The Employee Non-Compete and Why Most of Them Fail

Why this matters

A shop trains a helper into a competent service tech over three years, the tech leaves for the outfit across town, and the owner reaches for the non-compete everybody signs at hire. Then they learn what it is worth. Most employee non-competes in the trades are unenforceable, not because courts are hostile to shops but because the clause was written to stop the tech working, and no state protects that interest. The shop's real interest is protectable. It is just not the one the clause describes.

One distinction first. A covenant given by a seller when selling their business is enforced far more readily, because the buyer paid for the goodwill and was compensated for giving it up; those are the acquisition cards in the References. This card is about the covenant given by an employee, usually at hire, usually unread, in exchange for the job itself, which courts treat as a restraint on a person's ability to earn and judge by a stricter test.

This is orientation on how these are judged, not legal advice about the agreement in your drawer. Enforceability is a pure question of your own state's law, with no federal answer to fall back on.

The threshold question is which state, and the spread is total

Void for employees outright. California voids them at Business and Professions Code 16600, and since 1 January 2024 section 16600.5 makes one unenforceable there regardless of where or when it was signed, with a private right of action. The same package added an affirmative duty at 16600.1: employers had to notify in writing, by 14 February 2024, every current and former employee employed since 1 January 2022 whose agreement contains a void non-compete, at the last known address and email. Failing to is unfair competition under section 17200, penalty up to two thousand five hundred dollars per violation, so an out-of-state shop with a California tech has a duty there, not merely a dead clause. North Dakota (N.D. Cent. Code 9-08-06) and Oklahoma (15 Okla. Stat. 219A, which still allows a narrow customer non-solicit) void them broadly, and Minnesota voided new ones at Minn. Stat. 181.988 from 1 July 2023 without disturbing older agreements.

Void below an earnings threshold. Roughly a dozen states now void employee non-competes for workers earning under a statutory figure, Illinois (820 ILCS 90) and Washington among the commonly cited, and those figures step up on schedules written into the statutes. This is the layer most likely to reach a service technician: the thresholds often sit above what a mid-level field tech earns.

Enforceable, but only so far. Everywhere else the test is the same two-part question: does the covenant protect a legitimate business interest, and is it reasonable in duration, geography and scope. Both halves must hold.

The legitimate interest, and why a technician's skill is not one

The interests courts recognise are narrow, and Florida's statute (Fla. Stat. 542.335(1)(b)) is useful because it enumerates them rather than leaving them to case law: trade secrets, other valuable confidential business information, substantial relationships with specific prospective or existing customers, goodwill tied to the business or a location, and extraordinary or specialized training.

Date that one, though. Florida's CHOICE Act (SB 922), effective 1 July 2025, added a second and far stronger regime on top: garden-leave and non-compete agreements up to four years are presumptively enforceable for employees earning more than twice the relevant county's annual mean wage, with a preliminary injunction mandatory on a prima facie showing. Below that line, where most field techs sit, 542.335 still governs.

What is not on anybody's list is the employee's own general knowledge, skill and experience, and neither is ordinary competition. A technician's ability to braze a joint, pull a circuit, size a duct run or read a control board is general trade skill. Some of it was developed on your time, and that does not convert it into your property. A covenant written to stop a tech doing the trade protects nothing a court recognises, which is the mechanical reason most trade non-competes fail: not a technicality, a missing element.

"Extraordinary or specialized training" tempts shops and is narrower than it sounds. Ordinary on-the-job development is not it. A manufacturer certification you paid for, with a documented cost and genuine scarcity, argues better, and argues better still as a training repayment agreement.

Reasonable is measured against the interest, not against your preference

Once an interest exists, the covenant is cut to fit it, and that is the part owners get wrong. Duration, geography and scope are judged against how long, how far and how broadly that interest needs protecting, not against what is convenient.

• Duration is measured against how long it takes to re-establish the relationship that person held: about one visit cycle on a residential maintenance book, longer on a commercial book with multi-year agreements.
• Geography is measured against where the interest lives: where that person worked and the customers they touched, not your whole market.
• Scope is measured against the work they did. A clause barring any employment, in any role, at any competitor has no interest behind it.

Blue pencil, reformation, or the whole thing falls

What happens to an overbroad clause is itself a state question, and it is why drafting broadly is a bet rather than a safety margin.

Overbreadth costs you the excess in the first, the whole covenant in the last. The same clause, the same tech, three outcomes.

Consideration, notice and the procedural traps

A covenant can be substantively fine and still fail on process.

Consideration. In some states continued at-will employment supports a covenant signed after hire; in others it does not. Illinois now answers it by statute rather than contested case law: 820 ILCS 90/20, the same act that carries the earnings threshold, defines adequate consideration as two years of employment after signing or other consideration adequate on its own. A covenant emailed to a five-year tech on a Tuesday with no raise attached is the fact pattern this rule exists for.

Notice, and the exemption that decides most trade cases. Massachusetts legislates process, and the first thing its Noncompetition Agreement Act (M.G.L. c. 149, s. 24L) does is put most of a field crew out of reach: 24L(c)(i) makes a non-compete flatly unenforceable against any employee classified as non-exempt under the FLSA, and 24L(c) also excludes employees aged eighteen or younger and student interns. An hourly tech who earns overtime is non-exempt, so for this card's reader Massachusetts usually lands where California does, by a different route. Where the statute does bite it caps duration at twelve months, requires garden leave or other agreed consideration, the agreement by the earlier of a formal offer or ten business days before the start date, and an express statement of the right to consult counsel; and it does not reach an employee laid off or terminated without cause. That last one is worth noticing everywhere: courts elsewhere frequently weigh a without-cause termination against enforcement anyway.

Enforcement is your bill. A valid covenant does nothing on its own. Enforcing it means a lawsuit and usually a preliminary injunction motion on a fast schedule, and the spend routinely crosses the annual value of the disputed accounts before the first hearing. A clause you will not fund works only on people who never test it.

And the bill can arrive from the other direction. Everything above reads as though you hold the covenant. Half the time you are making the offer to a tech who signed one across town, and hiring someone bound by a competitor's covenant can get you sued for tortious interference with contract. In enforcing states that is the more common of the two suits, because the new employer has money and the tech does not. "We thought it was unenforceable" is not a defence: knowing about the contract and inducing the breach anyway is the tort, and everything this card teaches about how weak these clauses are is the belief that gets a hiring shop sued. Ask the candidate for whatever they signed and read it before the offer, not after.

Worked example: one clause, taken apart term by term

For two years after separation, Employee shall not, directly or indirectly, engage in, own, manage, or be employed by any business providing plumbing, HVAC or related services within 100 miles of any location at which the Company does business.

The shop: residential plumbing, one building, techs working a 25-mile service radius, a maintenance book visited about once a year.

"Two years." The interest is customer goodwill on an annually-visited book. One visit cycle introduces a replacement tech, so one year is arguable and two asks twice what the interest supports.

"Directly or indirectly, engage in, own, manage, or be employed by." This bars the tech from driving a forklift in a competitor's warehouse. No recognised interest is served, and it is a single run-on list a strict blue-pencil court cannot cleanly sever.

"Plumbing, HVAC or related services." The shop does not do HVAC, and "related" is undefined. Scope reaching past the business itself has nothing behind it.

"Within 100 miles of any location at which the Company does business." The shop does business at customers' homes, out to 25 miles from the building, so the outer edge sits 125 miles out. That is 5 times the service radius, and since area scales with the square of the radius, about 25 times the ground the shop covers. A tech inside that circle is barred from the trade across a region, which is what an unreasonable geographic restraint means.

Three outcomes from one clause. A reformation state may cut it to twelve months, plumbing only, in the tech's real territory, and enforce that. A strict blue-pencil state may find nothing it can strike without rewriting. An all-or-nothing state voids it whole, leaving no restriction on a tech a narrow clause would have held. The broad draft did not buy a margin. It bought a coin flip on the map.

The federal layer, honestly stated, and what to do instead

As of this writing in 2026 there is no federal ban. The Federal Trade Commission's April 2024 final rule would have barred most employee non-competes; a federal district court in Texas set it aside nationwide in August 2024, it never took effect, and the Commission dropped its appeals in 2025 for case-by-case enforcement. A 2023 National Labor Relations Board memorandum arguing the same under Section 7 for non-supervisory employees was rescinded in 2025, and that theory is unsettled too. This is the fastest-moving corner of employment law in the country. Date any statement of it, including this one, and have counsel check before you rely on it.

The constructive move is to stop restraining the person and start protecting what you actually own: the customer relationship and the pricing and service history behind it. Different tools, much higher success rate; see the customer-list card in the References.

References

• Fla. Stat. 542.335 (enumerated legitimate business interests and mandatory modification) and the CHOICE Act, Fla. SB 922 (2025); Tex. Bus. & Com. Code 15.51(c); Wis. Stat. 103.465
• Cal. Bus. & Prof. Code 16600, 16600.1 (notice duty) and 16600.5; N.D. Cent. Code 9-08-06; 15 Okla. Stat. 219A; Minn. Stat. 181.988; 820 ILCS 90/20 (adequate consideration); M.G.L. c. 149, s. 24L(c) (non-exempt employees, minors, interns)
• FTC Non-Compete Clause Rule (2024) and its litigation history
• See related: Protecting a Customer List Without a Non-Compete; The Non-Compete and Non-Solicit When Buying a Shop