Non-Compete & Non-Solicitation Agreements
Contract provisions restricting a departing employee from competing against their former employer, a non-compete, or from poaching its clients or remaining employees, a non-solicitation agreement, for a defined period after leaving. Enforceability varies significantly by state, and some states heavily restrict or ban non-competes outright.
Why it matters
A signed non-compete isn't automatically enforceable just because the employee agreed to it, whether it actually holds up depends entirely on which state's law applies, and that landscape has been shifting as more states restrict these agreements.
On a real project
A project manager leaves a construction firm and joins a direct competitor, and whether the former employer's non-compete can actually stop that move depends on the specific state's current restrictions on enforcing non-competes, not just on the fact that the employee signed one.
Who this matters most to
An HR Manager has to know which agreements are actually enforceable in the states the company operates in, rather than relying on a template signed once regardless of jurisdiction.
Where this goes wrong
A departing estimator doesn't sign anything competing directly, but quietly reaches out to several former colleagues and a longtime client within weeks of leaving. The former employer discovers the non-solicitation agreement was never actually included in that estimator's original employment contract, leaving no real basis to stop the poaching despite the obvious intent behind it.