in their industry for years, that is a red flag and may be unenforceable.
How a Non-Compete Clause Works in Employment Contracts
When employers draft an employee non-compete, they typically include three core elements:
- Duration: How long after employment ends the restriction lasts (often 6–24 months).
- Geographic Scope: The area where competition is restricted, sometimes as broad as a whole state.
- Restricted Activities: The type of work or business deemed “competitive.”
Employee non-compete clauses remain common across industries, from healthcare to tech. Even when enforceability is uncertain, many employers use them to deter competition. Workers may feel pressured to sign, fearing that refusal could jeopardize a job offer.
Should You Sign a Non-Compete?
Should you sign a non-compete when it’s included in your employment contract? The answer depends on several factors, but caution is essential.
While non-competes protect employers, they frequently limit employees’ freedom and earning potential, often suppressing wages and hindering professional growth.
Before signing, employees should:
- Ask for specifics. How long is the restriction, and where does it apply?
- Request clarity. What counts as a “competitor”?
- Negotiate fair terms. Narrow the geographic range or shorten the duration.
- Consult a lawyer. An employment attorney can check if the terms are reasonable in your state.
If a clause seems unfair, you do not have to sign right away. Many employers will modify terms after hearing your concerns.
The FTC Non-Compete Rule: What’s Happening Now
In April 2024, the Federal Trade Commission (FTC) issued a final rule banning most non-compete clauses nationwide. The rule declared these agreements an “unfair method of competition” under federal law, aiming to restore job mobility and boost wages. The Federal Register’s publication of the Non-Compete Clause Rule outlined that nearly all existing non-competes for workers would be rendered unenforceable, except for certain senior executives.
However, as of November 2025, enforcement of the FTC’s rule remains on hold due to ongoing litigation in federal court. Business groups and trade associations have challenged the rule’s legality, arguing that the FTC exceeded its authority. Until courts resolve those cases, the nationwide ban is paused, meaning state law still governs whether an employee’s non-compete is valid.
If enforced, the FTC rule would mark a fundamental shift: employees could move jobs without fear of legal challenge, while employers would use alternative agreements. Until then, the enforceability of a non-compete depends on your location and the specifics of your contract.
What Employees Should Do Before Signing
Before agreeing to any employee non-compete, take these steps to protect yourself:
- Read every word carefully. Look for unclear terms or indefinite restrictions.
- Check for state limits. Some states, like California and Minnesota, have banned non-competes altogether.
- Ask for written clarification. If your employer promises the clause “won’t be enforced,” get it in writing.
- Know your rights. Employees have the right to review and negotiate before signing.
Most importantly, if you’re unsure about whether to sign, talk to an employment lawyer. A quick legal review can help you determine whether the agreement is enforceable or could restrict future job opportunities.
Legal Guidance Before You Sign
If you’re wondering if you should sign a non-compete, you’re not alone. The law surrounding these agreements is changing fast, and what’s enforceable in one state may be void in another. At Cantrell Schuette, our team of employment attorneys help workers across the country review, negotiate, and, when necessary, challenge non-compete clauses that threaten their professional freedom.
Our firm stays at the forefront of employment law developments, including the ongoing litigation over the FTC’s non-compete rule. Whether you’re reviewing a new contract or facing enforcement of an old one, we’ll help you understand what is a non-compete clause, how it affects your career, and what your legal options are.
Contact Cantrell Schuette today to talk with an experienced non-compete attorney. Knowing your rights before signing could protect your future opportunities.