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Nebraska Non-Compete Agreement

Nebraska enforces employee non-competes only against unfair competition and will not rewrite an overbroad one. No wage threshold. Attorney review available.

Introduction

A non-compete agreement bars a departing employee from competing with the business for a time, and Nebraska is unusually unforgiving: if a covenant reaches even slightly too far, its courts void the whole clause instead of narrowing it to a reasonable scope. Nebraska permits employee non-competes, but it enforces them narrowly, and there is no Nebraska statute that governs them; enforceability turns on common-law rules developed by the Nebraska Supreme Court. Courts in Nebraska generally uphold a covenant only if it is not injurious to the public, not greater than reasonably necessary to protect the employer in some legitimate interest, and not unduly harsh and oppressive on the employee (Gaver v. Schneider's O.K. Tire Co., 289 Neb. 491 (2014)). The only legitimate interest Nebraska recognizes is protection against unfair competition, meaning a former employee soliciting or doing business with the specific customers the employee personally dealt with; Nebraska does not let an employer bar ordinary competition. One feature makes Nebraska especially strict: its courts will not rewrite or blue-pencil an overbroad covenant to save it. If the restraint sweeps too far, the whole clause fails rather than being narrowed, so precise drafting is essential. Nebraska sets no salary or income threshold; enforceability depends on the terms, not the paycheck. This page explains Nebraska's rules and offers a template scoped to what Nebraska courts are likely to enforce. It is a state-law overview, not a promise that any given clause will hold up.

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Key Things to Know

  1. 1

    A non-compete agreement is a contract in which one party, usually an employee, agrees not to compete with a business for a set time and area after the relationship ends. In Nebraska an employee non-compete is enforceable only within narrow common-law limits.

  2. 2

    Nebraska has no statute governing non-competes. Courts in Nebraska uphold a covenant only if it is not injurious to the public, not greater than reasonably necessary to protect a legitimate interest, and not unduly harsh on the employee (Gaver v. Schneider's O.K. Tire Co., 289 Neb. 491 (2014)).

  3. 3

    Nebraska sets no salary or income threshold that makes a non-compete valid or invalid. Enforceability depends on the reasonableness of the terms, not on how much the employee earns, so do not rely on any other state's wage-floor figure.

  4. 4

    The only interest Nebraska protects is against unfair competition: a covenant may keep a former employee from soliciting or serving the specific customers the employee personally dealt with, plus reasonable time and area. Barring ordinary competition or reaching customers the employee never serviced is not allowed.

  5. 5

    Nebraska has no statutory advance-notice period before signing. A non-compete must be supported by valid consideration, but Nebraska courts have held that consideration alone does not save a covenant that is broader than reasonably necessary.

  6. 6

    Nebraska is a strict no-reformation state. Its courts will not rewrite or blue-pencil an overbroad covenant to make it enforceable; if the restraint is too broad, the whole clause fails rather than being narrowed to a reasonable scope.

  7. 7

    Because even a valid non-compete is narrow, Nebraska employers also protect confidential information through a confidentiality or non-disclosure agreement and the Nebraska Trade Secrets Act (Neb. Rev. Stat. Section 87-501 et seq.), which guards trade secrets without restraining where a former employee may work.

Key decisions before you file

Before you file a Non-Compete Agreement in Nebraska, a few decisions shape the document: which option to choose and what each one means. The Non-Compete Agreement guide walks through them.

Open the Non-Compete Agreement guide

Customize your Non-Compete Agreement Template with DocDraft

NEBRASKA COVENANT NOT TO COMPETE (Enforceable only to prevent unfair competition, and only if narrowly drafted)

NEBRASKA NOTE: Nebraska enforces an employee non-compete only if it is not injurious to the public, not greater than reasonably necessary to protect a legitimate interest, and not unduly harsh on the employee. The only interest Nebraska recognizes is protection against unfair competition: soliciting or serving the specific customers the employee personally dealt with. A bar on ordinary competition is not allowed. Nebraska is a strict no-reformation state, so a court will NOT rewrite an overbroad covenant and an overbroad clause fails entirely. Draft narrowly.

  1. PARTIES. This Covenant Not to Compete is made on [DATE] between [EMPLOYER NAME] (Company) and [EMPLOYEE NAME] (Employee).

  2. CONSIDERATION. In exchange for [OFFER OF EMPLOYMENT / CONTINUED EMPLOYMENT / A NEW RAISE, BONUS, PROMOTION, OR ACCESS TO CONFIDENTIAL INFORMATION], the Employee agrees to the restrictions below. Under Nebraska law consideration alone does not save a restraint broader than reasonably necessary.

  3. LEGITIMATE INTEREST. The Company has a legitimate interest only in protection against unfair competition: the Employee soliciting or doing business with the specific customers the Employee personally dealt with while employed. This covenant does not restrict ordinary competition or the Employee's use of general skills and knowledge.

  4. CUSTOMER RESTRICTION. For [REASONABLE PERIOD, e.g. 12 MONTHS] after employment ends, the Employee will not solicit, divert, or provide competing services to any customer of the Company with whom the Employee had personal contact during the [SPECIFY LOOKBACK, e.g. LAST 12 TO 24 MONTHS] of employment. This restriction reaches only those specific customers.

  5. GEOGRAPHIC SCOPE. This restriction applies only within [SPECIFIC AREA where the Employee actually worked or serviced customers], no larger than needed to protect against unfair competition. A statewide or nationwide area is unlikely to be reasonable in Nebraska.

  6. CONFIDENTIALITY AND TRADE SECRETS. The Employee will not use or disclose the Company's confidential information or trade secrets, consistent with the Nebraska Trade Secrets Act (Neb. Rev. Stat. Section 87-501 et seq.). This obligation is independent of the restrictions above.

  7. NO REFORMATION. The parties understand Nebraska courts will not narrow or rewrite an unreasonable restriction, so each restriction above is limited to what is reasonably necessary. If a court finds any restriction unreasonable, that restriction is unenforceable and the parties do not ask the court to reform it.

  8. GOVERNING LAW. This agreement is governed by Nebraska law.

[EMPLOYER NAME] [EMPLOYEE NAME]

Signature and date Signature and date

Note: Nebraska enforces an employee non-compete only to prevent unfair competition (soliciting the customers the employee personally dealt with), never ordinary competition, and only if it is not injurious to the public and not unduly harsh on the employee (Gaver v. Schneider's O.K. Tire Co., 289 Neb. 491 (2014)). There is no wage threshold, and Nebraska courts will not blue-pencil an overbroad covenant, so an overbroad clause fails entirely. Keep the restriction narrow and consider a confidentiality agreement as a backstop. For the generic template and other states, see the full Non-Compete Agreement template hub.

Nebraska Requirements for Non-Compete Agreement

Enforceable Only Against Unfair Competition

In Nebraska an employee non-compete is enforceable only within narrow common-law limits. There is no statute governing non-competes. Courts in Nebraska uphold a covenant only if it protects against unfair competition, meaning a former employee soliciting or serving the specific customers the employee personally dealt with; Nebraska does not allow a bar on ordinary competition (Gaver v. Schneider's O.K. Tire Co., 289 Neb. 491 (2014)).

No Income Threshold

Nebraska has no salary or income threshold that makes a non-compete valid or invalid. Unlike states that permit non-competes only above a wage floor, Nebraska judges the restraint on its reasonableness, not the employee's pay, though an unduly harsh burden on a lower-paid worker is one factor courts weigh. Do not rely on any other state's salary figure when the worker is in Nebraska.

Three-Part Reasonableness Test

Courts in Nebraska ask whether the restriction is not injurious to the public, not greater than reasonably necessary to protect the employer in a legitimate interest, and not unduly harsh and oppressive on the employee. All three must be satisfied. Protecting against ordinary competition is not a legitimate interest in Nebraska (Gaver v. Schneider's O.K. Tire Co., 289 Neb. 491 (2014)).

Limit to Customers With Personal Contact

A valid Nebraska covenant is limited to keeping a former employee from soliciting or serving the specific customers the employee had personal contact with while employed, plus reasonable time and area. Nebraska sets no fixed maximum duration or mileage, but a covenant reaching customers the employee never serviced, or a statewide or nationwide area, is unlikely to be reasonable.

Nebraska Will Not Reform Overbroad Covenants

Nebraska is a strict no-reformation state. Its courts will not rewrite, narrow, or blue-pencil an overbroad covenant to make it enforceable; if the restraint is broader than reasonably necessary, the whole clause fails rather than being trimmed to a reasonable scope (Gaver v. Schneider's O.K. Tire Co., 289 Neb. 491 (2014)). Careful, narrow drafting is essential in Nebraska.

Consideration and No Notice Rule

Nebraska has no statutory advance-notice period before signing a non-compete. The covenant must be supported by valid consideration, and courts have generally treated an offer of employment, continued employment, or a new benefit as sufficient. But Nebraska courts have held that consideration alone does not save a covenant that is broader than reasonably necessary, so give real consideration and keep the restraint narrow.

Protect Trade Secrets Too

Because even a valid non-compete is narrow, Nebraska employers also protect confidential information with a confidentiality or non-disclosure agreement and the Nebraska Trade Secrets Act (Neb. Rev. Stat. Section 87-501 et seq.). This protects trade secrets and customer data without restraining where a former employee may work, and avoids Nebraska's all-or-nothing risk on overbroad covenants.

Federal FTC Rule Is Not in Force

The 2024 Federal Trade Commission non-compete rule was set aside by a federal court before it took effect, so it is not currently binding, and its status remains unsettled. Nebraska does not depend on it: Nebraska's own common-law reasonableness and unfair-competition rules independently govern whether a non-compete is enforceable in Nebraska.

Frequently Asked Questions

Yes, but only within narrow limits. Nebraska has no statute governing non-competes, so enforceability turns on common law. Courts in Nebraska generally uphold a covenant only if it is not injurious to the public, not greater than reasonably necessary to protect the employer in some legitimate interest, and not unduly harsh and oppressive on the employee (Gaver v. Schneider's O.K. Tire Co., 289 Neb. 491 (2014)). The only legitimate interest Nebraska recognizes is protection against unfair competition, not against ordinary competition.

Nebraska sets no fixed maximum. A covenant lasts only as long as is reasonable to protect the employer against unfair competition, and courts in Nebraska weigh the duration against the burden on the employee and any injury to the public. Shorter, narrower restraints are far more likely to be upheld. Because Nebraska will not rewrite an overbroad clause, an unreasonably long term does not get shortened by the court; it can sink the entire covenant, so choose the shortest period that protects the legitimate interest.

Courts in Nebraska apply a three-part test: the restriction must not be injurious to the public, must be no greater than reasonably necessary to protect the employer in a legitimate interest, and must not be unduly harsh and oppressive on the employee. In practice the covenant must be limited to keeping a former employee from soliciting or doing business with the specific customers the employee personally dealt with, with reasonable time and geographic limits. A clause that bars ordinary competition or general use of skills is not reasonable in Nebraska.

No. Nebraska is a strict no-reformation state. Its Supreme Court has said it is not the function of the courts to reform unreasonable covenants not to compete solely to make them legally enforceable (Gaver v. Schneider's O.K. Tire Co., 289 Neb. 491 (2014)). If a Nebraska covenant is broader than reasonably necessary, the court refuses to enforce it entirely rather than narrowing it. This all-or-nothing rule makes careful, narrow drafting essential in Nebraska.

No. Unlike a number of states that only allow non-competes above a set income level, Nebraska has no wage or salary threshold. Enforceability in Nebraska depends on whether the restraint is reasonable and limited to protecting against unfair competition, not on how much the employee is paid. That said, a covenant that is unduly harsh on a lower-paid worker is one factor a Nebraska court weighs when deciding whether the restraint is reasonable.

Generally no. Nebraska protects only against unfair competition, so a covenant may keep you from soliciting or serving the specific customers you personally dealt with at your former employer, but it cannot bar you from ordinary competition or from using your general skills and knowledge. A broad Nebraska clause that stops you from working for any competitor, or that reaches customers you never handled, is likely to be found unreasonable, and because Nebraska will not narrow it, the whole covenant can fail.

Nebraska employers use a confidentiality or non-disclosure agreement and rely on the Nebraska Trade Secrets Act (Neb. Rev. Stat. Section 87-501 et seq.), which lets a business obtain an injunction and damages for the misappropriation of a trade secret. This approach protects confidential information and customer data without restraining where a former employee can work, so it is available in Nebraska even where a broad non-compete would not be enforceable, and it avoids Nebraska's all-or-nothing risk on overbroad covenants.

No. In 2024 the Federal Trade Commission issued a rule that would have banned most non-competes nationwide, but a federal court set it aside before it took effect, so it is not currently in force and its status has remained unsettled. Either way, Nebraska's own common-law reasonableness and unfair-competition rules continue to govern non-competes in Nebraska, so the federal rule's fate does not change how a Nebraska non-compete is judged today.