NDA Guide
NDA vs. non-compete: spot hidden restrictions
An NDA is supposed to protect confidential information. A non-compete restricts competitive activity. When those concepts are mixed together, the practical effect can be much broader than the document title suggests.
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What an NDA normally does
A standard NDA limits the use or disclosure of specified confidential information. It does not ordinarily prevent someone from working in the same industry or competing using information and skills they are otherwise free to use.
What a non-compete does
A non-compete restricts competitive work or business activity for a defined period, territory, customer group, or market. Enforceability varies significantly by jurisdiction and circumstances.
Wording that deserves closer review
Be cautious when confidentiality language effectively prevents you from using general skills, working for competitors, contacting broad categories of customers, or participating in an industry after the relationship ends.
- Restrictions on working for any “competitor.”
- Broad non-solicitation language embedded in the NDA.
- Definitions that treat general knowledge or experience as confidential.
- Terms that last indefinitely and cover ordinary business know-how.
Separate the business issues
If the other party wants a non-compete or non-solicitation agreement, it is usually clearer to identify that restriction explicitly rather than burying it inside confidentiality language.