What makes a non-compete unenforceable?

Counteroffer · Answers · non-compete Source: https://trycounteroffer.com/answers/what-makes-non-compete-unenforceable

Short answer: Non-competes become unenforceable through any of: (1) state-law void rules (CA, ND, OK, MN); (2) salary thresholds not met (WA, IL, CO, OR, DC); (3) overbroad scope on duration, geography, or activity; (4) insufficient consideration (mid-employment signing without new compensation); (5) procedural defects (missing notice, missing right-to-counsel statement, failure to satisfy state-specific requirements); (6) lack of legitimate business interest; (7) material employer breach; (8) industry-specific bars (attorneys, physicians, certain broadcasters).

State-law void rules

Some states broadly void employee non-competes regardless of any other factor:

California: Cal. Bus. & Prof. Code § 16600 (and 2024 amendments SB 699 and AB 1076)
North Dakota: N.D. Cent. Code § 9-08-06
Oklahoma: Okla. Stat. tit. 15, §§ 217-219
Minnesota (agreements signed July 1, 2023 or later): Minn. Stat. § 181.988

In these states, the non-compete is unenforceable as a matter of state policy. The agreement may exist on paper but cannot be enforced against an employee.

California's 2024 amendments extended this to apply regardless of where the agreement was signed, as long as the employee works in California.

Salary thresholds

Several states make non-competes unenforceable below specified salary thresholds:

State	2024 threshold	Notes
Washington	$116,594.17	Indexed annually
Colorado	$124,500	Indexed annually
Oregon	~$108,575	Tied to median family income
Illinois	$75,000	Steps up to $90K by 2037
DC	$150,000	$250K for medical specialists

Below the threshold, the non-compete is unenforceable regardless of other factors.

Earnings include base salary plus earned commissions and bonuses, computed on annualized basis from W-2 reported income.

Scope overreach

In states where non-competes can be enforced, the scope must be reasonable. Common scope failures:

Duration overreach. More than 12 months is heavily scrutinized; more than 18-24 months is rarely enforced for ordinary employees. Massachusetts caps at 12 months by statute; Washington at 18 months.

Geographic overreach. Restrictions broader than the employer's actual market or the employee's actual territory typically fail. "Worldwide" or "all of North America" for a regional sales role is presumptively overbroad.

Activity overreach. Restrictions on employment in the industry generally, vs specific competitive activity, often fail. "Cannot work in any capacity at a competitor" is broader than "cannot solicit former customers using confidential information."

Overbroad agreements may be blue-penciled (narrowed) or voided entirely depending on state law and severability language.

Consideration failures

Non-competes require consideration: something the employee received in exchange for signing.

At hire: The job offer itself is sufficient.
Mid-employment: Many states require additional consideration beyond continued employment. Illinois (Fifield rule), Pennsylvania, Washington, and others require specific new compensation, equity, or promotion.
Continued employment alone: Generally insufficient in several states.

If you signed mid-employment without receiving new compensation, equity, or promotion specifically tied to signing, the non-compete may be void for lack of consideration.

Procedural defects

Several states require specific procedures for non-compete enforceability:

Massachusetts (G.L. c. 149 § 24L): 10-business-day notice, right to counsel statement, garden leave or other specified consideration
Illinois (820 ILCS 90): 14-day notice, right to counsel statement
Washington (RCW 49.62): Notice at offer of employment, additional consideration mid-employment
Oregon (ORS 653.295): Notice 2 weeks before start date

Procedural defects often void otherwise compliant agreements. A non-compete that's substantively reasonable but missing the right-to-counsel statement is unenforceable in MA and IL.

No legitimate business interest

Even where state law allows non-competes, the employer must have a legitimate business interest to enforce:

Trade secrets (specifically identifiable proprietary information)
Confidential customer information (specific customer relationships)
Specialized training the employer invested in
Customer goodwill developed using employer resources

Generic competitive concern, general industry knowledge, or fear of losing employees to competition do not qualify as legitimate interests.

If the employer cannot articulate and demonstrate a specific protectable interest, the non-compete fails.

Industry-specific bars

Some industries are protected from non-competes regardless of state law:

Attorneys: ABA Model Rule 5.6 and state equivalents prohibit attorney non-competes
Physicians: Many states limit physician non-competes (MA bans them entirely; CT, RI, IN, FL have specific rules)
Broadcasters: NY and a few other states have specific broadcaster non-compete bans
Healthcare workers in several states: Specific carve-outs in state law

If you're in one of these industries, state-specific rules may void the non-compete regardless of general state law.

What to do next

If you want a delivered analysis identifying every basis on which your specific non-compete may be unenforceable, we deliver one in 24 hours for $199. See Non-Compete Review.

Get your contract reviewed

If you want a delivered review of your specific document with cited authority and counter language, see https://trycounteroffer.com/non-compete.

Last updated: Sun May 31 2026 00:00:00 GMT+0000 (Coordinated Universal Time)

Counteroffer is a contract analysis service, not a law firm. This page is informational, not legal advice.