Free Non-Compete Agreement Template

Non-compete agreements can be enforceable in many states, but the rules depend heavily on state law. Courts often review them case by case to decide whether the restrictions are reasonable. They usually consider factors such as:

• Whether the agreement protects a legitimate business interest, such as trade secrets, confidential information, customer relationships, or specialized training
• Whether the limits on time, location, and type of work are reasonable
• Whether the employee received something of value for signing, such as a job offer, promotion, or extra pay

Some states allow non-competes with limits on time, location, and scope of work. Others restrict or prohibit them for many employees. Because the rules around non-competes continue to change, an agreement that works in one state may not be valid in another.

Federal policy has also been shifting. In April 2024, the Federal Trade Commission (FTC) issued a rule that attempted to ban most worker non-competes nationwide. A federal court later blocked the rule, so it is not currently in effect, and state law still governs most non-compete agreements.

Because state law still controls, rules can vary widely depending on where you live or work. Some states have strict limits on employment non-compete agreements, and a few don’t allow them at all. The states below have some of the most restrictive rules.

Use a non-compete agreement when someone may gain knowledge or relationships that could allow them to compete with your business later. Common situations include:

• At the start of employment, when a worker will access confidential information, trade secrets, or business strategies
• When working with contractors or partners who could later offer similar services in the same market
• During the sale of a business, when the seller agrees not to start or join a competing business for a certain time period

A non-compete agreement protects the business while making expectations clear. Legal Templates makes it easy to prepare one by customizing a simple template.

A non-compete agreement should clearly identify who the agreement applies to and what type of competition is restricted after employment ends. Most agreements include:

• Company name and business address of the employer
• Name and title of the company representative signing the agreement
• Employee’s full name and home address
• Employee’s job title or role
• Employment status (whether the employee is starting a new job or already employed)
• Length of the restriction after employment ends, such as 6 months, 1 year, 1.5 years, or 2 years. Shorter times are more likely to be upheld by a court.
• Geographic restrictions, within a state or territory or a certain number of miles from the employer’s main office
• An optional confidentiality clause protecting trade secrets or sensitive information
• Governing law identifying which state’s laws apply
• Dispute resolution method, litigation in court, or arbitration
• Effective date showing when the agreement begins
• Signatures from the employee and the company representative

For example, the agreement might say that a marketing director cannot work with the company’s existing clients after leaving the company. That makes the limits clear for both sides.

Below is an example of how a completed non-compete agreement might look. The details are filled in to show how the information appears in the document.

State of Texas
NON-COMPETE AGREEMENT

This Non-Compete (the “Agreement”) is made as of this 15th day of March, 2026 (the “Effective Date”) by and between BrightPath Marketing LLC (“Company”), located at 901 Main Street, Houston, TX 77002, and Daniel R. Lopez (“Employee”), residing at 5402 Westheimer Road, Houston, TX 77056.

(Check one)

☑ Employee is presently serving as Senior Marketing Manager [Position].
☐ Employee will be serving as ____________________________ [Position].

Employee may have access to or may generate or otherwise come into contact with proprietary and/or confidential information of the Company or the Company’s clients. The Company wishes to enter into a non-compete agreement in the event Employee terminates employment. In consideration of the promises and mutual covenants herein, the parties agree as follows:

1. 1. 1. Employee Covenants.
         In consideration of continued employment with the Company, Employee agrees that during employment and for a period of (Check one):

☐ 6 months
 ☑ 1 year

or the longest period allowed by state law, whichever is shorter, after employment ends for any reason, including termination or resignation, the Employee will:

1. 1. 1. Not engage in, own, control, or be employed by any firm or corporation that operates a business substantially similar to or in competition with the Company;
         b. Not induce, directly or indirectly, any other employees of the Company to terminate their employment;
         c. Not solicit the business of any client of the Company.
      2. Confidentiality Agreement.
         (Check one)

☑ Employee shall not, without written consent, share or use any information relating to the Company that has not been publicly released, including but not limited to trade secrets, proprietary information, designs, research, development details, financial information, customer lists, marketing plans, or other confidential business information.

☐ Not applicable.

1. 1. 1. Injunctive Relief.
         Employee acknowledges that disclosure of confidential information or breach of the non-compete covenants may cause irreparable harm to the Company. Because financial damages alone may not adequately remedy that harm, the Company may seek injunctive relief.

Review the non-compete agreement sample below to see how the document is organized. When you’re ready, customize and download the template in Word or PDF.