Non-Compete Clauses for Freelancers: What’s Enforceable (and What’s BS)

Client sends over a contract. You scroll to page 3. There it is: a non-compete clause saying you can’t work in your industry for 18 months after the project ends.

You’re a freelancer. This is your entire livelihood. Can they actually do this?

Short answer: Usually no. But it depends on where you live and what the contract actually says.

The California Rule (Simplest Version)

If you work in California, non-competes are **illegal**. Period.

Doesn’t matter if you’re a freelancer, contractor, or employee. Doesn’t matter what you signed. California Business & Professions Code § 16600 says contracts that restrict someone from practicing their profession are void.

Client sends you a contract with a non-compete? Cross it out. If they insist, tell them it’s unenforceable in California and you’re not signing something that violates state law.

• Exception:** If you’re selling your entire business (not just doing freelance work), California allows non-competes in that narrow situation. But “I built you a website” doesn’t count as selling a business.

The FTC Rule (Federal, But Currently Blocked)

In 2024, the FTC tried to ban non-competes nationwide for almost everyone, including independent contractors.

• The problem:** Federal courts blocked it. As of April 2026, the FTC rule is not in effect.

Translation: Don’t rely on federal protection. Your state law is what matters.

What About Other States?

Most states allow non-competes **if they’re reasonable**. But “reasonable” is doing a lot of work in that sentence.

Courts usually ask three questions:

1. **Is there legitimate business interest?** (Protecting trade secrets, client relationships, specialized training)

2. **Is the restriction reasonable in scope?** (Time limit, geographic area, type of work)

3. **Does it impose undue hardship on you?**

If a client tries to ban you from doing **any** work in your field for **18 months** across the **entire country**, most courts will laugh that out of the room.

What’s more likely to hold up:

• 6-month restriction (not 18 months)
• Limited to clients you worked with (not the entire industry)
• Geographic limit tied to where the client actually operates (not “Earth”)

What definitely won’t:

• Banning you from using general skills you already had
• Preventing you from earning a living in your profession
• Restrictions without any compensation (see next section)

The Consideration Problem

For a non-compete to be enforceable, you need to get **something of value** in exchange (lawyers call this “consideration”).

If you’re already mid-contract and the client suddenly adds a non-compete, that’s a red flag. Courts often reject these because you’re not getting anything new—you’re just giving up your right to work.

What counts as consideration:

• Upfront payment specifically tied to the non-compete
• Access to genuine trade secrets or proprietary systems
• Specialized training you didn’t have before

What doesn’t:

• “We’re paying you for the project” (you were getting that anyway)
• Vague promises of future work
• The privilege of working with them (not joking, clients actually try this)

State-by-State Snapshot

• California, North Dakota, Oklahoma:** Non-competes banned (with very narrow exceptions)

• Washington:** Only enforceable if you earn more than $120,000/year (as of 2026, indexed to inflation)

• Colorado, Illinois, Oregon, Nevada, DC:** Non-competes restricted; must meet earnings thresholds or other limits

• Most other states:** Allowed, but must be “reasonable” (time/geography/scope)

Check your state’s law. Don’t assume a contract is valid just because the client’s lawyer wrote it.

What Clients Actually Try to Sneak In

• 1. “You can’t work for any of our competitors”

If your client operates in e-commerce, does that mean you can’t build websites for anyone selling products online? That’s the entire internet.

Courts hate overbroad restrictions. If the clause doesn’t specifically define “competitors” or covers half the economy, it’s likely unenforceable.

• 2. “18-24 month restrictions”

Anything over 12 months is pushing it for freelancers. You’re not a C-suite executive with a golden parachute. Courts know this.

• 3. “Nationwide (or global) geographic limits”

Unless your client operates in all 50 states (or internationally), a nationwide ban is probably overreach.

If you’re a designer in Portland and your client’s coffee shop is in Portland, a clause banning you from working anywhere in the U.S. is absurd.

• 4. Non-competes hidden in NDAs

Watch for NDAs that morph into de facto non-competes. Language like “you agree not to use any knowledge gained from this project in future work” is functionally a non-compete.

Courts are starting to catch this. The FTC specifically called it out (even though their rule is blocked, the principle matters).

What to Do If You See One

• Don’t just sign it and hope it’s unenforceable.** Even if a court would eventually side with you, getting sued is expensive and stressful.

Option 1: Push back

“I’m a freelancer. This clause would prevent me from earning a living in my field. I’m happy to sign an NDA protecting your confidential information, but I can’t agree to a non-compete.”

Option 2: Negotiate it down

If the client insists, narrow it:

• Limit it to direct competitors (defined by name)
• Cap it at 6 months
• Restrict geography to where they actually operate
• Require them to pay you during the restriction period (they’ll suddenly find it less necessary)

Option 3: Add a severability clause

“If any part of this agreement is found unenforceable, the rest remains in effect.”

This protects you if the non-compete gets tossed but the client tries to void the whole contract (including your payment terms).

Option 4: Walk away

If the client won’t budge and you’re in a state where it might be enforceable, ask yourself: Is this project worth restricting your future work?

Sometimes the answer is no.

What Happens If You Violate One?

• Worst case:** Client sues for breach of contract. They ask the court for an injunction (order forcing you to stop working) and money damages.

What they have to prove:

• The non-compete is valid and enforceable
• You actually violated it
• They suffered harm because of it

If you’re in California (or another state that bans them), you’re probably fine. If you’re in a state that allows them, it depends on how reasonable the clause was and whether you actually competed.

• Practical reality:** Most clients don’t sue. Litigation is expensive. But “probably won’t sue” isn’t a legal strategy.

The NDA vs. Non-Compete Distinction

• NDA (Non-Disclosure Agreement):** Protects confidential information. Reasonable and standard.

• Non-compete:** Restricts your ability to work. Much harder to justify.

If a client says “we need a non-compete to protect our trade secrets,” they’re confused. That’s what NDAs are for.

You can (and should) agree not to share their proprietary information. You shouldn’t agree to stop doing your job.

What to Do Right Now

• 1. Check your existing contracts

Pull out every active freelance agreement. Search for “non-compete,” “restrictive covenant,” or “agree not to.”

• 2. Know your state’s law

Five minutes of Googling “[your state] non-compete independent contractor” will tell you if you’re in a banned state or a “reasonableness” state.

• 3. Build your template response

Write a short, professional paragraph you can send when clients include non-competes:

“I’ve reviewed the contract and noticed the non-compete clause in Section X. As a freelancer, I can’t agree to restrictions on future work in my field. I’m happy to sign a robust NDA protecting your confidential information, but I’ll need the non-compete removed before I can proceed.”

Most clients will fold. The ones who don’t are telling you something about what working with them will be like.

When You Actually Need a Lawyer

See a lawyer if:

• You already signed a non-compete and want to know if it’s enforceable
• You’re about to start work for a competitor and your old client is threatening to sue
• The restriction involves significant money (either theirs or yours)
• You’re in a state where the law is unclear and the stakes are high

This article gives you the framework to spot BS and push back. It doesn’t replace legal advice for your specific situation.

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• Disclaimer:** This is not legal advice. It’s legal information. If you need advice for your specific contract or situation, talk to a licensed attorney in your state. LawAmie helps you spot issues and understand your options—it’s not a substitute for a lawyer when you actually need one.