North Carolina Enacts Uniform Restrictive Employment Agreement Act Regulating Noncompetes and Confidentiality Terms

Original title: Uniform Restrictive Employment Agreement Act.

Last action · April 14, 2025: Ref To Com On Rules, Calendar, and Operations of the House (House action)Sponsors: Tim Longest and 7 others

Bill progressHistory & official text ↓

Introduced

Committee

Floor Vote

Passed

Law

Track this bill to get notified when it advances a stage. One tap to stop, anytime.

What This Bill Would Do

North Carolina establishes comprehensive statutory regulations on s, including noncompetes, confidentiality agreements, and no-business clauses, effective January 1, 2026. The legislation sets strict notice requirements, bans noncompetes for low-wage workers earning below the state annual mean wage, limits the duration of various restrictive covenants, and authorizes statutory damages up to $5,000 per violation.

Why it matters

Employers face strict new procedural timelines, mandatory disclosures, and potential civil penalties up to $5,000 per worker for prohibited agreements, while workers gain explicit rights to challenge unenforceable clauses and obtain declaratory judgments.

Who It Would Affect

Groups the bill's text would affect if enacted, as described in the record. Being affected is not a position for or against it.

Directly affected

Workers

Workers gain advance notice protections, exemption from noncompetes if earning below the state mean wage, duration caps on restrictive covenants, and the right to seek declaratory judgments or statutory damages.

Directly affected

Employers

Employers must provide 14-day advance notice with mandatory disclosures, restrict noncompetes to eligible higher-wage workers and protected business interests, and face civil penalties up to $5,000 per violation for prohibited agreements.

Directly affected

North Carolina Department of Labor

The department is tasked with prescribing required notices, making them available on its website, and determining the annual mean wage for employees in the state.

Key Facts

The act applies to restrictive employment agreements including noncompete, confidentiality, no-business, nonsolicitation, no-recruit, payment-for-competition, and training-repayment agreements.
Employers must provide a copy of a proposed restrictive employment agreement and a prescribed notice from the North Carolina Department of Labor at least 14 days before a prospective worker accepts or commences work.
Restrictive employment agreements, other than confidentiality or training-repayment agreements, are prohibited and unenforceable for workers whose stated rate of pay is less than the annual mean wage of employees in North Carolina.
Non-business and no-recruit agreements cannot last longer than six months after the work relationship ends.

Show all 10 facts

Nonsolicitation and payment-for-competition agreements cannot last longer than one year after the work relationship ends.
Training-repayment agreements are limited to special training costs, cannot last longer than two years after training completion, and must prorate repayment.
Courts are prohibited from modifying an unenforceable restrictive employment agreement to make it enforceable.
An employer that enters into a restrictive employment agreement that the employer knows or reasonably should know is prohibited commits a civil violation subject to statutory damages of up to $5,000 per worker per agreement.
Choice of law and venue provisions in restrictive employment agreements are unenforceable unless they require governing law and venue where the worker primarily works or resides.
The act becomes effective on January 1, 2026.

Frequently Asked Questions

How much advance notice must an employer give before a worker signs a restrictive employment agreement?

Except for business sales involving substantial owners, employers generally must provide a copy of the proposed agreement and an official Department of Labor notice at least 14 days before a prospective worker accepts or commences work, or before a current or departing worker signs.

Can a court modify an illegal noncompete agreement to make it legal?

No, the court is explicitly prohibited from modifying a to make it enforceable.

What else do you want to know?

News Coverage

No news coverage found yet. Articles are indexed twice daily.

Follow the record

Votes, people, money & the original source

Where This Stands

Currently in committee. The next step in the legislative lifecycle is Floor Vote.

Procedural history

3 actions

Apr 14, 2025House
Ref To Com On Rules, Calendar, and Operations of the House
Apr 14, 2025House
Passed 1st Reading
Apr 10, 2025HouseIntroduced
Filed

Version history

Only one version on file - nothing to compare yet. As later stages (committee substitute, engrossed, enrolled) are captured, the redline appears here.

View official text →