Kentucky Non-Compete Agreement

Introduction

Key Things to Know

1. 1

   Kentucky's signature rule is about consideration. Under Charles T. Creech, Inc. v. Brown (Ky. 2014), signing a current employee to a non-compete in exchange for nothing more than keeping the job does not create an enforceable covenant. The employer has to add value such as a promotion, a raise, a bonus, specialized training, or new confidential access. A fresh offer to a new hire, by contrast, generally counts.

2. 2

   There is no Kentucky non-compete statute. A non-compete, the contract in which an employee promises not to compete with the business for a set time and area after leaving, is enforced here purely through common law shaped by the Kentucky Supreme Court and Court of Appeals.

3. 3

   Reasonableness controls the duration and the territory. Kentucky courts have generally allowed restraints of roughly one to three years and expect a geographic area tied to where the employee actually did business; a covenant with no territory at all is exposed as an unreasonable restraint of trade.

4. 4

   Earnings are irrelevant to validity. The Commonwealth sets no salary or income threshold that switches a non-compete on or off, so do not borrow another state's wage floor for a Kentucky worker. Reasonableness and consideration settle the question instead.

5. 5

   Reformation is a maybe, not a promise. A Kentucky court may blue-pencil an overbroad covenant by trimming it back rather than voiding it, yet no rule compels the court to redraft an employer's contract, and a wholly unreasonable restraint can be refused outright.

6. 6

   Every covenant needs a genuine interest to protect. Kentucky enforces a non-compete only when it guards a legitimate business interest such as trade secrets, valuable confidential information, substantial customer relationships, goodwill, or specialized training, and reaches no further than that interest requires.

7. 7

   A confidentiality agreement pairs well with, or replaces, a non-compete. Many Kentucky employers layer a non-disclosure agreement under the Kentucky Uniform Trade Secrets Act (KRS Section 365.880 et seq.), which shields trade secrets and customer data without the time-and-territory limits a non-compete must satisfy.

Kentucky Requirements for Non-Compete Agreement

• Employee Non-Competes Are Enforceable

  In Kentucky a reasonable employee non-compete is enforceable, but the rule is common law, not a statute. Kentucky has no non-compete statute; enforceability comes from Kentucky Supreme Court and Court of Appeals decisions. A covenant is valid only if it is reasonable in time and geography, no broader than necessary to protect a legitimate business interest, and supported by adequate consideration.

• Governed by Common Law, Not a Statute

  Kentucky has not enacted a general non-compete statute, so there is no statutory checklist or maximum term. Courts in Kentucky decide enforceability case by case under common-law reasonableness and consideration standards. Because the standard is judge-made, careful, narrowly tailored drafting matters more here than pointing to a statutory safe harbor.

• Reasonable Time and Geography

  The restraint must be reasonable in duration and geographic scope and no broader than necessary to protect the employer's legitimate business interests. Courts in Kentucky have generally upheld restraints of about one to three years, with longer terms drawing greater scrutiny, and expect a territory tied to where the employee actually did business. A covenant with no geographic limitation is vulnerable as an unreasonable restraint of trade.

• Continued Employment Is Not Enough Consideration

  In Charles T. Creech, Inc. v. Brown, 433 S.W.3d 345 (Ky. 2014), the Kentucky Supreme Court held that continued at-will employment alone is not adequate consideration for a non-compete signed by an existing employee whose job terms did not change. To bind a current worker, the employer must give something of additional value, such as a promotion, raise, bonus, specialized training, or access to new confidential information. For a new hire, the initial job offer generally suffices.

• No Wage or Income Threshold

  Kentucky has no salary or income threshold that makes a non-compete valid or void. Enforceability turns on the common-law reasonableness and consideration tests, not on how much the employee earns. Proposals to bar non-competes for lower-wage workers have been introduced but have not become law as of 2026. Do not substitute another state's dollar threshold when the worker is in Kentucky.

• Blue-Pencil Is Discretionary

  Kentucky courts may, in their discretion, blue-pencil (reform) an overbroad covenant by narrowing it rather than voiding the whole agreement, but they are not obligated to rewrite an employer's contract and may refuse to enforce a fundamentally unreasonable restraint. Because reformation is not guaranteed, employers should draft the time, territory, and scope reasonably from the start.

• Legitimate Business Interest Required

  A Kentucky non-compete must protect a legitimate business interest, such as trade secrets, valuable confidential information, substantial customer relationships, goodwill, or specialized training, and must be no broader than necessary to protect that interest. A restraint whose only purpose is to keep a former employee from competing generally, without a genuine interest to protect, is unlikely to be enforced in Kentucky.

• Protect Trade Secrets With an NDA Too

  Because a non-compete must be reasonable and adequately supported, many Kentucky employers also use a confidentiality or non-disclosure agreement under the Kentucky Uniform Trade Secrets Act (KRS Section 365.880 et seq.). A confidentiality agreement protects trade secrets and customer data without the same time and territory reasonableness limits that govern a non-compete, so the two tools are often used together.