Sun Tzu wrote that “strategy without tactics is the slowest route to victory.” Non-compete agreements are one such tactic—enabling employers to protect valuable trade secrets and secure a competitive advantage. But cross-border non-competes resemble a chess match more than a duel. Success depends not on brute force but on aligning many moving parts, each capable of shifting the balance of power. This is particularly important as the regulatory environment shifts—both at the federal and state levels.
Before making their first moves, companies should carefully weigh the factors to determine whether employee non-compete agreements—not a sale-of-business non-competes (another post!)—hold up across jurisdictions. This post breaks down three core considerations: (i) scope; (ii) execution; and (iii) enforceability.
Scope
Employers realize that information travels in the age of the internet. The first impulse is to get heavy-handed with the scope of a non-compete agreement. A “worldwide” limitation on working for competitors may seem airtight, but is unlikely to be enforceable. Almost every jurisdiction that allows non-competes places geographic, functional, or customer-based limitations on their enforceability. Generally, it is best practice to limit the scope of non-competition to the area where the employee has material responsibilities. This is often a single metro area, but may be broader in the case of sales territories or remote roles.
Some employers may be rolling their eyes now. After all, a competitive advantage can easily travel via the internet (or a business trip) and have worldwide implications. But as Tip O’Neill quipped, all politics is local. Legislatures and courts are unwilling to allow broad-based restrictions on mobility—they view it as an attack on constituents’ ability to earn a living.
Non-competes can’t be for eternity. Employees working in a particular field must be able to earn a livelihood. Assuming that non-competes are allowed locally (more on that below!), you’ll want to pick an appropriate time period. In many, but not all, jurisdictions this will be 6 months. Some jurisdictions allow longer periods, but with consideration: Germany allows up to 2 years with at least 50% pay (Karenzentschädigung); France at 30-50% of salary; and China for up to 2 years with at least 30% of salary (50% in Shenzhen). The key is to make the period long enough to protect strategic insights, but not long enough that it is a restraint on trade.
Finally, the limits on activities should be appropriate. A restriction on chip design could be acceptable. A limit on working in the technology sector, by contrast, would be overbroad. The key is to scope the clause for protecting trade secrets, not preventing talent mobility. A trade secret is something that (i) is not generally known or readily ascertainable; (ii) is capable of deriving independent economic value; and (iii) is subject to reasonable measures to keep secret. Not every competitive advantage is a trade secret. The test: could the employee reasonably work in their field without touching your specific crown-jewel secrets?
When considering whether to enforce a non-compete clause, courts look to reasonableness. Delaware—generally a business-friendly venue—has moved against blue-penciling overbroad non-competes, even in sophisticated deals. Simply having appropriately narrow geography, a short time period, and a well-defined sector of non-competition is not enough. The clause must be narrowly tailored to what is necessary to protect trade secrets.
Execution & Consideration
Assuming you’ve appropriately scoped a non-compete clause, the question is how you make it enforceable. Requirements—both procedural and substantive—vary widely by jurisdiction. You’ll want to make sure that any non-compete covers (i) any consideration requirements; (ii) is executed in the appropriate way; and (iii) does not override a feasible, less-restrictive mechanism to protect trade secrets.
Execution requirements vary widely by jurisdiction. Some jurisdictions, for example, allow non-competes to be clauses in an employment agreement or offer letter. Others require that the non-compete terms be enumerated separately from the main agreement. The most restrictive mechanism is a completely separate non-compete agreement, which may need to be executed after an employee has already begun employment. This complicates consideration.
Non-competes must generally have consideration—exchange of something of value for not competing. What this something is, however, varies by jurisdiction. Some jurisdictions allow the employee’s salary to function as consideration. Thus, not competing is merely part of the employment package. This only works if the non-compete is signed when employment commences.
For non-competes signed after employment starts, or non-competes in more restrictive jurisdictions, additional consideration is needed. This can come in the form of additional salary, a lump-sum bonus, or a post-employment stipend that runs the non-compete period. In Germany, France and China and elsewhere, post-termination compensation is required. Massachusetts requires “fair and reasonable consideration independent from the continuation of employment…” to enforce non-competes signed after employment starts.
Non-compete agreements may be subject to additional scrutiny when less restrictive mechanisms work equally well. For example, jurisdictions such as the United Kingdom offer garden leave, whereby employees stay home at full pay during the notice period. Garden leave enables employees to earn a livelihood through their existing salaries, while avoiding work with competitors. Courts are generally more favorably disposed to such arrangements because they don’t deprive departing employees of their livelihoods.
Enforcement
With the right execution of the contract and the right terms, it may come time to enforce the non-compete. Choice of law is crucial. Jurisdictions vary widely in their willingness to enforce non-compete terms and in their procedural requirements for enforcement. Given the mobility of workers, there is also a question of which law applies. Assume, for example, that an employee lives in Germany, but has a non-compete governed by Delaware law and the employer seeks enforcement of that non-compete?
Employers have a few options to enhance enforceability. The first is to carefully select venue and governing law. Where arbitration clauses are permissible, specifying arbitration is usually a smart play for employers. Selecting a governing law favorable to the employer—provided there is a contractual nexus—is also smart. Overall, clear statements of governing law and venue help make enforcement much more straightforward.
Employers should be aware of important limitations to enforceability. The FTC’s national ban on non-competes, announced in April 2024, was vacated in 2025 and, on September 5, 2025, the FTC took steps to dismiss its appeal in the Fifth Circuit. Nonetheless, the FTC’s move did signal a broader wariness of non-compete agreements. Washington, D.C., for example, banned non-competes below certain salary thresholds in 2020. No-poach and wage-fixing agreements, related but distinct restraints, have been on the Department of Justice’s radar.
However, employers should know public policy may override even the best-executed non-competes. Courts are often reluctant to enforce onerous terms on local constituents, particularly against out-of-town employers. Local laws, such as California Labor Code § 925, prohibit use of out-of-state law and venue for local employees. Even with well-paid employees, the employer’s bargaining power vis-à-vis the employee is often asymmetric. There may also be issues of personal jurisdiction, service of process, and evidence.
Conclusions
Non-compete agreements offer employers an effective tool for protecting valuable trade secrets and maintaining a competitive advantage. With serious challenges around scope, execution and enforcement, practical value often lies in careful tailoring plus credible, lawful alternatives (non-solicit, confidentiality, garden leave). Before seeking to utilize non-compete clauses, employers should understand the laws affecting non-compete enforceability, both where the employer and the employee are located.
In order to win this competitive chess match, the key is finesse, not brute force.
Disclaimer: This blog is for informational purposes only and does not constitute legal advice. Reading or interacting with this content does not create an attorney–client relationship. You should consult a qualified attorney for advice regarding your specific situation. Mehaffy, PLLC disclaims all liability for actions taken or not taken based on this blog.