# Non-Competes in Nebraska[^about] Nebraska enforces only narrowly tailored, customer-specific covenants under a common-law reasonableness test, refuses to blue-pencil overbroad employment non-competes, and has no general statutory ban as of 2026. ## Are employee non-compete agreements enforceable in Nebraska? {#employee-noncompetes} **Short answer.** Sometimes, but only if the covenant is narrow and reasonable. Nebraska has no general statutory ban as of June 2026, but Nebraska courts enforce employee restraints only when they protect a legitimate interest and do not go beyond what is reasonably necessary [^q1-brown-three-part-test]. The practical rule is stricter than a generic reasonableness label suggests. Nebraska allows protection against unfair competition, such as siphoning customer goodwill, but not ordinary competition from a former employee. Broad bans on working in the same business, serving all company customers, or using general skills are high-risk. Nebraska also has statutory restraint-of-trade language in the background. The civil antitrust statute says contracts in restraint of trade or commerce are unlawful, and the older criminal statute declares covered restraints illegal [^q1-restraint-civil][^q1-restraint-criminal]. ## What is Nebraska's reasonableness test for non-competes? {#reasonableness-test} **Short answer.** Nebraska asks three questions: whether the restraint injures the public, whether it is no greater than reasonably necessary to protect a legitimate employer interest, and whether it is unduly harsh or oppressive to the employee [^q2-aon-reasonableness-test]. That test is applied to the covenant as written. The employer's legitimate interest is usually customer goodwill, confidential information, or trade secrets. The employer is not entitled to stop ordinary competition just because the former worker became a stronger competitor through general experience. *Aon* shows the enforceable side of the line. The covenant there reached only customers with whom the employee had personal business dealings during the last two years, so the court treated it as focused on goodwill rather than ordinary competition [^q2-aon-focused-goodwill]. ## What customer restrictions work in Nebraska? {#customer-specific-rule} **Short answer.** The safest Nebraska customer covenant is limited to clients or accounts the employee actually served and had personal contact with. Limiting no-solicit or no-deal language to that customer set is a necessary condition under *Polly*, not a complete safe harbor — the covenant still must satisfy the general reasonableness test [^q3-polly-customer-rule]. The key case is *Polly*. The employer had many accounts the employee never handled or even knew, so a covenant reaching those accounts was too broad. Nebraska's protectable interest is the goodwill the employee could unfairly take because of personal customer relationships, not every relationship the employer owns. *Sisk* applied the same rule in 2024. The court rejected a media-company non-solicit because it reached customers with whom the *company* had an actual or prospective relationship, instead of limiting the restraint to customers the employee actually did business with and personally contacted [^q3-sisk-prospective-clients]. > [!CAUTION] > **Drafting note.** > > Do not include prospective customers in an ordinary Nebraska employee customer restriction. Even if the employee had personal contact, a covenant that reaches beyond customers the employee actually did business with risks being void in full [^q3-sisk-prospective-clients]. ## Are geographic employee non-competes valid in Nebraska? {#geographic-noncompetes} **Short answer.** Usually high-risk for ordinary employees. Nebraska employment covenants are safest when customer-specific, because a geographic or business-activity ban often blocks ordinary competition rather than protecting a defined goodwill interest [^q4-gaver-ordinary-competition]. *Gaver* shows the risk. Applying the reasonableness test, the Nebraska Supreme Court struck a covenant it found aimed at ordinary competition rather than at protecting a legitimate interest such as customer goodwill. The lesson for drafting is to tie any restraint to a recognized protectable interest and keep it no broader than necessary, rather than relying on a radius or territory. Older cases sometimes enforced geographic language, and sale-of-business covenants are different. For current employment drafting, the conservative Nebraska approach is to avoid a radius or territory ban unless the covenant is truly ancillary to a sale or is otherwise tied to a very specific customer pool. > [!NOTE] > **Practice note.** > > A short radius is not a Nebraska safe harbor. If the practical effect is to stop the employee from using general skill in the market, the restraint still risks failing as ordinary competition [^q4-gaver-ordinary-competition]. ## Will Nebraska courts rewrite an overbroad non-compete? {#court-narrowing} **Short answer.** No, not for ordinary employment covenants. Nebraska rejects blue-pencil rewriting and generally enforces the covenant as written or not at all [^q5-waadah-blue-pencil]. This is one of Nebraska's most important drafting rules. If the covenant reaches too far, the court does not trim the term, delete the bad customer category, or rewrite the geography to something reasonable. *Waadah* also confirms that when integrated restraints are not severable, one invalid part can make the whole non-compete agreement unenforceable [^q5-waadah-entire-covenant]. For a clause-by-clause pass over a specific agreement against these drafting rules, the [Nebraska non-compete review checklist](/checklists/non-compete/us/nebraska) walks the full covenant suite item by item with each requirement's force level. > [!CAUTION] > **Drafting note.** > > Draft as if there is no rescue. Nebraska's franchise statute creates a separate exception, but that exception should not be carried into ordinary employment agreements [^q5-waadah-blue-pencil][^q5-waadah-entire-covenant]. ## How are sale-of-business non-competes treated in Nebraska? {#sale-of-business} **Short answer.** Sale-of-business covenants get more room than ordinary employee restraints, because the buyer is paying for goodwill and customer relationships. The covenant still must be reasonable in character, space, and time [^q6-chambers-goodwill-sale]. *Chambers-Dobson* involved both a sale agreement and a later employment agreement. The sale covenant protected the purchased customer list and goodwill; the employment covenant was upheld separately because the employee acquired customer information and goodwill during employment and the restricted customer pools were limited. Either way, the restrained party could still compete broadly outside those specific customer pools. That distinction matters. A sale covenant can protect purchased goodwill; an employment covenant cannot be a disguised market ban merely because the employee knows the business. ## Can a successor enforce a Nebraska non-compete after a merger? {#successor-merger} **Short answer.** Yes, when the merger statute governing the transaction transfers the covenant by operation of law. In *Aon*, applying a merger statute like Maryland's, the Nebraska Supreme Court held a successor could enforce a predecessor's covenant even without a separate assignment clause [^q7-aon-merger-successor]. This rule is about merger law, not automatic enforcement of every assigned employee covenant. The surviving company still must prove the covenant is valid under Nebraska reasonableness rules. In *Aon*, that worked because the restriction was tied to customers the employee personally dealt with during the last two years [^q7-aon-valid-and-passed]. ## What is Nebraska's franchise non-compete exception? {#franchise-reformation} **Short answer.** Nebraska has a franchise-only statutory reformation rule. If a franchise non-compete is unreasonable, the court or arbitrator must reform it to a reasonable and enforceable scope [^q8-franchise-reformation]. This is the lone statutory exception to the ordinary no-reformation rule covered in this note. It applies to franchise non-compete agreements and specified franchise-related parties, not to ordinary employer-employee covenants. > [!NOTE] > **Practice note.** > > Do not cite the franchise statute as a general Nebraska blue-pencil rule. It says what happens in franchise non-compete agreements; employment covenants remain governed by Nebraska's common-law all-or-nothing approach [^q8-franchise-reformation][^q8-waadah-no-general-reform]. ## Can another state's law save a Nebraska non-compete? {#choice-of-law} **Short answer.** Not reliably. Nebraska courts may apply Nebraska law when the services and competition are centered in Nebraska, especially if enforcing broader foreign law would undercut Nebraska public policy [^q9-mertz-nebraska-law-controls]. *Mertz* did not involve an express choice-of-law clause, but it is still important for multistate drafting. The Nebraska Supreme Court applied Nebraska law to an Iowa employer's covenant because the employee worked only in Nebraska and the competition affected Nebraska. The court also emphasized Nebraska's public policy against overbroad postemployment restraints [^q9-mertz-public-policy]. For a Nebraska worker, a foreign-law clause is therefore a risk variable, not a cure. The covenant should be drafted to satisfy Nebraska law if Nebraska is the likely place of work, customers, and enforcement. ## Do trade secrets make a Nebraska non-compete enforceable? {#trade-secrets} **Short answer.** No. Nebraska's Trade Secrets Act gives a separate statutory claim for misappropriation and a narrow definition of what counts as a trade secret, but it does not state a non-compete safe harbor. A covenant still must satisfy Nebraska's reasonableness limits [^q10-trade-secrets-act][^q10-trade-secret-definition][^q10-brown-reasonableness]. Trade-secret and confidentiality tools are often better targeted than a broad non-compete. But Nebraska's statutory definition is demanding: the information must derive independent economic value from not being known or ascertainable by proper means, and the owner must make reasonable secrecy efforts. Use trade-secret provisions for information risk, and use customer covenants only for the customer relationships Nebraska recognizes as protectable. ## Does a Nebraska non-compete period toll during breach or litigation? {#tolling-extension} **Short answer.** Nebraska appellate case law is silent. No staged Nebraska appellate decision squarely addresses whether a court may toll a non-compete period during breach or litigation, or whether a contractual extension-on-breach clause is enforceable [^q11-brown-reasonableness]. The conservative read is to treat tolling as another restraint that must be reasonable when the covenant is enforced as written. Nebraska requires the restraint to be no greater than reasonably necessary, and Nebraska refuses to reform overbroad covenants simply to make them enforceable [^q11-brown-reasonableness][^q11-waadah-no-reform]. > [!NOTE] > **Practice note.** > > Do not describe Nebraska as having a tolling holding. An aggressive extension clause that lengthens the restraint during alleged breach or litigation could face the same all-or-nothing overbreadth problem as any other Nebraska covenant term [^q11-brown-reasonableness][^q11-waadah-no-reform]. ## What should a Nebraska non-compete drafting checklist include? {#drafting-checklist} **Short answer.** Start with the narrowest protectable interest: specific customers the employee personally served, a reasonable lookback, separate confidentiality and trade-secret terms, and no reliance on court rewriting [^q12-polly-customer-check][^q12-gaver-no-reform-check]. For ordinary employees, avoid all-customer, prospective-customer, all-competitor, and broad geographic bans. Tie any no-solicit or no-deal restriction to customers the employee actually did business with and had personal contact with. Keep sale-of-business, franchise, merger, and trade-secret issues in separate drafting lanes. For modern media, technology, and sales roles, *Sisk* is the practical warning. Broad definitions of competitive work, including substantially similar products or services, can make even a short covenant too broad under Nebraska law [^q12-sisk-modern-warning]. > [!CAUTION] > **Drafting note.** > > One overbroad term can be fatal. Nebraska drafting should be conservative at the front end because a court may not trim the covenant after the dispute starts [^q12-gaver-no-reform-check][^q12-sisk-modern-warning]. [^about]: By Steven Obiajulu, J.D. Published by [openagreements.org](https://openagreements.org). Last reviewed 2026-06-02. License: CC BY 4.0. Steven Obiajulu, J.D. is admitted in New York, not Nebraska. This article synthesizes Nebraska primary law and is not legal advice from a Nebraska-admitted attorney. This article is for informational purposes only and does not create an attorney-client relationship. [^q1-brown-three-part-test]: **Securities Acceptance Corp. v. Brown** — "There are three general requirements relating to partial restraints of trade: First, is the restriction reasonable in the sense that it is not injurious to the public; second, is the restriction reasonable in the sense that it is no greater than is reasonably necessary to protect the employer in some legitimate interest; and, third, is the restriction reasonable in the sense that it is not unduly harsh and oppressive on the employee." *Securities Acceptance Corp. v. Brown, 171 Neb. 406, 417, 106 N.W.2d 456 (1960).* [^q1-restraint-civil]: **Neb. Rev. Stat. § 59-1603** — "Any contract, combination, in the form of trust or otherwise, or conspiracy in restraint of trade or commerce shall be unlawful." *Neb. Rev. Stat. § 59-1603.* [^q1-restraint-criminal]: **Neb. Rev. Stat. § 59-801** — "Every contract, combination in the form of trust or otherwise, or conspiracy in restraint of trade or commerce, within this state, is hereby declared to be illegal." *Neb. Rev. Stat. § 59-801.* [^q2-aon-reasonableness-test]: **Aon Consulting, Inc. v. Midlands Financial Benefits, Inc.** — "In determining whether a covenant not to compete is valid, a court considers whether the restriction is (1) reasonable in the sense that it is not injurious to the public, (2) not greater than is reasonably necessary to protect the employer in some legitimate interest, and (3) not unduly harsh and oppressive on the employee." *Aon Consulting, Inc. v. Midlands Fin. Benefits, Inc., 275 Neb. 642, 748 N.W.2d 626 (2008).* [^q2-aon-focused-goodwill]: **Aon Consulting, Inc. v. Midlands Financial Benefits, Inc.** — "The agreement was properly focused on the legitimate purpose of protecting Aon's goodwill with its customers." *Aon Consulting, Inc. v. Midlands Fin. Benefits, Inc., 275 Neb. 642, 748 N.W.2d 626 (2008).* [^q3-polly-customer-rule]: **Polly v. Ray D. Hilderman & Co.** — "Such a 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." *Polly v. Ray D. Hilderman & Co., 225 Neb. 662, 668, 407 N.W.2d 751 (1987).* [^q3-sisk-prospective-clients]: **Sisk v. Scripps Media, Inc.** — "This provision greatly exceeds the permissible scope of customers an employee may be precluded from contacting by a restrictive covenant under Nebraska law." *Sisk v. Scripps Media, Inc., No. 8:24CV86, 2024 WL 1175140 (D. Neb. Mar. 18, 2024).* [^q4-gaver-ordinary-competition]: **Gaver v. Schneider's O.K. Tire Co.** — "The noncompete agreement as written is an attempt to prevent ordinary competition, not improper or unjust competition, and we reject Schneider’s arguments to the contrary." *Gaver v. Schneider's O.K. Tire Co., 289 Neb. 491 (2014).* [^q5-waadah-blue-pencil]: **Unlimited Opportunity, Inc. v. Waadah** — "We decline Jani-King’s invitation to reconsider our rejection of the blue pencil rule." *Unlimited Opportunity, Inc. v. Waadah, 290 Neb. 629, 637, 861 N.W.2d 437 (2015).* [^q5-waadah-entire-covenant]: **Unlimited Opportunity, Inc. v. Waadah** — "The district court was correct to consider the two covenants together and find the entire clause invalid if one portion is invalid." *Unlimited Opportunity, Inc. v. Waadah, 290 Neb. 629, 637, 861 N.W.2d 437 (2015).* [^q6-chambers-goodwill-sale]: **Chambers-Dobson, Inc. v. Squier** — "Thus, a covenant not to compete which is contained in a contract for sale of a business is a seller’s self-imposed restraint from trade and is frequently necessary to make goodwill in the seller’s business a transferable asset and ensure that the buyer receives the full value of acquired goodwill." *Chambers-Dobson, Inc. v. Squier, 238 Neb. 748, 756, 472 N.W.2d 391 (1991).* [^q7-aon-merger-successor]: **Aon Consulting, Inc. v. Midlands Financial Benefits, Inc.** — "We agree with those cases which hold, under statutes similar to Maryland's, that a covenant not to compete is an asset of a corporation which passes by operation of law to a successor corporation as the result of a merger, regardless of whether the agreement would otherwise be assignable." *Aon Consulting, Inc. v. Midlands Fin. Benefits, Inc., 275 Neb. 642, 748 N.W.2d 626 (2008).* [^q7-aon-valid-and-passed]: **Aon Consulting, Inc. v. Midlands Financial Benefits, Inc.** — "For the reasons discussed, we conclude that the nonsolicitation agreement between Pearson and A & A was valid under Nebraska law and that the right to enforce the agreement passed to Aon by operation of law when it acquired A & A by merger." *Aon Consulting, Inc. v. Midlands Fin. Benefits, Inc., 275 Neb. 642, 748 N.W.2d 626 (2008).* [^q8-franchise-reformation]: **Neb. Rev. Stat. § 87-404** — "If restrictions in a noncompete agreement are found by an arbitrator or a court to be unreasonable in restraining competition, the arbitrator or court shall reform the terms of the noncompete agreement to the extent necessary to cause the restrictions contained therein to be reasonable and enforceable." *Neb. Rev. Stat. § 87-404(2).* [^q8-waadah-no-general-reform]: **Unlimited Opportunity, Inc. v. Waadah** — "It is not the function of the courts to reform a covenant not to compete in order to make it enforceable." *Unlimited Opportunity, Inc. v. Waadah, 290 Neb. 629, 630, 861 N.W.2d 437 (2015).* [^q9-mertz-nebraska-law-controls]: **Mertz v. Pharmacists Mutual Insurance Co.** — "Accordingly, Nebraska law should be applied to determine the validity of the covenant." *Mertz v. Pharmacists Mut. Ins. Co., 261 Neb. 704, 710, 625 N.W.2d 197 (2001).* [^q9-mertz-public-policy]: **Mertz v. Pharmacists Mutual Insurance Co.** — "In Nebraska, this court has refused to enforce postemployment covenants not to compete which are broader than reasonably necessary to protect legitimate business interests on the ground that such covenants are against public policy and void." *Mertz v. Pharmacists Mut. Ins. Co., 261 Neb. 704, 710, 625 N.W.2d 197 (2001).* [^q10-trade-secrets-act]: **Neb. Rev. Stat. § 87-501** — "Sections 87-501 to 87-507 shall be known and may be cited as the Trade Secrets Act." *Neb. Rev. Stat. § 87-501.* [^q10-trade-secret-definition]: **Neb. Rev. Stat. § 87-502** — "Trade secret shall mean information, including, but not limited to, a drawing, formula, pattern, compilation, program, device, method, technique, code, or process that: (a) Derives independent economic value, actual or potential, from not being known to, and not being ascertainable by proper means by, other 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." *Neb. Rev. Stat. § 87-502(4).* [^q10-brown-reasonableness]: **Securities Acceptance Corp. v. Brown** — "There are three general requirements relating to partial restraints of trade: First, is the restriction reasonable in the sense that it is not injurious to the public; second, is the restriction reasonable in the sense that it is no greater than is reasonably necessary to protect the employer in some legitimate interest; and, third, is the restriction reasonable in the sense that it is not unduly harsh and oppressive on the employee." *Securities Acceptance Corp. v. Brown, 171 Neb. 406, 417, 106 N.W.2d 456 (1960).* [^q11-brown-reasonableness]: **Securities Acceptance Corp. v. Brown** — "A contract in restraint of trade, which is neither limited in time nor space, is against public policy and void." *Securities Acceptance Corp. v. Brown, 171 Neb. 406, 422, 106 N.W.2d 456 (1960).* [^q11-waadah-no-reform]: **Unlimited Opportunity, Inc. v. Waadah** — "It is not the function of the courts to reform a covenant not to compete in order to make it enforceable." *Unlimited Opportunity, Inc. v. Waadah, 290 Neb. 629, 630, 861 N.W.2d 437 (2015).* [^q12-polly-customer-check]: **Polly v. Ray D. Hilderman & Co.** — "Because the covenant not to compete in this case attempts to restrict Polly from soliciting or working for Hilderman’s clients with whom Polly did not work and did not even know, it is greater than is reasonably necessary to protect Hilderman’s legitimate interest in customer goodwill, and is thus unreasonable and unenforceable." *Polly v. Ray D. Hilderman & Co., 225 Neb. 662, 669, 407 N.W.2d 751 (1987).* [^q12-gaver-no-reform-check]: **Gaver v. Schneider's O.K. Tire Co.** — "We have determined above that the noncompete agreement in this case is unreasonable, and we do not reform it to make it enforceable." *Gaver v. Schneider's O.K. Tire Co., 289 Neb. 491 (2014).* [^q12-sisk-modern-warning]: **Sisk v. Scripps Media, Inc.** — "Because both covenants at issue are unreasonable and unenforceable under Nebraska law, Sisk has demonstrated a fair chance of prevailing on the merits of his underlying action." *Sisk v. Scripps Media, Inc., No. 8:24CV86, 2024 WL 1175140 (D. Neb. Mar. 18, 2024).*