Are employee non-compete agreements enforceable in North Carolina?
Sometimes. North Carolina enforces an employee non-compete only when it satisfies a five-part common-law test: the covenant must be in writing, part of an employment contract, supported by valuable consideration, reasonable as to time and territory, and designed to protect a legitimate business interest . Because a non-compete is a partial restraint of trade — a category North Carolina law disfavors — a covenant is upheld only when it is supported by consideration, reasonably necessary, and not against public policy.
North Carolina has no general non-compete statute. Enforceability is governed by case law, with a single statutory overlay — N.C. Gen. Stat. § 75-4 — requiring that the agreement be in writing and signed. The Supreme Court has stated the governing test in consistent terms for decades.
The writing requirement is statutory. Section 75-4 makes any agreement limiting a person's right to do business in the State unenforceable unless it is in writing and signed by the restrained party.
Treat a North Carolina non-compete as enforceable only if every one of the five elements is met. Because the agreement must satisfy § 75-4's writing-and-signature rule and the covenant is read strictly against the drafter, a single defective element defeats enforcement.
Sources for this answer
Case law · 2009-01-06
A.1 Medical Staffing Network, Inc. v. RidgwayNorth Carolina enforces an employee non-compete only if it is (1) in writing, (2) part of an employment contract, (3) based on valuable consideration, (4) reasonable as to time and territory, and (5) designed to protect a legitimate business interest.
To be enforceable under North Carolina law, a non-competition agreement must be: (1) in writing; (2) part of an employment contract; (3) based on valuable consideration; (4) reasonable as to time and territory; and (5) designed to protect a legitimate business interest.
See Med. Staffing Network, Inc. v. Ridgway, 194 N.C. App. 649 (2009).
Case law · 1989-06-08
A.5 Whittaker General Medical Corp. v. DanielThe North Carolina Supreme Court enforces employee covenants only if they are in writing, part of an employment contract, based on valuable consideration, reasonable as to time and territory, and not against public policy.
Such covenants are enforceable in this state if they are (1) in writing, (2) made part of a contract of employment, (3) based on valuable consideration, (4) reasonable both as to time and territory, and (5) not against public policy.
See Whittaker Gen. Med. Corp. v. Daniel, 324 N.C. 523 (1989).
Primary law
A.4 N.C. Gen. Stat. § 75-4Section 75-4 makes any agreement limiting a person's right to do business in North Carolina unenforceable unless it is in writing and signed by the party who agrees not to compete.
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: Provided, nothing herein shall be construed to legalize any contract or agreement not to enter into business in the State of North Carolina, or at any point in the State of North Carolina, which contract is now illegal, or which contract is made illegal by any other section of this Chapter.
See N.C. Gen. Stat. § 75-4.
Primary law
A.2 N.C. Gen. Stat. § 75-1North Carolina's restraint-of-trade statute declares every contract or combination in restraint of trade illegal — the policy backdrop that makes non-competes disfavored partial restraints.
Every contract, combination in the form of trust or otherwise, or conspiracy in restraint of trade or commerce in the State of North Carolina is hereby declared to be illegal.
See N.C. Gen. Stat. § 75-1.
Case law · 1988-07-28
A.3 United Laboratories, Inc. v. KuykendallNon-competition clauses are partial restraints of trade that are upheld only if supported by valuable consideration, reasonably necessary to protect the covenantee, and not against public policy.
However, this position was modified and it became generally recognized that, while non-competition clauses were in partial restraint of trade, they would nevertheless be upheld if the covenants were supported by valuable consideration, reasonably necessary to protect the interests of the covenantee, and not against public policy.
See United Labs., Inc. v. Kuykendall, 322 N.C. 643 (1988).
What consideration does a North Carolina non-compete require?
It depends on timing. A covenant signed at the start of employment is supported by the offer of employment itself , but a covenant imposed on an existing employee must be supported by new consideration — continued at-will employment is not enough . The new consideration can be modest; North Carolina courts do not weigh its adequacy, and payments as small as a few hundred dollars have been upheld.
The dividing line is whether the employment relationship already exists when the covenant is signed. For a covenant added mid-employment, the employer must give something new.
The Supreme Court has described the kind of new consideration that suffices — a raise or a new job assignment, for example.
Once some new consideration is present, courts do not second-guess its amount. A one-time payment of a few hundred dollars has been treated as adequate.
Do not rely on continued at-will employment as consideration for a covenant signed by a current employee. Pair the covenant with a raise, bonus, promotion, or other new benefit and document it, because a mid-employment covenant must rest on new consideration to be enforceable.
Sources for this answer
Case law · 2015-10-06
B.2 Employment Staffing Group, Inc. v. LittleA covenant not to compete added after an employment relationship already exists must be supported by new consideration.
“[I]f an employment relationship already exists without a covenant not to compete, any such future covenant must be based upon new consideration.”
See Emp't Staffing Grp., Inc. v. Little, 243 N.C. App. 266 (2015).
Case law · 2015-10-06
B.4 Employment Staffing Group, Inc. v. LittleNorth Carolina courts do not invalidate a non-compete for inadequacy of consideration; a $100 payment was not invalidating.
Accordingly, we hold that Defendant’s argument that this Court may invalidate the non-compete covenant based on the inadequacy of the $100 consideration is without merit.
See Emp't Staffing Grp., Inc. v. Little, 243 N.C. App. 266 (2015).
Case law · 1989-06-08
B.5 Whittaker General Medical Corp. v. DanielWhen the employment relationship exists before the covenant is signed, there must be new consideration such as a raise in pay or a new job assignment.
When the relationship of employer and employee is established before the covenant not to compete is signed there must be consideration for the covenant such as a raise in pay or a new job assignment.
See Whittaker Gen. Med. Corp. v. Daniel, 324 N.C. 523 (1989).
Case law · 2009-04-07
B.3 Hejl v. Hood, Hargett & Associates, Inc.A $500 payment to a long-time employee for signing a covenant was adequate consideration on the consideration element (though the covenant was ultimately unenforceable on other grounds).
Therefore, because the parties dealt at arms length, and the Plaintiff received $500.00 as consideration for signing the Agreement, we find the Agreement is not void due to lack of consideration.
See Hejl v. Hood, Hargett & Assocs., 196 N.C. App. 299 (2009).
Case law · 2002-08-06
B.1 QSP, Inc. v. HairAn offer of new employment constitutes valuable consideration for a non-compete, so a covenant entered at the start of (or in exchange for) employment is supported by consideration.
This offer, made by QSP on 12 February 2000, was an offer of new employment and therefore constituted valuable consideration.
See QSP, Inc. v. Hair, 152 N.C. App. 174 (2002).
How do North Carolina courts judge a non-compete's time and territory?
Reasonableness is a question of law for the court, and the employer bears the burden of proving it. A geographic restriction is reasonable only to the extent it protects the employer's interest in keeping its existing customers, so a territory broader than the area where the employee actually built customer relationships is vulnerable .
North Carolina assigns the reasonableness question to the judge, not the jury, and places the burden on the party seeking to enforce the covenant.
“The reasonableness of a noncompetition covenant is a matter of law for the court to decide.”
Territory is measured against the employer's legitimate interest in its customer base. A restriction reaching beyond the area the employee actually served is not reasonable.
An overly broad restraint is not narrowed to a reasonable size; it is simply not enforced.
Tie the geographic scope to the territory where the employee actually worked and built customer relationships, and keep the duration proportionate. Because the employer carries the burden of proving reasonableness as a matter of law, an unsupported nationwide or open-ended restraint invites a finding of unenforceability.
Sources for this answer
Case law · 1994-12-20
C.1 Hartman v. W.H. Odell & Associates, Inc.The reasonableness of a non-competition covenant is a matter of law for the court.
The reasonableness of a noncompetition covenant is a matter of law for the court to decide.
See Hartman v. W.H. Odell & Assocs., 117 N.C. App. 307 (1994).
Case law · 1994-12-20
C.2 Hartman v. W.H. Odell & Associates, Inc.The party seeking to enforce a non-compete bears the burden of proving the covenant is reasonable.
The party who seeks the enforcement of the covenant not to compete has the burden of proving that the covenant is reasonable.
See Hartman v. W.H. Odell & Assocs., 117 N.C. App. 307 (1994).
Case law · 1994-12-20
C.3 Hartman v. W.H. Odell & Associates, Inc.A territorial restriction is reasonable only to the extent it protects the employer's legitimate interest in maintaining its customers.
A restriction as to territory is reasonable only to the extent it protects the legitimate interests of the employer in maintaining [its] customers.
See Hartman v. W.H. Odell & Assocs., 117 N.C. App. 307 (1994).
Case law · 1989-06-08
C.4 Whittaker General Medical Corp. v. DanielA restraint that is too broad to be a reasonable protection of the employer's business will not be enforced.
If a contract by an employee in restraint of competition is too broad to be a reasonable protection to the employer’s business it will not be enforced.
See Whittaker Gen. Med. Corp. v. Daniel, 324 N.C. 523 (1989).
What counts as a legitimate business interest in North Carolina?
A covenant must protect something more than the employer's general wish to avoid competition. Before a restraint can be reasonably necessary to protect a legitimate interest, the employee must have acquired intimate knowledge of the business that is not generally available to the public . And the restriction must track the employee's actual duties — a covenant that bars work distinct from what the employee actually did is unenforceable .
The leading Supreme Court statement ties the legitimate-interest requirement to the employee's access to confidential or specialized knowledge.
The restriction must also be limited to the kind of work the employee performed.
Define the restricted activities by reference to the employee's actual role, not every line of the company's business. A covenant that bars an employee from any capacity at a competitor, including work the employee never performed, reaches beyond a legitimate interest and risks non-enforcement .
Sources for this answer
Case law · 1988-07-28
D.1 United Laboratories, Inc. v. KuykendallA covenant can be reasonably necessary to protect a legitimate interest only where the employee acquired intimate knowledge of the business not generally available to the public.
Before a covenant can be found reasonably necessary for the protection of a legitimate business interest, we hold that it is first necessary to find the employee, as a result of his employment, acquired intimate knowledge of the nature and character of the business which was not otherwise generally available to the public.
See United Labs., Inc. v. Kuykendall, 322 N.C. 643 (1988).
Case law · 2009-01-06
D.2 Medical Staffing Network, Inc. v. RidgwayRestrictive covenants are unenforceable where they prohibit the employee from future work distinct from the duties the employee actually performed.
However, we have held that restrictive covenants are unenforceable where they prohibit the employee from engaging in future work that is distinct from the duties actually performed by the employee.
See Med. Staffing Network, Inc. v. Ridgway, 194 N.C. App. 649 (2009).
Can a North Carolina court rewrite or blue-pencil an overbroad non-compete?
No — and this is the trap that catches many employers. North Carolina follows the strict blue-pencil doctrine: a court may strike a distinctly separable, unreasonable part of a covenant, but it may not rewrite or revise the remaining terms to make them reasonable. A reformation clause does not change this — parties cannot give a court a power the law withholds .
The North Carolina Supreme Court reaffirmed the strict rule in 2016, describing precisely what a court may and may not do.
The Court of Appeals draws the same line: a court may decline to enforce a distinctly separable part, but no more.
Critically, a contractual clause purporting to authorize the court to revise the covenant does not work. The Supreme Court held that parties cannot confer a power the court does not possess.
“However, parties cannot contract to give a court power that it does not have.”
Draft each restriction to be reasonable on its own, and separate the time, territory, and scope terms into distinct, severable provisions so a court can strike an overbroad one without voiding the rest. Do not rely on a reformation or savings clause to rescue an overbroad covenant — North Carolina courts will not rewrite it, even when the contract asks them to.
Sources for this answer
Case law · 2016-03-18
E.1 Beverage Systems of the Carolinas, LLC v. Associated Beverage Repair, LLCNorth Carolina follows the strict blue-pencil doctrine: a court cannot rewrite a faulty covenant but may enforce divisible and reasonable portions while striking the unenforceable portions.
North Carolina has adopted the “strict blue pencil doctrine” under which a court cannot rewrite a faulty covenant not to compete but may enforce divisible and reasonable portions of the covenant while striking the unenforceable portions.
See Beverage Sys. of the Carolinas, LLC v. Associated Beverage Repair, LLC, 368 N.C. 693 (2016).
Case law · 2016-03-18
E.3 Beverage Systems of the Carolinas, LLC v. Associated Beverage Repair, LLCA reformation clause cannot authorize a court to rewrite an unreasonable covenant — parties cannot contract to give a court a power it does not have.
However, parties cannot contract to give a court power that it does not have.
See Beverage Sys. of the Carolinas, LLC v. Associated Beverage Repair, LLC, 368 N.C. 693 (2016).
Case law · 1994-12-20
E.2 Hartman v. W.H. Odell & Associates, Inc.A court may at most decline to enforce a distinctly separable part of a covenant; it may not otherwise revise or rewrite it.
A court at most may choose not to enforce a distinctly separable part of a covenant in order to render the provision reasonable.
See Hartman v. W.H. Odell & Assocs., 117 N.C. App. 307 (1994).
Case law · 1989-06-08
E.4 Whittaker General Medical Corp. v. DanielNorth Carolina courts will not rewrite an overbroad covenant; they simply refuse to enforce it, though a separable reasonable provision can be enforced.
The courts will not rewrite a contract if it is too broad but will simply not enforce it.
See Whittaker Gen. Med. Corp. v. Daniel, 324 N.C. 523 (1989).
How does North Carolina treat customer and employee non-solicitation covenants?
Non-solicitation covenants are restrictive covenants, and their precise wording controls how far they reach. North Carolina courts read terms like solicit, recruit, and induce to require active persuasion, so a clause that bars only solicitation does not prohibit merely hiring or accepting a departing employee. A customer non-solicit that reaches prospective customers or areas where the employee had no customer connections is overbroad .
In Crockett, the court held that hiring former employees who were not actively solicited did not breach a non-solicitation covenant.
The court grounded that result in the ordinary meaning of the operative verbs.
A customer non-solicit also has to stay within the employer's actual customer relationships. Reaching potential clients the employer never had is an impermissible restraint.
Match the operative verb to the conduct you want to reach. If you intend to bar hiring as well as solicitation, say so expressly, because a covenant limited to solicit, recruit, or induce requires active persuasion and will not reach a passive hire; and confine customer non-solicits to actual, not prospective, customers.
Sources for this answer
Case law · 2011-06-07
F.1 Inland American Winston Hotels, Inc. v. CrockettHiring former employees who were not actively solicited did not breach a covenant prohibiting only solicitation, recruitment, or inducement.
After a thorough review of the record, we hold that there is no genuine issue of material fact, as defendants did not “solicit, recruit or induce” Brent West or Brian Fry to work for defendants in violation of the non-compete agreements and therefore, defendants were entitled to judgment as a matter of law.
See Inland Am. Winston Hotels, Inc. v. Crockett, 212 N.C. App. 349 (2011).
Case law · 2011-06-07
F.2 Inland American Winston Hotels, Inc. v. CrockettThe terms solicit, recruit, and induce all involve active persuasion, request, or petition.
We note that all of the above-cited definitions of “solicit, recruit or induce” are similar in that they involve active persuasion, request, or petition.
See Inland Am. Winston Hotels, Inc. v. Crockett, 212 N.C. App. 349 (2011).
Case law · 2009-04-07
F.3 Hejl v. Hood, Hargett & Associates, Inc.Barring an employee from obtaining clients the employer itself had failed to obtain is an impermissible restraint.
Defendant’s attempt to prevent Plaintiff from obtaining clients where Defendant had failed to do so, is an impermissible restraint on Plaintiff.
See Hejl v. Hood, Hargett & Assocs., 196 N.C. App. 299 (2009).
Does a North Carolina non-compete period toll or extend during a breach or litigation?
Only if the contract says so. North Carolina has no appellate decision holding that a court will equitably extend a restricted period to make up for time the former employee spent violating the covenant, so equitable tolling is unsettled. But federal courts applying North Carolina law have enforced express extension-on-breach clauses, stating that such tolling provisions appear to be valid under North Carolina law.
The clearest statement comes from the Middle District of North Carolina, enforcing a clause that paused the protected period while the employee was out of compliance.
“Such tolling provisions appear to be valid under North Carolina law.”
Applying that clause, the court treated the covenant as extended by the period of non-compliance rather than expired.
The Eastern District reached the same result, giving effect to a clause that tolled the time limit while the employee remained in violation.
If you want the restricted period to extend for the time an employee spends breaching, include an express extension-on-breach (tolling) clause; do not assume a court will lengthen the period on its own. Federal courts applying North Carolina law have enforced express tolling clauses, but no North Carolina appellate decision recognizes equitable tolling without one.
Sources for this answer
Case law · 2009-06-30
G.1 Philips Electronics North America Corp. v. HopeAn express contractual tolling provision that pauses the protected period during non-compliance appears valid under North Carolina law.
Such tolling provisions appear to be valid under North Carolina law.
See Philips Elecs. N. Am. Corp. v. Hope, 631 F. Supp. 2d 705 (M.D.N.C. 2009).
Case law · 2009-06-30
G.3 Philips Electronics North America Corp. v. HopeApplying the tolling clause, the court extended the non-compete by the eleven-month period of the employee's non-compliance.
Thus, the expiration of the Non-Competition Agreement should be tolled for eleven months, until April 9, 2010.
See Philips Elecs. N. Am. Corp. v. Hope, 631 F. Supp. 2d 705 (M.D.N.C. 2009).
Case law · 2006-03-27
G.2 Southtech Orthopedics, Inc. v. DingusA clause tolling the time limitation while the employee is in violation preserves the employer's bargained-for remedy and was given effect under North Carolina law.
On the other hand, as discussed above, paragraph ll(m) of the employment agreement tolls the time limitation of the non-compete as long as defendant is in violation of it, and so plaintiff will not be deprived of its bargained-for remedy if it later turns out that injunctive relief is warranted.
See Southtech Orthopedics, Inc. v. Dingus, 428 F. Supp. 2d 410 (E.D.N.C. 2006).
Are physician and health-care non-competes enforceable in North Carolina?
Not categorically, and they face an extra public-policy hurdle. North Carolina courts will refuse to enforce a physician covenant when doing so would create a substantial question of potential harm to the public health, weighing factors such as the shortage of specialists in the restricted area, the risk of a local monopoly, emergency availability, and patient choice. A pending bill, SB 673, would go further and ban non-competes for hospital-employed health-care professionals — defined as licensed physicians, physician assistants, advanced practice registered nurses, and registered nurses — outright.
In Zaldivar, the Court of Appeals affirmed summary judgment for the physician, holding the covenants unenforceable on public-policy grounds.
The governing test asks whether enforcement would threaten the public health.
The court applies a set of public-health factors to that question.
For physician and other health-care covenants, evaluate the public-health impact before relying on the restraint, and watch SB 673. The covenant can fail on public-policy grounds even if its time and territory are otherwise reasonable, and a pending bill would bar hospital health-care non-competes entirely.
Sources for this answer
Case law · 2019-03-19
H.5 Aesthetic Facial & Ocular Plastic Surgery Center, P.A. v. ZaldivarThe Court of Appeals held physician covenants unenforceable because they violated public policy and affirmed summary judgment for the physician.
After carefully reviewing the covenants, we find that they are unenforceable because they violate public policy and affirm the trial court’s grant of summary judgment for defendants.
See Aesthetic Facial & Ocular Plastic Surgery Ctr., P.A. v. Zaldivar, 264 N.C. App. 260 (2019).
Case law · 2019-03-19
H.1 Aesthetic Facial & Ocular Plastic Surgery Center, P.A. v. ZaldivarWhere enforcement would create a substantial question of potential harm to the public health, the public interest outweighs the covenant and the court will refuse to enforce it.
If ordering the covenantor to honor his contractual obligation would create a substantial question of potential harm to the public health, then the public interests outweigh the contract interests of the covenantee, and the court will refuse to enforce the covenant.
See Aesthetic Facial & Ocular Plastic Surgery Ctr., P.A. v. Zaldivar, 264 N.C. App. 260 (2019).
Case law · 2019-03-19
H.2 Aesthetic Facial & Ocular Plastic Surgery Center, P.A. v. ZaldivarCourts weigh specialist shortage, monopoly impact, emergency availability, and patient choice in assessing the risk of substantial harm to the public from a physician covenant.
This Court considers the following factors in determining the risk of substantial harm to the public: the shortage of specialists in the field in the restricted area, the impact of establishing a monopoly in the area, including the impact on fees in the future and the availability of a doctor at all times for emergencies, and the public interest in having a choice in the selection of a physician.
See Aesthetic Facial & Ocular Plastic Surgery Ctr., P.A. v. Zaldivar, 264 N.C. App. 260 (2019).
Primary law
H.3 S.B. 673 (2025)PDFSenate Bill 673 (2025, pending) would prohibit an employment contract for a hospital-employed health-care professional from containing a non-compete clause.
An employment contract for a health care professional employed by a hospital, as defined in G.S. 95-28.1B, shall not contain a non-compete clause.
See S.B. 673, 2025 Gen. Assemb., Reg. Sess. (N.C. 2025).
Primary law
H.4 S.B. 673 (2025)PDFSenate Bill 673 defines the covered health-care professionals as licensed physicians, physician assistants, advanced practice registered nurses, and registered nurses.
Health care professional. – An individual who is a licensed physician, physician assistant, advanced practice registered nurse as defined by the North Carolina Board of Nursing, or registered nurse.
See S.B. 673, 2025 Gen. Assemb., Reg. Sess. (N.C. 2025).
Can an out-of-state employer force a North Carolina non-compete dispute into another state's courts?
Not for a contract entered into in North Carolina. North Carolina voids any provision in a contract entered into in the State that requires a lawsuit or arbitration arising from the contract to be brought or heard in another state . A national employer that drops its standard out-of-state forum or venue clause into an agreement entered into in North Carolina cannot count on that clause to move the dispute out of state. Section 22B-3 reaches forum and arbitration provisions; it does not by itself void an out-of-state choice-of-law clause.
Section 22B-3 directly targets out-of-state forum-selection clauses.
Do not rely on an out-of-state forum, venue, or arbitration clause for a covenant entered into in North Carolina. Section 22B-3 makes such a provision void as against public policy, so the action can proceed in a North Carolina forum .
Sources for this answer
Primary law
I.1 N.C. Gen. Stat. § 22B-3A provision in a contract entered into in North Carolina that requires litigation or arbitration of a contract dispute to occur in another state is against public policy and void.
Except as otherwise provided in this section, any provision in a contract entered into in North Carolina that requires the prosecution of any action or the arbitration of any dispute that arises from the contract to be instituted or heard in another state is against public policy and is void and unenforceable.
See N.C. Gen. Stat. § 22B-3.
Can a party recover attorney fees in a North Carolina non-compete dispute?
Usually not in a plain contract action. North Carolina's reciprocal-fee statute for business contracts expressly excludes employment contracts, so a one-sided attorney-fee clause in an employment non-compete generally will not support a fee award . Fees are available on the margins — for example, to a prevailing party on an unfair-trade-practices claim under § 75-1.1, in the court's discretion and on findings of willfulness or a frivolous action .
The reciprocal-fee statute that applies to business contracts carves employment contracts out of its definition.
A separate, narrower fee path exists for unfair-trade-practices claims, which sometimes accompany a covenant or trade-secret dispute.
Do not assume a fee-shifting clause in an employment non-compete will be enforced. Section 6-21.6 excludes employment contracts from the reciprocal business-contract fee statute, so fee recovery generally depends on a separate statutory hook such as a § 75-1.1 unfair-trade-practices claim.
Sources for this answer
Primary law
J.1 N.C. Gen. Stat. § 6-21.6The reciprocal attorney-fee statute for business contracts expressly excludes employment contracts from the definition of a covered business contract.
Business contract. - A contract entered into primarily for business or commercial purposes. The term does not include a consumer contract, an employment contract, or a contract to which a government or a governmental agency of this State is a party.
See N.C. Gen. Stat. § 6-21.6(1).
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J.2 N.C. Gen. Stat. § 75-16.1On a § 75-1.1 unfair-trade-practices claim, the court may in its discretion award the prevailing party a reasonable attorney fee on findings of willfulness or a frivolous and malicious action.
In any suit instituted by a person who alleges that the defendant violated G.S. 75-1.1, the presiding judge may, in his discretion, allow a reasonable attorney fee to the duly licensed attorney representing the prevailing party, such attorney fee to be taxed as a part of the court costs and payable by the losing party, upon a finding by the presiding judge that: (1) The party charged with the violation has willfully engaged in the act or practice, and there was an unwarranted refusal by such party to fully resolve the matter which constitutes the basis of such suit; or (2) The party instituting the action knew, or should have known, the action was frivolous and malicious.
See N.C. Gen. Stat. § 75-16.1.
How do North Carolina trade-secret protections compare to a non-compete?
They remain available and are often the more durable tool. The North Carolina Trade Secrets Protection Act protects qualifying business and technical information without the reasonableness limits a non-compete faces, and misappropriation can be enjoined and remedied in damages, with punitive damages for willful and malicious conduct. Because a trade-secret claim does not depend on a valid covenant, it survives even where a non-compete fails.
The Act defines a trade secret by reference to its independent commercial value and reasonable secrecy efforts.
The remedies are robust, including injunctive relief and, for willful and malicious misappropriation, punitive damages.
Protect confidential information with a trade-secret and confidentiality strategy, not just a covenant. The Trade Secrets Protection Act supplies injunctive and damages remedies that do not depend on a valid non-compete, so they remain available even if a covenant is unenforceable.
Sources for this answer
Primary law
K.1 N.C. Gen. Stat. § 66-152The Trade Secrets Protection Act defines a trade secret by its independent commercial value from not being generally known and reasonable efforts to maintain secrecy.
“Trade secret” means business or technical information, including but not limited to a formula, pattern, program, device, compilation of information, method, technique, or process that: a. Derives independent actual or potential commercial value from not being generally known or readily ascertainable through independent development or reverse engineering by persons who can obtain economic value from its disclosure or use; and b. Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.
See N.C. Gen. Stat. § 66-152(3).
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K.2 N.C. Gen. Stat. § 66-154Trade-secret misappropriation may be enjoined and remedied in damages, and the trier of fact may award punitive damages for willful and malicious misappropriation.
If willful and malicious misappropriation exists, the trier of fact also may award punitive damages in its discretion.
See N.C. Gen. Stat. § 66-154(c).
Is North Carolina non-compete law about to change?
Possibly, but not yet. Two 2025 bills would restrict non-competes — HB 269 would bar them for covered employees earning less than $75,000 a year, and SB 673 would ban them for hospital-employed health-care professionals — but both were introduced in the 2025 session and remain pending, and neither has become law. Until one is enacted, the common-law five-factor test continues to govern.
HB 269, the Workforce Freedom and Protection Act, would declare a covenant restraining lawful work void for lower-paid workers.
The bill sets the coverage line at an annual income below $75,000.
SB 673 would impose a categorical ban for hospital-employed health-care professionals.
Track HB 269 and SB 673 before relying on a covenant for a lower-paid worker or a hospital-employed clinician, but draft to current law. Both bills remain pending in committee and have not been enacted, so the existing common-law test still controls.
Sources for this answer
Primary law
L.3 H.B. 269 (2025)PDFHouse Bill 269 (2025, pending) would declare it the public policy of North Carolina that a contract restraining a person from exercising lawful work is void to that extent; its operative prohibition reaches covered employees earning less than $75,000 a year.
Policy. – It is the public policy of this State that any contract by which anyone is restrained from exercising a lawful profession, trade, or business of any kind is to that extent void and unenforceable, except as provided in subsection (c) of this section.
See H.B. 269, 2025 Gen. Assemb., Reg. Sess. (N.C. 2025).
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L.1 H.B. 269 (2025)PDFHouse Bill 269 would define a covered employee as one earning less than $75,000 per year.
Employee. – An employee providing labor or services to another for pay of less than seventy–five thousand dollars ($75,000) per year.
See H.B. 269, 2025 Gen. Assemb., Reg. Sess. (N.C. 2025).
Primary law
L.2 S.B. 673 (2025)PDFSenate Bill 673 (2025, pending) would prohibit a non-compete clause in the employment contract of a hospital-employed health-care professional.
An employment contract for a health care professional employed by a hospital, as defined in G.S. 95-28.1B, shall not contain a non-compete clause.
See S.B. 673, 2025 Gen. Assemb., Reg. Sess. (N.C. 2025).