Non-Competes, NDAs, and Trade Secrets: What Actually Protects Your Business
Non-compete provisions are less useful than most employers assume and more common than most workers realize. For creative businesses specifically, they are rarely the right tool—and in a growing number of states, they are unenforceable regardless of what the contract says.
What a Non-Compete Actually Does
A non-compete restricts a worker—employee or independent contractor—from working for a competitor or starting a competing business for a defined period of time or within a defined geographic area. On paper, this sounds protective. In practice, non-competes are difficult to enforce, frequently overbroad, and often counterproductive in industries where relationships and reputation drive work.
The FTC estimates that roughly 30 million American workers have non-compete provisions in their agreements. Many of them don’t know it. If you’re unsure whether yours does, search the document for the word “compete.” These clauses appear as standalone agreements, inside employment contracts, or embedded in NDAs.
Several states—including California, Minnesota, North Dakota, and Oklahoma—ban non-competes for most workers entirely. Others impose strict requirements on scope and duration. An overbroad non-compete is often worth nothing in court and can create more litigation risk than it prevents.
What Actually Protects Creative Businesses
The assets worth protecting in a creative business are not the worker’s next employer. They are proprietary information, client relationships, and the work itself. Three legal tools address this directly.
Trade secret protection covers any information that derives value from not being generally known and is subject to reasonable efforts to maintain its secrecy. Client lists, pricing structures, proprietary processes, and original methodologies can all qualify. Unlike copyright or trademark, trade secret protection has no registration requirement—but it does require that you actually treat the information as secret. Sharing it freely, whether internally or externally, can destroy the protection.
Non-disclosure agreements restrict workers from sharing or using confidential information outside the scope of the engagement. A well-drafted NDA defines what counts as confidential, what the permitted uses are, and what happens after the relationship ends. NDAs remain enforceable in all fifty states, including those that prohibit non-competes.
Non-solicitation clauses prevent a departing worker from soliciting your clients or employees for a defined period. These are narrower than non-competes—they restrict who the worker can contact, not where they can work—which makes them substantially more likely to hold up in court.
A non-disparagement clause rounds out this framework by restricting parties from making negative public statements about each other after the engagement ends. It is not a substitute for the protections above, but it belongs in any agreement where the professional relationship involves reputational exposure.
The Check-Up
If you are reviewing existing agreements or drafting new ones, the relevant questions are:
Is your confidential information specifically identified in the agreement, or is the definition vague enough to be unenforceable?
Does your NDA clearly cover post-engagement obligations, or does protection end when the contract does?
Do you have a non-solicitation clause, and does it cover both clients and employees?
Do your agreements include non-disparagement protections?
A non-compete that doesn’t hold up in court, combined with no NDA and no non-solicitation clause, leaves your actual assets unprotected while creating the appearance of protection. The combination of trade secret protocols, a precise NDA, and a non-solicitation clause does more practical work than a non-compete in almost every creative business context.
If your current agreements need review or updating, schedule a consultation at the link below.
