Non-compete law is in a period of real change. What was enforceable five years ago in many states is unenforceable today, and what is enforceable in Florida might be void in California. If you haven't reviewed your non-compete strategy recently, you're working from outdated assumptions.
The two contexts that matter for route owners:
1. Sale-of-business non-competes (the seller agrees not to compete with the buyer for X years, Y miles): these are GENERALLY MORE ENFORCEABLE in nearly every state, including states that ban employment non-competes. Courts treat business-sale non-competes as protecting the buyer's purchased goodwill, a substantively different policy concern than restraints on workers.
2. Employment non-competes (your tech agrees not to compete with you after leaving): these are RESTRICTED OR BANNED in a growing list of states and increasingly under federal scrutiny.
State-by-state, in broad strokes (subject to constant change):
- California: nearly all employment non-competes are void by statute. Sale-of-business non-competes are generally allowed under California Business & Professions Code §16601 if structured properly.
- North Dakota, Oklahoma, Minnesota (and a growing list): broad employment-non-compete restrictions; sale-of-business carve-outs typically remain.
- Massachusetts, Washington, Illinois, Maine, etc.: salary thresholds, garden-leave requirements, or other procedural hurdles for employment non-competes.
- Florida: relatively permissive; courts will enforce reasonable employment and sale-of-business non-competes.
- Texas, Arizona, North Carolina, Georgia: generally enforce reasonable non-competes with consideration; specifics vary.
- Federal level: the FTC has attempted broad non-compete rulemaking; enforcement and ultimate scope have been the subject of litigation. Expect continued evolution.
The four "reasonableness" factors most courts apply:
1. Legitimate business interest: protecting goodwill, customer relationships, trade secrets, yes; preventing ordinary competition, no.
2. Geographic scope: tied to where the business actually operates. A 50-mile radius for a route that serves 15 zip codes is usually reasonable. A statewide ban often is not.
3. Duration: 2–5 years is the common safe range for sale-of-business; 6 months to 2 years for employment (where allowed at all).
4. Scope of restricted activity: tied to the actual business. "No working in pool service" is usually OK; "no working in any home service" usually is not.
For route sales specifically. A 3–5 year, 25-mile non-compete is the typical starting point and is enforceable in most states for sale-of-business purposes. Longer durations or broader geographies require stronger justification.
Why this is changing. Federal and state policymakers have moved against employment non-competes citing labor-mobility and wage-suppression concerns. Sale-of-business non-competes have largely been carved out of these efforts because they protect a specific transaction's economic substance. Watch for changes annually.
This is not legal advice. Non-compete enforceability is one of the most state-specific, fact-specific areas of business law. Always consult with a small-business attorney in your state before drafting, signing, or attempting to enforce a non-compete. We are not lawyers.