NDA vs non-compete

An NDA controls what someone says. A non-compete controls where they work. The law treats them very differently.

NDANon-compete
RestrictsUsing or disclosing confidential informationWorking for competitors or competing
Who signsAnyone receiving secrets: businesses, investors, staffMostly employees and sellers of a business
EnforceabilityBroadly enforceable if reasonableVaries sharply by state; void for most employees in California
Typical lengthA few years, trade secrets longerOften 6–24 months, where allowed

California

Business and Professions Code § 16600 says every contract restraining anyone from engaging in a lawful profession, trade or business is to that extent void, and § 16600(b) directs it to be read broadly to void employee non-competes “no matter how narrowly tailored,” unless a statutory exception applies (such as the sale of a business). NDAs remain enforceable in California as long as they don’t operate as a disguised non-compete.

The FTC non-compete rule

The Federal Trade Commission issued a rule in 2024 that would have banned most non-competes. A federal court in Texas set it aside before it took effect, and on September 5, 2025 the FTC dismissed its appeals, saying it would address harmful non-competes through case-by-case enforcement instead. So there is no nationwide ban; state law governs.

Why NDAForge templates have no non-compete

Mixing a non-compete into an NDA makes the whole document harder to sign and, in some states, puts the confidentiality clauses at risk too. If you genuinely need a non-compete or non-solicit, get one drafted for the specific state by a lawyer.

Sources: Cal. Bus. & Prof. Code § 16600 (California Legislative Information); FTC, statements of September 5, 2025 on dismissal of the non-compete rule appeals; NPR, “Under Trump, the Federal Trade Commission is abandoning its ban on noncompetes” (Sept. 5, 2025).

A template, not legal advice. NDAForge generates standard-form documents from your answers. It is not a law firm and doesn’t review your situation. Laws differ by state and country; for high-value deals, employment matters or anything unusual, have a licensed attorney review the agreement before anyone signs.

Frequently asked questions

Is an NDA a non-compete?

No. An NDA restricts using or disclosing confidential information. A non-compete restricts working for a competitor or starting a competing business. Some agreements contain both, which is why you should read the whole document, not just the title.

Can an NDA stop me from working for a competitor?

Not by itself. You can usually take a job with a competitor; what you can’t do is use or disclose your former employer’s confidential information there. An NDA written so broadly that it effectively prevents you from working in your field may be treated like a non-compete.

Are non-competes banned in the US?

Not nationwide. The FTC’s 2024 rule banning most non-competes was set aside by a federal court, and in September 2025 the FTC dropped its appeals and said it would instead pursue case-by-case enforcement. State law still controls: California voids most employee non-competes, and several other states restrict them.