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

North Carolina enforces employee non-competes only when they pass a five-part test that comes from court decisions, not from a non-compete statute. Under Hartman v. W.H. Odell & Associates, Inc., 117 N.C. App. 307 (1994), the covenant must be in writing, reasonable as to time and territory, part of the employment contract, based on valuable consideration, and designed to protect a legitimate business interest of the employer. A separate statute, N.C. Gen. Stat. 75-4, requires the agreement to be signed by the person who agrees not to compete.

North Carolina courts also refuse to rewrite an overbroad covenant. For how other states treat these agreements, 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 North Carolina's court-made test for employee non-compete agreements and the signed-writing rule in N.C. Gen. Stat. 75-4, with a short note on the federal FTC rule. It does not cover trade-secret claims (see North Carolina trade secret laws), severance pay (see North Carolina severance pay laws), or covenants made in the sale of a business.

Are non-competes enforceable in North Carolina?

They can be, if they meet every element of the test the North Carolina Court of Appeals stated in Hartman:

"To be enforceable a covenant not to compete must be: (1) in writing; (2) reasonable as to time and territory; (3) made a part of the employment contract; (4) based on valuable consideration; and (5) designed to protect a legitimate business interest of the employer" Hartman v. W.H. Odell & Associates, Inc., 117 N.C. App. 307 (1994)

The Court of Appeals restated the same five elements in Medical Staffing Network, Inc. v. Ridgway, 194 N.C. App. 649 (2009). Hartman also placed the burden of proving that the covenant is reasonable on the party seeking to enforce it, which is usually the employer.

The test is court-made. Our search of the North Carolina General Statutes in our statute library, for terms including "covenant not to compete," "restrictive covenant" and "restraint of trade contract," turned up only sections 75-1, 75-2 and 75-4 of Chapter 75 as relevant, and none of them sets a substantive test for employee non-competes. A keyword search is not a reading of the whole code, so treat that as what we found, not a guarantee that no other statute exists.

The signed-writing rule in G.S. 75-4

North Carolina adds a statutory formality on top of the case-law test. N.C. Gen. Stat. 75-4 provides, in part:

"No contract or agreement hereafter made, limiting the rights of any person to do business anywhere in the State of North Carolina shall be enforceable unless such agreement is in writing duly signed by the party who agrees not to enter into any such business within such territory"

We confirmed this text against the General Assembly's official copy of G.S. 75-4 on October 9, 2026. The section dates from 1913, and its history note lists no later amendment.

Signing a non-compete after you start work

Timing matters in North Carolina. A covenant presented to someone who already works for the employer needs something new in return.

In Hejl v. Hood, Hargett & Associates, Inc., 196 N.C. App. 299 (2009), the Court of Appeals held that when a restrictive covenant is entered into after an employment relationship already exists, it must be supported by new consideration, and that consideration cannot be illusory. The court's examples include continued employment for a stipulated period of time, a raise or bonus, a promotion, or additional training.

The rule is old. Hejl traced it to Kadis v. Britt, 224 N.C. 154 (1944), where the North Carolina Supreme Court addressed a covenant exacted from an employee who had already worked for the employer for years, in the same position and with the same duties.

How courts judge time and territory

North Carolina has no statutory maximum length or distance for a non-compete that we found. Courts weigh both under the reasonableness element of the Hartman test, together with whether the covenant protects a legitimate business interest.

Courts also look past the stated term to the restriction's real reach. In Farr Associates, Inc. v. Baskin, 138 N.C. App. 276 (2000), the restriction ran three years after employment ended and also included a two-year look-back period. The Court of Appeals counted both: "The real time restriction of the non-compete agreement is therefore five years."

What a court does with an overbroad non-compete

North Carolina follows a strict "blue pencil" approach. A court may strike a distinctly separable part of a covenant, but it will not rewrite the terms. The North Carolina Supreme Court put it this way in Whittaker General Medical Corp. v. Daniel, 324 N.C. 523 (1989):

"The courts will not rewrite a contract if it is too broad but will simply not enforce it"

Whittaker also explained that when a covenant is separable and one part is reasonable, the reasonable part may be enforced.

The Supreme Court applied that rule even to a contract that invited the court to fix it. In Beverage Systems of the Carolinas, LLC v. Associated Beverage Repair, LLC, 368 N.C. 693 (2016), a covenant signed as part of the purchase of two businesses had an overbroad territory, and the agreement allowed a court to revise it. The Court held that "parties cannot contract to give a court power that it does not have," reversed the Court of Appeals, and stated: "We agree that the trial court correctly refused to amend the covenant."

The practical result is that an overbroad North Carolina covenant is not cut down to a reasonable size by the court. It is enforced only to the extent a separable, reasonable part survives on its own.

Income thresholds, professions and other rules

We did not find an income or job-classification threshold for non-competes in G.S. 75-4 or in the court opinions we read. That is a limited finding: it does not rest on a search of the whole code. House Bill 269, described below, would add a pay threshold, but it has not passed.

We found no enacted North Carolina statute that bans non-competes for physicians or other health care workers. Senate Bill 978, described below, would do so for certain hospital-employed clinicians, but it has not passed. This page also does not cover the professional-conduct rules that apply to lawyers' agreements.

Out-of-state forum clauses are covered by a separate statute. Under N.C. Gen. Stat. 22B-3, a clause in a contract entered into in North Carolina that requires a lawsuit or arbitration arising from the contract to be brought in another state is void and unenforceable, unless all parties consent to the out-of-state forum when the dispute arises.

Questions this page does not answer yet

Our research did not verify North Carolina rules on the following, so this page does not state a rule on any of them:

• whether being fired or laid off affects a non-compete;
• whether a court will apply another state's law under a choice-of-law clause;
• separate rules for customer non-solicitation and confidentiality agreements;
• whether any state agency handles non-compete complaints, or whether these disputes go only to the courts.

If one of these questions matters to your situation, a lawyer licensed in North Carolina can answer it for your agreement. For how at-will employment works in the state, see North Carolina at-will employment laws.

Pending North Carolina legislation

No bill changing North Carolina non-compete law had been enacted as of October 9, 2026, according to the General Assembly's bill pages. Three 2025-2026 bills were pending:

• House Bill 269 (Workforce Freedom and Protection Act) would bar non-compete agreements with employees paid less than $75,000 a year. Its last action was a committee referral on March 5, 2025.
• Senate Bill 978 (Healthcare Competition Reforms) would bar non-compete clauses in the employment contracts of physicians, physician assistants, advanced practice registered nurses and registered nurses employed by a hospital. Its last action was a re-referral to the Senate Appropriations/Base Budget committee on June 16, 2026.
• Senate Bill 673 contained a similar hospital provision. Its last action was a referral to the Senate Rules committee on March 26, 2025.

None of these bills is law.

The FTC rule and North Carolina non-competes

The FTC's nationwide non-compete rule 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 dismiss its appeals, and the FTC removed the rule from the Code of Federal Regulations on February 12, 2026. The FTC still acts case by case, for example approving a final order on June 22, 2026 that required a pest-control company to stop enforcing non-competes. More detail: FTC non-compete ban struck down and our non-compete laws by state guide.

Non-competes and trade secrets

A non-compete is a contract; trade-secret protection is a separate body of law that does not depend on one. See North Carolina trade secret laws.

If you have been asked to sign

In North Carolina, whether a particular covenant holds up turns on the five Hartman elements: a signed writing, reasonable time and territory, a place in the employment contract, real consideration (new consideration if you are already employed), and a legitimate business interest. Because courts will not rewrite an overbroad covenant, the exact wording matters. A lawyer licensed in North Carolina can review a specific agreement against those elements.

Related

• Non-compete laws by state
• North Carolina trade secret laws
• North Carolina severance pay laws
• North Carolina at-will employment laws
• FTC non-compete ban struck down

Disclaimer: This article provides general legal information about North Carolina non-compete law, including the five-part test in Hartman v. W.H. Odell & Associates, Inc. and the signed-writing rule in N.C. Gen. Stat. 75-4, not legal advice. The information was last verified on 2026-10-08. North Carolina non-compete disputes are decided by the courts; for advice about a specific agreement, contact a legal aid office or a lawyer licensed in North Carolina.

Last updated: 2026-10-08.

Frequently Asked Questions

Are non-competes enforceable in North Carolina?

They can be. Under Hartman v. W.H. Odell & Associates, Inc. (1994), a non-compete must be in writing, reasonable as to time and territory, part of the employment contract, based on valuable consideration, and designed to protect a legitimate business interest of the employer.

Does a North Carolina non-compete have to be signed?

Yes. N.C. Gen. Stat. 75-4 makes an agreement limiting a person's right to do business in North Carolina unenforceable unless it is in writing and duly signed by the person who agrees not to compete.

Is a non-compete valid if I signed it after I started working in North Carolina?

It needs new consideration. Hejl v. Hood, Hargett & Associates, Inc. (2009) held that a covenant signed during an existing employment relationship must be supported by new consideration that is not illusory, such as a raise, bonus, promotion or additional training.

Will a North Carolina court shorten a non-compete that is too broad?

No. North Carolina courts will not rewrite an overbroad covenant; they refuse to enforce it or enforce only a separable reasonable part (Whittaker General Medical Corp. v. Daniel, 1989; Beverage Systems of the Carolinas v. Associated Beverage Repair, 2016).

How long can a non-compete last in North Carolina?

This page found no statutory maximum. Courts judge time and territory for reasonableness, and in Farr Associates, Inc. v. Baskin (2000) the court counted a two-year look-back together with a three-year post-employment restriction as a five-year restriction.

Who has to prove a North Carolina non-compete is reasonable?

The party seeking to enforce it, usually the employer. Hartman v. W.H. Odell & Associates, Inc. (1994) placed the burden of proving reasonableness on that party.

Does the FTC non-compete ban apply in North Carolina?

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.