The boilerplate problem

A lot of small employers hand every new hire the same offer packet they've used for years, and tucked inside is a broad non-compete: don't work for a competitor for two years, anywhere, in any capacity. It feels like protection. Increasingly, it isn't. The legal ground under restrictive covenants has shifted hard — some states refuse to enforce non-competes at all, others void them below a salary threshold, and federal regulators have moved to restrict them broadly. A covenant that's unenforceable where your employee works is worse than no covenant: it gives a false sense of security, can deter good candidates, and in some states exposes you to penalties just for presenting it.

This is general HR guidance, not legal advice, and this is a genuinely fast-moving, state-specific area — the enforceability of what you're about to ask a candidate to sign is exactly the kind of question to run past counsel for your states. What follows is how to think about the toolkit so that review is productive.

The four covenants, from weakest to strongest

"Restrictive covenant" is an umbrella over several different promises, and they are not equally enforceable:

  • Non-compete — promises the employee won't work for competitors for a period after leaving. The most aggressive and least enforceable; the one states restrict and void most often.
  • Non-solicitation of customers — promises they won't poach the clients they served. Generally more enforceable than a non-compete because it's narrower and tied to a real interest.
  • Non-solicitation of employees — promises they won't recruit your team away. Often enforceable when reasonable.
  • Confidentiality / trade-secret protection — promises they won't take or use your confidential information. The most durable of the set, and the one you should rely on most, because protecting genuine trade secrets is a recognized interest almost everywhere.

The strategic shift for most employers is to stop leaning on the broad non-compete and lean instead on the narrower, more durable tools — confidentiality and customer non-solicitation — that actually protect the underlying interest and survive a challenge.

Why broad non-competes keep failing

Even in states that allow non-competes, courts enforce only what's reasonable, and boilerplate usually isn't. A covenant is tested on:

  • Legitimate interest — are you protecting real trade secrets and customer relationships, or just trying to prevent ordinary competition? Only the former counts.
  • Geographic scope — "anywhere in the country" for a regional role rarely survives.
  • Duration — a few months to a year is far easier to defend than two-plus years.
  • The employee's role — a covenant that makes sense for a senior engineer with deep IP access is absurd applied to an entry-level hourly worker, and several states now ban non-competes for lower-wage employees outright.

The pattern: courts strike the overbroad ones, and in some states an unreasonable covenant is void rather than narrowed. Drafting wide "to be safe" is the opposite of safe.

Hiring into a covenant the candidate already signed

The mirror-image risk: you're hiring someone who's still bound by a covenant from their last employer. This is a real exposure for the hiring company — knowingly bringing someone in to do work their existing agreement prohibits can draw a tortious-interference claim from their former employer. Practical hygiene during hiring:

  • Ask candidates whether they're subject to any restrictive covenants, ideally early, and get a copy if so.
  • Don't ask them to bring or use their former employer's confidential information or client lists — ever. That instinct to "hit the ground running" with old materials is how a routine hire becomes litigation.
  • Confirm in your offer that they won't use anyone else's trade secrets and aren't violating an existing agreement by joining.

This belongs in the same pre-offer diligence as your reference checks and offer letter — a quick question that prevents an expensive surprise.

What to actually put in the offer packet

For most small employers, the defensible package is narrower than the old boilerplate and built to survive scrutiny:

  • A confidentiality / trade-secret agreement — the workhorse, enforceable almost everywhere.
  • A reasonable customer non-solicitation clause for roles that own client relationships, scoped to the clients they actually touched.
  • An invention-assignment clause for anyone creating IP, written to your state's rules.
  • A non-compete only where it's both enforceable and genuinely warranted — senior, IP-heavy roles, scoped tightly in time and geography, and only above any salary threshold your state sets. For a lot of hires, the right amount of non-compete is none.

Standardize this into your offer letter flow so the covenants a given role gets are deliberate and role-appropriate, not a one-size-fits-all clause copied onto every hire regardless of whether it would hold.

The bottom line

Restrictive covenants still matter, but the broad non-compete is the weakest tool in the kit and the one most likely to be unenforceable, restricted, or outright banned where your people work. Lean on confidentiality and reasonable, narrowly-scoped non-solicitation — the parts that protect a real interest and survive a challenge — and reserve non-competes for the few senior, IP-heavy roles where they're both warranted and lawful. On the inbound side, diligence whether a candidate is already bound and never let a new hire bring a former employer's secrets in the door. Build the right covenants into the offer by role rather than papering everyone with the same clause, confirm enforceability for your states with counsel, and you protect what's actually protectable instead of holding a piece of paper a court would tear up.