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North Carolina Non-Compete Agreement Template

North Carolina courts follow a strict blue-pencil rule, striking distinctly separable overbroad provisions but never rewriting them, so one sloppy clause can sink the whole covenant. Your agreement must be written, signed by the person bound, part of an employment contract and backed by valuable consideration, with time and territory that are reasonable when weighed together.

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North Carolina rules to know

  • Writing and signature required

    A non-compete must be in writing and signed by the person bound. It must also be part of an employment contract, reasonable in time and territory, based on valuable consideration, and designed to protect a legitimate business interest.

    N.C. Gen. Stat. 75-4

  • Existing employees need something new

    A non-compete signed at hire is supported by the job offer. If an existing employee signs one, continued employment alone is generally not enough; they must receive new consideration such as a raise, promotion or bonus.

    North Carolina case law (e.g., Kadis v. Britt, 224 N.C. 154 (1944))

  • Courts strike but never rewrite

    North Carolina follows a strict blue-pencil rule: a court may strike a distinctly separable overbroad provision but cannot rewrite or narrow it. If the remaining terms do not stand alone, the whole covenant may fail, so draft conservatively.

    Beverage Systems of the Carolinas, LLC v. Associated Beverage Repair, LLC, 368 N.C. 693 (2016)

  • Time and area are weighed together

    Courts weigh duration and geography together, and look-back periods (such as customers served in the last two years) add to the total time. Restrictions tied to customers the employee actually served are more likely to be upheld than broad territorial bans.

    North Carolina case law

Last updated 2026-10-05

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What a non-compete agreement covers

  • Restricted activities and competitors
  • Duration and geographic scope
  • Non-solicitation of customers and employees
  • Consideration given for the restriction
  • Remedies and reformation
  • Governing law and venue

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Frequently asked questions

What happens if part of a North Carolina non-compete is too broad?
A North Carolina court may strike a distinctly separable overbroad provision, but it cannot rewrite or narrow it. If the remaining terms don't stand alone, the entire covenant may fail. Drafting conservatively, with separate clauses for different restrictions, gives the agreement a better chance of surviving review.
Do look-back periods count toward a North Carolina non-compete's length?
Yes. North Carolina courts weigh duration and geography together, and look-back periods, such as covering customers served in the last two years, add to the total time. Restrictions tied to customers the employee actually served are more likely to be upheld than broad territorial bans.
Can I ask an existing North Carolina employee to sign a non-compete?
You can, but continued employment alone is generally not enough consideration. The employee must receive something new, such as a raise, promotion or bonus, while a non-compete signed at hire is supported by the job offer itself. In either case, it must be in writing and signed by the employee.
Are non-competes enforceable?
It depends heavily on the state. A few states ban most employee non-competes outright, others cap them by salary, duration or industry, and many enforce only restrictions that are reasonable in time, area and scope.
What's the difference between a non-compete and a non-solicit?
A non-compete stops someone working for a competitor or starting a competing business. A non-solicit only stops them from poaching your customers or staff. Non-solicits are enforceable in more places, but not everywhere.
Can I use a non-compete when selling my business?
Usually yes. Sale-of-business non-competes are treated much more favourably than employee ones, even in states that otherwise ban non-competes.

Non-Compete Agreement in other states

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