When the NDA is also a non-compete
The most consequential clauses in some NDAs aren't about confidentiality at all. They are restrictive covenants — non-competes, non-solicits, non-circumventions — bundled into the confidentiality agreement, often without notice or negotiation, and binding the recipient long after the underlying engagement ends.
These clauses are some of the most legally consequential and least uniform parts of any NDA. Enforceability varies sharply by state. Federal regulators have spent years circling the question of whether non-competes should be preempted entirely. State legislatures continue to revise the rules, often annually. The result is a body of law where the same clause is fully enforceable in Texas, partially enforceable in Colorado above an income threshold, and void in California regardless of where it was signed.
The bundling matters because restrictive covenants buried in an NDA escape the scrutiny they would receive in a standalone non-compete agreement. A separate non-compete agreement is a negotiation. The same language inside an NDA is often signed as part of routine paperwork, with the recipient unaware that they're agreeing to anything beyond confidentiality.
The current state of non-compete law
Five U.S. jurisdictions broadly prohibit employee non-competes: California, North Dakota, Oklahoma, Minnesota, and (for IT/software workers) Hawaii. California's Bus. & Prof. Code § 16600 applies regardless of where the agreement was signed if the employment relationship has a California connection. Several more states severely restrict non-competes (Colorado, Washington, Massachusetts, Maine, Illinois, Oregon, Nevada, Maryland, Rhode Island, Virginia, Washington D.C.), typically through income thresholds, notice requirements, or scope restrictions.
Most other states apply a reasonableness test — non-competes must be reasonable in geography, duration, and scope, and supported by adequate consideration. Texas, Florida, and Georgia generally enforce non-competes meeting their statutory tests. New York, Pennsylvania, and Massachusetts (above their thresholds) apply more recipient-friendly reasonableness analysis.
Non-solicits face less hostile treatment but increasing scrutiny. Customer non-solicits are generally enforceable in most states. Employee non-solicits (no-poaching agreements) have drawn antitrust attention from the Department of Justice in recent years and face uncertain enforceability in some jurisdictions. Both can effectively prevent post-employment business development even where explicit non-competes would be void.
Two patterns deserve particular attention. Garden leave provisions — paid notice periods during which the employee cannot work — function as de-facto non-competes in jurisdictions where explicit non-competes are void. Non-circumvention clauses prohibit the recipient from dealing with any party introduced through the disclosure, which can be extremely broad and is rarely the focus of recipient attention.
What this looks like in real contracts
State-by-state enforceability
Non-compete enforceability is among the most jurisdictionally variable areas of U.S. contract law. Key 2026 positions:
FTC Non-Compete Rule status: The FTC's 2024 rule banning most employee non-competes faced legal challenge and remains in litigation as of 2026. State-level restrictions continue to operate regardless of the federal status. The current patchwork is the operating reality.
Why this category gets the most NDASentry attention
Of the ten categories in this taxonomy, non-solicit and non-compete provisions are the ones most likely to be both consequential and missed during contract review. A perpetual confidentiality clause is at least visibly labeled 'confidentiality.' A garden leave provision is buried in compensation language. A non-circumvention clause looks like boilerplate about not interfering with business relationships. Recipients regularly sign these without recognizing that they are agreeing to restrictions on future employment.
Five separate patterns appear under this category in the NDASentry scoring pipeline because the variation is wide and each pattern has different enforceability characteristics. An employee non-solicit might be enforceable while a co-located customer non-solicit is unenforceable. A garden leave provision might be permissible while an explicit non-compete in the same agreement is void. The patterns are scored separately because the legal answers differ.
What NDASentry flags in this category
10.1 Non-compete bundled into an NDA
Explicit non-compete language inside what is labeled as a confidentiality agreement. Often signed without negotiation because the document looks like a routine NDA. Enforceability varies sharply by jurisdiction: void in California regardless of where signed, restricted in Colorado above income thresholds, enforceable in Texas and Florida under reasonableness tests.
10.2 Employee non-solicitation
Restriction on hiring or soliciting the disclosing party's employees. Generally enforceable in most jurisdictions with reasonable scope and duration, though employee no-poaching agreements have drawn Department of Justice antitrust scrutiny. Affects post-deal hiring and can extend years beyond the engagement.
10.3 Customer non-solicitation
Restriction on doing business with the disclosing party's customers. Generally more enforceable than non-competes because narrower in scope. Can effectively prevent post-deal business development in concentrated industries where most relevant customers are the disclosing party's existing customers.
10.4 Garden leave or paid-notice provisions
Paid notice periods during which the employee cannot work for competitors. Function as de-facto non-competes in jurisdictions where explicit non-competes are void or restricted. Increasingly common in financial services, executive employment, and other contexts where retention of key personnel is critical.
10.5 Non-circumvention clause
Restriction on dealing with any party introduced through the disclosure. Extremely broad in scope — can prevent legitimate business development with any party the recipient learned of during the engagement, for years. Often appears in M&A NDAs, finder agreements, and broker arrangements.
We are scoring a corpus of public NDAs to publish prevalence data for each pattern in this taxonomy. The findings — including what percentage of real NDAs contain the patterns above, broken down by industry and jurisdiction — will appear here when the study is complete.