Nebraska Non-Compete Laws (2026): Are Non-Competes Enforceable?

Nebraska enforces an employee non-compete only if it is reasonable, and its courts read "reasonable" narrowly. No Nebraska statute sets the general rule; it comes from Nebraska Supreme Court decisions, most recently restated in Unlimited Opportunity, Inc. v. Waadah, 290 Neb. 629 (2015). Under that test, a covenant must not injure the public, must be no broader than reasonably necessary to protect a legitimate business interest, and must not be unduly harsh on the worker.

Two features set Nebraska apart. Courts generally uphold employee restrictions only when they are limited to customers the employee actually dealt with, and a court will not trim an overbroad covenant to save it: the whole covenant fails. Separately, a 2026 law bars non-competes in health care staffing agency contracts starting July 1, 2027. For how other states compare, see our non-compete laws by state guide.

Information last verified on 2026-10-08. This article has not been reviewed by a licensed lawyer.

Jurisdiction scope: This article covers Nebraska's common-law rule on covenants not to compete as stated by the Nebraska Supreme Court, and the health care staffing agency provision of LB 921 (2026), with a short note on the federal FTC rule. It does not cover trade-secret claims (see Nebraska trade secret laws) or severance agreements (see Nebraska severance pay laws).

Are non-competes enforceable in Nebraska?

Yes, if they pass a reasonableness test, and many do not. Nebraska courts treat a covenant not to compete as a "partial restraint of trade" and apply three requirements. In Waadah, the Nebraska Supreme Court put it this way:

"a partial restraint of trade such as a covenant not to compete must meet three general requirements to be valid. First, the restriction must be reasonable in the sense that it is not injurious to the public. Second, ... no greater than reasonably necessary to protect the employer in some legitimate business interest. Third, ... not unduly harsh and oppressive on the party against whom it is asserted."

Waadah arose from a franchise agreement, which the court treated as closer to the sale of a business, but the court said the three-part test applies regardless of the context. It also noted that Nebraska courts are more willing to enforce a covenant given on the sale of a business than one in an employment agreement.

Our research found no Nebraska statute governing ordinary employee non-competes. That finding rests on a keyword search of the Legislature's 2025-2026 bills and on the Nebraska Supreme Court's own description of the rule as common law; a narrow occupational statute could still exist outside what we searched.

What Nebraska employers can protect

The employer's legitimate business interest is the heart of a Nebraska case, and the courts define it tightly. In Gaver v. Schneider's O.K. Tire Co., 289 Neb. 491, 856 N.W.2d 121 (2014), a case about an employee's covenant, the Nebraska Supreme Court restated that an employer has a legitimate interest in protection against unfair competition by a former employee but is not entitled to protection against ordinary competition. Restrictions on competition are strictly construed.

The court said the same thing in Aon Consulting v. Midlands Financial Benefits (Neb. 2008):

"An employer has a legitimate business interest in protection against a former employee's competition by improper and unfair means, but is not entitled to protection against ordinary competition from a former employee."

The personal-contact rule for customer restrictions

In practice, that interest usually means the customer goodwill an employee built on the employer's behalf. In Professional Business Services Co. v. Rosno (Neb. 2004), the Nebraska Supreme Court restated a rule from Polly v. Ray D. Hilderman & Co., 225 Neb. 662, 407 N.W.2d 751 (1987): an employment covenant "may be valid only if it restricts the former employee from working for or soliciting the former employer's clients or accounts with whom the former employee actually did business and has personal contact." A covenant that reaches every client of the employer, whether or not the employee dealt with them, is broader than reasonably necessary under that rule.

Time and territory

No Nebraska statute caps how long a covenant may last or how far it may reach; courts decide each case. Waadah gives two reference points. It held that a restriction covering every territory where a multinational franchisor operates was "similar to having no territorial restriction at all" and unreasonable, and it described an earlier case in which a one-year restriction within 45 miles, covering one tax season, was held reasonable.

What a Nebraska court does with an overbroad non-compete

It throws the covenant out rather than fixing it. Nebraska takes this position firmly:

"This court has long held that it is not the function of the courts to reform a covenant not to compete in order to make it enforceable. ... we must either enforce [a covenant] as written or not enforce it at all." Unlimited Opportunity, Inc. v. Waadah, 290 Neb. 629 (2015)

In Waadah, the agreement contained a one-year restriction covering the franchisor's entire system and a two-year restriction. The court refused to separate the one-year restriction from the rest and held the whole covenant unenforceable.

Drafting cannot get around this rule. In CAE Vanguard, Inc. v. Newman, 246 Neb. 334 (1994), a sale-of-stock case, the court held that a contract clause authorizing a court to narrow the covenant had no effect: "Private parties may not confer upon the court powers which it does not possess." It went on: "Because we find that the covenant is not subject to modification, we must either enforce it as written or not enforce it at all."

Health care staffing agencies: LB 921 (2026)

Nebraska's one statutory non-compete ban is narrow. LB 921, the Health Care Staffing Agency Registration Act, passed on Final Reading 37-12 on April 10, 2026 and was approved by the Governor on April 14, 2026. Section 11 of the act provides:

"A health care staffing agency shall not: (a) Include in any contract with a worker or a health care entity a noncompete clause restricting in any manner the employment opportunities of a worker; ... (2) Any clause of a contract that violates this section is void."

Key points about LB 921:

The act protects a "worker," defined as someone a staffing agency places to provide direct services such as nursing services; its definition of direct services excludes the practice of medicine by a licensed physician and the practice of nursing by a nurse practitioner. The Commissioner of Labor may impose a civil penalty of up to $500 for a first offense and $5,000 for each later offense, or revoke the agency's registration for up to one year.

The act also limits liquidated damages and conversion fees an agency can charge when a worker is hired by the facility, except as the act allows. The permitted exceptions include a payment that reduces pro rata to zero over no more than 720 hours of service, and a foreign worker whom the agency helped obtain US work authorization and who is assigned to a single entity for an initial term of at least 24 months. LB 921 also absorbed an earlier stand-alone staffing bill, LB 308, which was indefinitely postponed on April 17, 2026.

The act's section numbers above are session-law numbers; the codified Revised Statutes numbers had not been assigned in the sources we checked.

Fired or quit: does it matter in Nebraska?

Our research found no Nebraska statute or Nebraska Supreme Court decision adopting a special rule for employees who are fired or laid off, so this page states none. The three-part reasonableness test applies whatever the reason for the departure, as far as the decisions we read show. For Nebraska's general rule on ending employment, see Nebraska at-will employment laws.

Non-solicits, confidentiality agreements and trade secrets

Customer non-solicitation covenants face the same reasonableness test. In Aon, the court upheld a two-year non-solicitation covenant limited to customers the employee had personally handled, serviced or solicited in the prior two years, because it protected goodwill and did not bar ordinary competition. Our research did not establish Nebraska rules for employee no-poach clauses or confidentiality agreements.

Trade-secret law protects an employer's confidential information whether or not a non-compete exists; see Nebraska trade secret laws.

The FTC rule and Nebraska non-competes

The FTC's 2024 rule banning most non-competes never took effect. A federal court in Texas set it aside on August 20, 2024 (Ryan, LLC v. FTC, No. 3:24-CV-00986-E, N.D. Tex.); the FTC voted on September 5, 2025 to drop its appeals and removed the rule from the Code of Federal Regulations on February 12, 2026. The agency still brings cases against individual employers, including a final order approved June 22, 2026 that requires a pest-control company to stop enforcing its non-competes. Background: FTC non-compete ban struck down.

What this page does not answer

Our research did not establish Nebraska rules on the following, so this page states none:

• whether continued at-will employment is enough consideration for a covenant signed mid-job;
• whether being fired or laid off affects enforcement;
• whether a Nebraska court will honor an out-of-state choice-of-law or forum clause;
• any profession-specific rule for physicians, directly employed nurses or lawyers;
• any statutory remedy for an employee whose employer tries to enforce an unenforceable covenant.

If you have been asked to sign, or are being held to one

Under Nebraska law the key questions are whether the restriction protects against unfair competition rather than ordinary competition, whether any customer restriction is limited to customers you personally dealt with, whether the time and territory are tied to that interest, and, because courts will not trim a covenant, whether any single part of it is too broad. A lawyer licensed in Nebraska can review a specific agreement against those points.

Related

• Non-compete laws by state
• Nebraska trade secret laws
• Nebraska severance pay laws
• Nebraska at-will employment laws

Disclaimer: This article provides general legal information about Nebraska non-compete law under Nebraska Supreme Court decisions and LB 921 (2026), not legal advice. The information was last verified on 2026-10-08. Nebraska non-compete disputes are decided by the courts, and the Commissioner of Labor oversees the health care staffing agency rules from July 1, 2027; for advice about a specific agreement, contact a legal aid office or a lawyer licensed in Nebraska.

Last updated: 2026-10-08.

Frequently Asked Questions

Are non-competes enforceable in Nebraska?

Only if reasonable. Under Unlimited Opportunity, Inc. v. Waadah (2015), a covenant must not injure the public, must be no greater than reasonably necessary to protect the employer's legitimate business interest, and must not be unduly harsh and oppressive on the person restrained.

Will a Nebraska court fix an overbroad non-compete?

No. The Nebraska Supreme Court has held that it is not the function of the courts to reform a covenant not to compete; a court enforces it as written or not at all (Waadah, 2015; CAE Vanguard, 1994).

Can a Nebraska non-compete stop me from working for any competitor?

The Nebraska Supreme Court has said an employer is not entitled to protection against ordinary competition from a former employee, and employee restrictions have been upheld when limited to customers the employee actually dealt with personally (Rosno, 2004, quoting Polly v. Ray D. Hilderman and Co., 1987).

Are customer non-solicitation agreements enforceable in Nebraska?

They are judged by the same reasonableness test. In Aon Consulting v. Midlands Financial Benefits (2008), the court upheld a two-year non-solicitation covenant limited to customers the employee had personally handled in the prior two years.

Did Nebraska ban non-competes in 2026?

Only for health care staffing agencies. LB 921, approved April 14, 2026, bars those agencies from using non-compete clauses in contracts with workers or health care entities starting July 1, 2027.

Does Nebraska ban non-competes for nurses?

Not generally. LB 921 covers contracts made by health care staffing agencies starting July 1, 2027; it does not apply to hospitals or clinics that employ nurses directly, and the act's definition of covered direct services excludes the practice of nursing by a nurse practitioner.

Does the FTC non-compete ban apply in Nebraska?

No. A federal court set the FTC rule aside on August 20, 2024, and the FTC removed it from the Code of Federal Regulations on February 12, 2026.