Nevada Non-Compete Agreement

Introduction

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 Nevada a reasonable employee non-compete is enforceable within the limits of NRS 613.195.

2. 2

   Nevada enforces non-competes under NRS 613.195: a covenant is void and unenforceable unless it is supported by valuable consideration, imposes no restraint greater than required to protect the employer, imposes no undue hardship on the employee, and imposes restrictions appropriate in relation to the consideration.

3. 3

   Nevada has no salary or dollar income threshold. Instead NRS 613.195(3) draws a pay-basis line: a non-compete may not apply to an employee paid solely on an hourly wage basis, exclusive of tips or gratuities. Salaried and commissioned employees can be bound; purely hourly employees cannot. Do not import another state's dollar figure.

4. 4

   Nevada sets no fixed maximum duration or geographic radius. Reasonableness is judged case by case: the time, area, and scope of restricted activity must be no broader than needed to protect the employer. Courts in Nevada generally require the restraint to track where the employer actually does business.

5. 5

   NRS 613.195(1)(a) requires valuable consideration. Nevada has no advance-notice-before-signing rule, but whether continued at-will employment alone is enough consideration is scrutinized; a signing bonus, raise, promotion, or access to confidential information makes a Nevada covenant more defensible.

6. 6

   NRS 613.195(2) bars restricting a former employee from serving a former customer or client who was not solicited and voluntarily sought the employee out. If a covenant is overbroad but supported by consideration, a Nevada court shall blue-pencil (revise) it and enforce it as revised rather than voiding it.

7. 7

   Because non-competes are limited and cannot bind hourly workers, Nevada employers also protect confidential information with a confidentiality or non-disclosure agreement under the Nevada Uniform Trade Secrets Act (NRS Chapter 600A) and NRS 613.200(4), which is often the better tool.

Nevada Requirements for Non-Compete Agreement

• Employee Non-Competes Are Enforceable Within Limits

  In Nevada a reasonable employee non-compete is enforceable. NRS 613.195 makes a noncompetition covenant void and unenforceable unless it is supported by valuable consideration, imposes no restraint greater than required to protect the employer, imposes no undue hardship on the employee, and imposes restrictions appropriate in relation to the consideration. A covenant that meets those tests and is reasonably tailored can be enforced in Nevada.

• No Dollar Threshold, But No Hourly Workers

  Nevada has no salary or dollar income threshold for non-competes. Instead NRS 613.195(3) provides that a covenant may not apply to an employee paid solely on an hourly wage basis, exclusive of any tips or gratuities. This is a pay-basis line, not a dollar figure: salaried and commissioned employees can be bound, purely hourly employees cannot. Do not substitute another state's wage threshold for a Nevada worker.

• Restraint No Greater Than Needed

  Nevada sets no fixed maximum duration or geographic radius. Under NRS 613.195(1) the restraint must be no greater than required to protect the employer, must not impose undue hardship on the employee, and must be appropriate in relation to the consideration. Courts in Nevada generally require the time, area, and scope of restricted activity to track where the employer actually does business, and are skeptical of longer or open-ended restraints.

• Valuable Consideration Required

  NRS 613.195(1)(a) requires the covenant to be supported by valuable consideration. Nevada has no advance-notice-before-signing rule, but whether continued at-will employment alone is enough consideration is scrutinized by courts in Nevada. New consideration such as a signing bonus, raise, promotion, or access to confidential information makes a Nevada covenant more defensible. Recite the consideration in the agreement.

• Former Customers Who Follow You Are Protected

  NRS 613.195(2) bars a covenant from restricting a former employee from serving a former customer or client if the employee did not solicit that customer, the customer voluntarily chose to leave and seek out the employee, and the employee otherwise complies with the covenant. Any provision that violates this rule is void and unenforceable in Nevada, so a customer who follows the employee on their own generally can be served.

• Courts Revise Overbroad Covenants

  Nevada is a mandatory blue-pencil state. Under NRS 613.195, if a covenant is supported by valuable consideration but its limits as to time, geographic area, or scope of activity are unreasonable, the court shall revise the covenant to the extent necessary and enforce the covenant as revised. An overbroad Nevada covenant is generally narrowed rather than thrown out, provided it rests on valid consideration to begin with.

• Extra Caution for Physicians

  Beyond the statute, courts in Nevada apply extra caution to covenants that restrict physicians and other specialists on public-interest grounds, and generally will not bar a specialist from practicing where the former employer no longer has a physician in that specialty. This is case-law guidance, not a statutory carve-out, so a physician non-compete in Nevada should be scoped narrowly and reviewed carefully before it is relied on.

• Protect Trade Secrets With an NDA Too

  Because a non-compete is limited and cannot bind hourly workers, many Nevada employers also use a confidentiality or non-disclosure agreement under the Nevada Uniform Trade Secrets Act (NRS Chapter 600A) and NRS 613.200(4), which permits an agreement barring disclosure of trade secrets, business methods, customer lists, or confidential information if supported by consideration and reasonable in scope and duration. A confidentiality agreement can protect information even where a non-compete cannot apply.