Are employee non-compete agreements enforceable in South Carolina?
Yes, sometimes. South Carolina has no general non-compete statute, so enforceability turns on common law: a covenant is upheld only if it is necessary to protect a legitimate interest, reasonably limited in time and place, not unduly harsh on the employee, reasonable as a matter of public policy, and supported by valuable consideration.
Because a non-compete is a restraint on trade that is against public policy, South Carolina courts disfavor these covenants . The reasonableness analysis is rooted in Standard Register Co. v. Kerrigan and is applied today as a conjunctive list — every one of the five elements must be met or the covenant fails .
Do not assume South Carolina will trim an overbroad covenant down to something enforceable — as the dedicated question below explains, it will not. Because the five factors are conjunctive, a covenant that fails any single one of them is unenforceable.
Sources for this answer
Case law · 2011-10-20
A.1 Team IA, Inc. v. LucasTeam IA states South Carolina's five-factor reasonableness test for enforcing a covenant not to compete.
A covenant not to compete will be upheld only if it is: (1) necessary for the protection of the legitimate interest of the employer; (2) reasonably limited in its operation with respect to time and place; (3) not unduly harsh and oppressive in curtailing the legitimate efforts of the employee to earn a livelihood; (4) reasonable from the standpoint of sound public policy; and (5) supported by valuable consideration.
See Team IA, Inc. v. Lucas, 395 S.C. 237, 717 S.E.2d 103 (Ct. App. 2011).
Case law · 1961-03-22
A.2 Standard Register Co. v. KerriganKerrigan explains that non-competes are restraints of trade against public policy and are therefore unenforceable unless they meet the reasonableness criteria.
The reason that contracts against competition are held to be unenforceable unless they meet certain criteria, is that they constitute a restraint upon trade which is against public policy.
See Standard Register Co. v. Kerrigan, 238 S.C. 54, 119 S.E.2d 533 (1961).
What legitimate business interests can support a South Carolina non-compete?
The core interest that justifies a non-compete is the employer's customer relationships and goodwill. South Carolina separately enforces covenants protecting an employer's contractual relationships with its own employees, and it protects trade secrets by statute independent of any covenant.
A restraint is reasonable when it is designed to protect the employer against the loss of customers the employee could divert; protecting against ordinary competition, untethered to such an interest, is not enough . South Carolina also recognizes an employer's interest in its relationships with its own employees: in Oxman v. Sherman, the court read a covenant as barring inducement of other employees to breach their contracts rather than as a blanket bar on hiring .
Trade secrets are protected by statute independent of any covenant. Under the South Carolina Trade Secrets Act, every employee who knows of an employer's trade secret has a duty to refrain from using or disclosing it, separate from and in addition to any written agreement . That statutory protection endures until the secret is disclosed or discovered by proper means .
Do not rely on a non-compete to protect information that the South Carolina Trade Secrets Act already covers. A focused confidentiality and trade-secret strategy can reach misappropriation without the strict-construction risk that attaches to a covenant not to compete.
Sources for this answer
Case law · 1961-03-22
B.1 Standard Register Co. v. KerriganKerrigan supports protecting the employer against the loss of its customers as the legitimate interest that can justify a restraint.
A restrictive covenant, therefore, is reasonable if it is designed to protect the employer against loss of his customers.
See Standard Register Co. v. Kerrigan, 238 S.C. 54, 119 S.E.2d 533 (1961).
Case law · 1961-10-30
B.2 Oxman v. ShermanOxman supports protecting the employer's contractual relationships with its employees by barring inducement to breach, rather than a blanket no-hire.
We construe the first covenant mentioned as restraining appellant from seeking to induce any of respondents' employees to breach their contract of employment and not as preventing him from seeking the services of such employees so long as there is no interference with their contractual relations with respondents.
See Oxman v. Sherman, 239 S.C. 218, 122 S.E.2d 559 (1961).
Primary law
B.3 S.C. Code Ann. § 39-8-30Section 39-8-30 imposes a statutory duty on employees to refrain from using or disclosing an employer's trade secret independently of any contract.
Every employee who is informed of or should reasonably have known from the circumstances of the existence of any employer's trade secret has a duty to refrain from using or disclosing the trade secret without the employer's permission independently of and in addition to any written contract of employment, secrecy agreement, noncompete agreement, nondisclosure agreement, or other agreement between the employer and the employee.
See S.C. Code Ann. § 39-8-30(B).
Primary law
B.4 S.C. Code Ann. § 39-8-30Section 39-8-30 provides that trade-secret protection endures until the secret is disclosed or discovered by proper means.
A trade secret endures and is protectable and enforceable until it is disclosed or discovered by proper means.
See S.C. Code Ann. § 39-8-30(A).
How narrow must a customer non-solicitation covenant be in South Carolina?
It must be tied to the customers the employee actually dealt with. South Carolina enforces a customer non-solicitation covenant limited to customers the employee had contact with during a defined look-back period — and such a limit can even substitute for a geographic restriction — but a covenant barring solicitation of every customer on the employer's books advances no legitimate interest and is unenforceable.
Federal courts applying South Carolina law draw the line at the employee's own customer relationships. In Vessel Medical, Inc. v. Elliott, the District of South Carolina upheld a non-solicitation covenant precisely because it reached only customers the employee had contact with during his last twelve months of employment . By contrast, Fournil v. Turbeville Insurance Agency, Inc. refused to enforce a covenant that also barred soliciting customers the employee had never serviced, because prohibiting those contacts protected no legitimate interest of the employer . The governing principle is that an employer may protect its customer relationships but may not enforce a covenant that simply prevents ordinary competition .
Do not write an any customer on our books non-solicitation clause. Limit the restriction to customers the departing employee actually serviced or contacted within a defined look-back period; a blanket customer ban is treated as an unenforceable restraint on ordinary competition rather than the protection of a legitimate interest.
Sources for this answer
Case law · 2015-09-15
C.1 Vessel Medical, Inc. v. ElliottVessel Medical upheld a customer non-solicitation covenant because it was limited to customers the employee had contact with during his last twelve months of employment.
Here, Elliott is restricted from soliciting customers with whom he had contact during his last 12 months of employment and such covenants have withstood overbreadth challenges.
See Vessel Med., Inc. v. Elliott, No. 6:15-cv-00330-MGL, 2015 U.S. Dist. LEXIS 122436 (D.S.C. Sept. 15, 2015).
Case law · 2009-03-02
C.3 Fournil v. Turbeville Insurance Agency, Inc.Fournil held that prohibiting an employee from soliciting customers she had never serviced was not related to any legitimate interest of the employer.
The magistrate found that prohibiting such contacts was not related to any legitimate interest of Turbeville, and this conclusion was well-founded.
See Fournil v. Turbeville Ins. Agency, Inc., No. 3:07-cv-03836-JFA (D.S.C. Mar. 2, 2009).
Case law · 2009-03-02
C.2 Fournil v. Turbeville Insurance Agency, Inc.Fournil held that an employer may not enforce a covenant that prevents ordinary competition rather than protecting a legitimate interest.
An employer is not, however, entitled to enforce an agreement preventing ordinary competition.
See Fournil v. Turbeville Ins. Agency, Inc., No. 3:07-cv-03836-JFA (D.S.C. Mar. 2, 2009).
Is continued at-will employment enough consideration for a South Carolina non-compete?
Not by itself. When a covenant is signed after employment has already begun, South Carolina requires separate, independent consideration — continued at-will employment alone is not enough .
Poole v. Incentives Unlimited, Inc. is the controlling rule. The court held that a covenant entered after the inception of employment needs new consideration beyond the continuation of at-will work . In Poole itself, the employee's duties, position, and salary were left unchanged after she signed, so there was nothing to supply that separate consideration .
Do not ask a current employee to sign a non-compete on the strength of keeping the same job. Pair the covenant with genuine new consideration — a raise, bonus, promotion, or a change in status — and document it, because an unchanged role will not support the restraint.
Sources for this answer
Case law · 2001-06-04
D.1 Poole v. Incentives Unlimited, Inc.Poole holds that a covenant signed after employment begins requires separate consideration beyond continued at-will employment.
Therefore, we adopt the rule that when a covenant is entered into after the inception of employment, separate consideration, in addition to continued at-will employment, is necessary in order for the covenant to be enforceable.
See Poole v. Incentives Unlimited, Inc., 345 S.C. 378, 548 S.E.2d 207 (2001).
Case law · 2001-06-04
D.2 Poole v. Incentives Unlimited, Inc.Poole found no separate consideration where the employee's duties, position, and salary were unchanged after signing.
In the instant case, Poole's duties, position, and salary were left unchanged.
See Poole v. Incentives Unlimited, Inc., 345 S.C. 378, 548 S.E.2d 207 (2001).
What duration and geographic scope are reasonable for a South Carolina non-compete?
There is no statutory cap; reasonableness is judged on the facts. The territory may be no broader than necessary to protect the employer's legitimate interest, and both time and place must independently be reasonably limited.
Geography is tied to the employer's actual customer base. A territorial restriction is unreasonable when it sweeps in an area broader than necessary to protect the legitimate interest of the employer . Because the test is conjunctive, each of time and place must be reasonable on its own; as a practical matter, a wide territory paired with a long duration is harder to defend than a restraint matched to where the employee actually worked and the customers the employee actually served .
Do not copy a duration or radius from another state's form. Match the territory to the employee's real customer contacts and keep the time period to what the record can justify, because a South Carolina court will not narrow an overbroad scope to save the covenant.
Sources for this answer
Case law · 1961-03-22
E.1 Standard Register Co. v. KerriganKerrigan holds that a territorial scope is unreasonable if it covers an area broader than necessary to protect the employer's legitimate interest.
Stated negatively, the territorial scope renders the restraint unreasonable if it covers an area broader than necessary to protect the legitimate interest of the employer.
See Standard Register Co. v. Kerrigan, 238 S.C. 54, 119 S.E.2d 533 (1961).
Case law · 2011-10-20
E.2 Team IA, Inc. v. LucasTeam IA's conjunctive five-factor test requires time and place to be reasonably limited as part of the overall reasonableness inquiry.
A covenant not to compete will be upheld only if it is: (1) necessary for the protection of the legitimate interest of the employer; (2) reasonably limited in its operation with respect to time and place; (3) not unduly harsh and oppressive in curtailing the legitimate efforts of the employee to earn a livelihood; (4) reasonable from the standpoint of sound public policy; and (5) supported by valuable consideration.
See Team IA, Inc. v. Lucas, 395 S.C. 237, 717 S.E.2d 103 (Ct. App. 2011).
Will a South Carolina court blue-pencil or narrow an overbroad non-compete?
No. South Carolina is a strict no-blue-pencil, no-reformation jurisdiction: a court will not rewrite an unreasonable covenant, and the agreement must stand or fall on its own terms.
In Poynter Investments, Inc. v. Century Builders of Piedmont, Inc., the South Carolina Supreme Court held that the restrictions in a non-compete cannot be rewritten by a court or limited by the parties' later agreement, but must stand or fall on their own terms . The court reversed an order that had purported to enforce the covenant on narrower terms than the parties wrote . Stonhard, Inc. v. Carolina Flooring Specialists, Inc. refused to supply a missing territorial limitation, reasoning that adding a term the parties never negotiated would itself violate public policy .
There is one narrow lever: an alternative, already-drafted fallback. In Team IA, Inc. v. Lucas, the Court of Appeals indicated that a narrower alternative territory written into the original agreement could remain enforceable even when the primary territory was overbroad — because the court would be enforcing language the parties actually agreed to, not inventing it .
Do not rely on a savings clause asking a court to reduce an overbroad restraint to whatever is reasonable — South Carolina will not do it. Build tiered, severable, narrower alternatives directly into the agreement so a court has enforceable text to fall back on rather than a term it must create.
Sources for this answer
Case law · 2010-05-24
F.1 Poynter Investments, Inc. v. Century Builders of Piedmont, Inc.Poynter holds that South Carolina courts cannot rewrite a non-compete's restrictions, which must stand or fall on their own terms.
These cases stand for the proposition that, in South Carolina, the restrictions in a non-compete clause cannot be rewritten by a court or limited by the parties' agreement, but must stand or fall on their own terms.
See Poynter Invs., Inc. v. Century Builders of Piedmont, Inc., 387 S.C. 583, 694 S.E.2d 15 (2010).
Case law · 2010-05-24
F.3 Poynter Investments, Inc. v. Century Builders of Piedmont, Inc.Poynter reversed an order that enforced the non-compete on terms other than those the parties agreed upon.
We reverse the order which purports to enforce a non-competition agreement on terms other than those agreed upon by the parties.
See Poynter Invs., Inc. v. Century Builders of Piedmont, Inc., 387 S.C. 583, 694 S.E.2d 15 (2010).
Case law · 2005-10-10
F.2 Stonhard, Inc. v. Carolina Flooring Specialists, Inc.Stonhard holds that a covenant may not be reformed or blue-penciled to add a new term the parties never agreed to.
We hold, therefore, that the contract may not be reformed or blue-penciled so as to add an entirely new term to which neither of the parties agreed.
See Stonhard, Inc. v. Carolina Flooring Specialists, Inc., 366 S.C. 156, 621 S.E.2d 352 (2005).
Case law · 2011-10-20
F.4 Team IA, Inc. v. LucasTeam IA indicates an alternative, narrower territory written into the original agreement can remain enforceable even when the primary territory is overbroad.
However, we conclude the alternative territorial restriction contained in the parties' original agreement (South Carolina, North Carolina, Georgia, and Alabama) would remain valid and enforceable to the extent it is not overly broad after further development of the facts.
See Team IA, Inc. v. Lucas, 395 S.C. 237, 717 S.E.2d 103 (Ct. App. 2011).
Are confidentiality and nondisclosure agreements treated like non-competes in South Carolina?
It depends on how broad they are. A genuine confidentiality or invention-assignment clause is not a restraint of trade and is not strictly construed against the employee — but an NDA that operates like a non-compete is judged like one.
In Milliken & Co. v. Morin, the South Carolina Supreme Court held that confidentiality and invention-assignment clauses are not in restraint of trade and should not be strictly construed in favor of the employee . Even so, those agreements are still restrictive covenants whose scope is subject to judicial review for reasonableness .
The line matters because a sweeping NDA can collapse into a functional non-compete. In Fay v. Total Quality Logistics, LLC, nondisclosure provisions that had the effect of a covenant not to compete required a reasonable time restriction like any other non-compete . Because those provisions operated as non-competes with no reasonable time limit, they violated South Carolina public policy .
Do not draft an open-ended NDA that bars an employee from doing similar work indefinitely. If a nondisclosure provision functions as a non-compete, South Carolina courts apply non-compete scrutiny — including a reasonable time limit — and an unlimited duration can void it.
Sources for this answer
Case law · 2012-08-01
G.1 Milliken & Co. v. MorinMilliken holds confidentiality and invention-assignment clauses are not in restraint of trade and are not strictly construed in favor of the employee.
We therefore hold confidentiality and invention assignment clauses are not in restraint of trade and should not be strictly construed in favor of the employee.
See Milliken & Co. v. Morin, 399 S.C. 23, 731 S.E.2d 288 (2012).
Case law · 2012-08-01
G.3 Milliken & Co. v. MorinMilliken holds that confidentiality and invention-assignment agreements remain restrictive covenants subject to judicial review for reasonableness.
Nevertheless, these agreements are still restrictive covenants and public policy demands their scope be subject to judicial review for reasonableness.
See Milliken & Co. v. Morin, 399 S.C. 23, 731 S.E.2d 288 (2012).
Case law · 2017-03-01
G.2 Fay v. Total Quality Logistics, LLCFay holds that nondisclosure provisions that operate as a covenant not to compete require a reasonable time restriction like any non-compete.
Because the nondisclosure provisions had the effect of a covenant not to compete, they required a reasonable time restriction like any other noncompete agreement.
See Fay v. Total Quality Logistics, LLC, 419 S.C. 622, 799 S.E.2d 318 (Ct. App. 2017).
Case law · 2017-03-01
G.4 Fay v. Total Quality Logistics, LLCFay held that NDA provisions operating as non-competes with no reasonable time restriction violated South Carolina public policy.
The nondisclosure provisions in paragraphs four and six operated as noncompete provisions with no reasonable time restriction, which violated the public policy of South Carolina.
See Fay v. Total Quality Logistics, LLC, 419 S.C. 622, 799 S.E.2d 318 (Ct. App. 2017).
Does South Carolina treat sale-of-business non-competes differently?
Yes. A covenant tied to the sale of a business is scrutinized at a more relaxed level than an employment covenant, so broader restraints may be easier to defend .
In Palmetto Mortuary Transport, Inc. v. Knight Systems, Inc., the South Carolina Supreme Court applied this relaxed standard to a covenant executed with an asset purchase . Reviewing the restraint under that standard, the court upheld the territorial restriction as reasonable and enforceable . The rationale is that a buyer is paying for goodwill, and the seller bargained for the price that the covenant helps protect .
Do not assume the relaxed sale-of-business standard rescues an ordinary employment non-compete. The looser scrutiny applies because the covenant is part of a business sale; a covenant a worker signs as a condition of employment is still judged under the strict five-factor test.
Sources for this answer
Case law · 2018-08-29
H.1 Palmetto Mortuary Transport, Inc. v. Knight Systems, Inc.Palmetto Mortuary holds that sale-of-business non-competes are scrutinized more leniently than employment non-competes.
Non-compete covenants executed in conjunction with the sale of a business should be scrutinized at a more relaxed level than non-compete covenants executed in conjunction with employment contracts.
See Palmetto Mortuary Transp., Inc. v. Knight Sys., Inc., 424 S.C. 444, 818 S.E.2d 724 (2018).
Case law · 2018-08-29
H.2 Palmetto Mortuary Transport, Inc. v. Knight Systems, Inc.Palmetto Mortuary upheld the territorial restriction of the sale-related covenant as reasonable and enforceable.
We hold the territorial restriction of the non-compete covenant is reasonable and enforceable, and we hold Knight's additional sustaining grounds are without merit.
See Palmetto Mortuary Transp., Inc. v. Knight Sys., Inc., 424 S.C. 444, 818 S.E.2d 724 (2018).
Does a South Carolina non-compete toll or extend during breach or litigation?
South Carolina law points against it. In Stonhard, the Supreme Court held that extending a covenant's time period beyond its stated expiration would be against public policy, and no South Carolina decision endorses automatic judicial tolling during a breach.
The closest authority is Stonhard, Inc. v. Carolina Flooring Specialists, Inc., which reasoned that judicially extending the restrained period would be arbitrary and would let a court disrupt the parties' private right to contract . That reflects the same strict-construction instinct behind South Carolina's no-reformation rule: a court will hold the parties to the period they wrote rather than lengthen it.
A contractual tolling clause — language in the agreement that pauses the clock during a breach — is a different question that no surveyed South Carolina case squarely decides. Any such clause still has to satisfy the five-factor reasonableness test, and a clause that converts a fixed restraint into an open-ended one invites the same public-policy objection Stonhard raised .
Open question: South Carolina has not clearly decided whether a contractual extension-on-breach clause is enforceable, and Stonhard rejects judicially extending a covenant past its stated end date. Draft any tolling provision as a separate, reasonable term tied to the duration of the breach, and do not assume a court will lengthen an expired covenant.
Sources for this answer
Case law · 2005-10-10
I.1 Stonhard, Inc. v. Carolina Flooring Specialists, Inc.Stonhard holds that extending a covenant's time period beyond its stated expiration would be against public policy.
Accordingly, any extension of the time period would be against public policy, because it would be arbitrary and set precedent allowing a court to disrupt a party's private right to contract.
See Stonhard, Inc. v. Carolina Flooring Specialists, Inc., 366 S.C. 156, 621 S.E.2d 352 (2005).
Case law · 2011-10-20
I.2 Team IA, Inc. v. LucasTeam IA's reasonableness test governs any restraint, including one extended by a tolling clause, which must remain reasonably limited in time.
A covenant not to compete will be upheld only if it is: (1) necessary for the protection of the legitimate interest of the employer; (2) reasonably limited in its operation with respect to time and place; (3) not unduly harsh and oppressive in curtailing the legitimate efforts of the employee to earn a livelihood; (4) reasonable from the standpoint of sound public policy; and (5) supported by valuable consideration.
See Team IA, Inc. v. Lucas, 395 S.C. 237, 717 S.E.2d 103 (Ct. App. 2011).
Are physician and healthcare non-competes enforceable in South Carolina?
For now, yes, under the same common-law test — South Carolina has no enacted physician-specific ban, though a bill to void physician non-competes passed the House in 2026 and is pending in the Senate.
A physician non-compete is currently analyzed under the ordinary five-factor reasonableness test, with the public-interest factor — patient access to care — as a likely pressure point . That could change. H.4767, the Physician Noncompete Contract Prohibition Act, would add a new chapter declaring that contracts with physicians containing noncompete clauses are against South Carolina public policy . As of this review the bill had passed the House and received a favorable Senate committee report, but it had not been enacted.
The bill is physician-specific — not a general healthcare-worker ban — and it is not an absolute prohibition. It would still let an employer recoup documented relocation, signing, retention, and training costs from a physician who leaves within a set period, and it preserves the employer's ability to protect trade secrets and confidential information; its limits would apply only to contracts or renewals entered on or after its effective date .
Watch this bill, but do not treat it as law yet. H.4767 has not passed the Senate or been signed, so physician non-competes in South Carolina are still governed by common-law reasonableness; recheck the bill's status before relying on either the current rule or the proposed ban.
Sources for this answer
Primary law · 2026-05-05
J.1 H.4767, Physician Noncompete Contract Prohibition ActH.4767, a bill pending in the South Carolina Senate, would declare physician noncompete clauses against the public policy of the State.
Contracts with physicians containing noncompete clauses are considered interference with the establishment or maintenance of a patient's choice of physician and are against the public policy of the State of South Carolina.
See H.4767, 126th Gen. Assemb., Reg. Sess. (S.C. 2026) (passed House Mar. 26, 2026; favorable Senate committee report May 5, 2026; not enacted).
Case law · 2011-10-20
J.2 Team IA, Inc. v. LucasTeam IA's five-factor test, including the sound-public-policy factor, governs physician non-competes absent a physician-specific statute.
A covenant not to compete will be upheld only if it is: (1) necessary for the protection of the legitimate interest of the employer; (2) reasonably limited in its operation with respect to time and place; (3) not unduly harsh and oppressive in curtailing the legitimate efforts of the employee to earn a livelihood; (4) reasonable from the standpoint of sound public policy; and (5) supported by valuable consideration.
See Team IA, Inc. v. Lucas, 395 S.C. 237, 717 S.E.2d 103 (Ct. App. 2011).
Did the FTC's federal non-compete rule change South Carolina non-compete law?
No. The FTC's 2024 nationwide Non-Compete Rule was set aside by a federal court before it took effect, so South Carolina non-competes remain governed by South Carolina common law .
Ryan LLC v. Federal Trade Commission held that the FTC lacked statutory authority to issue the rule and that the rule was arbitrary and capricious . The court set the rule aside and held it would not be enforced or take effect . That removes the federal rule as a nationwide overlay but does not make any particular South Carolina covenant enforceable — the common-law reasonableness test still controls.
Sources for this answer
Case law · 2024-08-20
K.1 Ryan LLC v. Federal Trade CommissionRyan set aside the FTC Non-Compete Rule and held it would not take effect.
The Non-Compete Rule, 16 C.F.R. § 910.1–.6, is hereby SET ASIDE and shall not be enforced or otherwise take effect on September 4, 2024, or thereafter.
See Ryan LLC v. Fed. Trade Comm'n, 746 F. Supp. 3d 369 (N.D. Tex. 2024).
Case law · 2024-08-20
K.2 Ryan LLC v. Federal Trade CommissionRyan held the FTC lacked statutory authority to promulgate the rule and that the rule was arbitrary and capricious.
In sum, the Court concludes that the FTC lacks statutory authority to promulgate the Non- Compete Rule, and that the Rule is arbitrary and capricious.
See Ryan LLC v. Fed. Trade Comm'n, 746 F. Supp. 3d 369 (N.D. Tex. 2024).