Understanding Non-Compete Agreements in Nebraska: What Employers and Employees Should Know

 DISCLAIMER: THE INFORMATION CONTAINED HEREIN IS SOLEY FOR EDUCATIONAL PURPOSES. IT IS NOT LEGAL ADVICE OR LEGAL AUTHORITY AND IS ONLY THE AUTHOR’S INTERPRETATION OF EMPLOYMENT LAW SPECIFICALLY FOR NON-COMPETES IN NEBRASKA.

Non-compete agreements are common in employment contracts, but in Nebraska, their enforceability and scope are subject to specific legal standards. Whether you’re an employer looking to protect your business or an employee reviewing a contract, understanding Nebraska law is critical to avoid disputes and ensure compliance.

What Is a Non-Compete Agreement?

A non-compete agreement (or covenant not to compete) is a contract in which an employee agrees not to work for competitors, start a competing business, or provide services to the employer’s clients for a certain period after leaving the employer. Employers use these agreements to protect trade secrets, client relationships, and confidential information.

Enforceability in Nebraska

Nebraska courts generally enforce non-compete agreements if they are reasonable and necessary to protect a legitimate business interest. Key factors include:

1. Duration – Nebraska courts typically consider agreements reasonable if they last no longer than necessary to protect the employer, often 6–24 months.
2. Geographic Scope – The geographic area must relate to the employer’s business operations and not unreasonably restrict the employee. Note, businesses with a specific clientele cannot use geographic scope but instead limit the scope to clients that the employee had substantial contact.
3. Type of Work Restricted – Restrictions should be limited to work that directly competes with the employer.
4. Consideration – Employers must provide something of value in exchange for the agreement, such as employment, promotion, or specialized training.

Important: Nebraska does not modify overly broad non-compete agreements, even if the agreements provide for modification. Agreements have to be carefully crafted to protect a legitimate business interest. Moral of the story, pigs get fat and hogs get slaughtered. Don’t be a hog.

Recent Legal Trends in Nebraska

Nebraska has seen growing attention to the balance between business protection and employee mobility. Trends include:

• Shorter enforceable durations – Courts are increasingly limiting agreements that unnecessarily restrict future employment.
• Focus on specific business interests – Employers must clearly demonstrate a legitimate business interest, like protecting trade secrets or customer relationships.
• Greater scrutiny on low-wage employees – Non-competes for hourly or lower-paid employees are more likely to be unenforceable.

Employers should stay informed on evolving case law to ensure contracts remain enforceable.

Best Practices for Employers

To create a non-compete that stands up in Nebraska courts:

• Tailor the scope – Restrict only the activities necessary to protect your business.
• Limit duration and geography – Avoid overly broad or indefinite restrictions.
• Clearly define confidential information – Make sure the non-compete explicitly ties to protecting legitimate business interests.
• Document consideration – Ensure employees receive something of value in exchange for signing.
• Review periodically – Update agreements to reflect changes in the business or law.

Advice for Employees

Employees should:

• Read carefully – Understand the scope, duration, and geographic restrictions.
• Ask questions – Clarify what constitutes a competing business or activity.
• Negotiate if possible – Some restrictions can be narrowed or clarified before signing.
• Seek legal guidance – Consulting an employment attorney can help you understand potential risks before signing a non-compete.

Bottom Line

Non-compete agreements in Nebraska can be a powerful tool for protecting business interests, but they must be carefully drafted and reasonable to be enforceable. Employers should follow best practices to reduce legal risk, and employees should understand their rights and obligations before signing.

With the right guidance, both parties can balance business protection and career mobility, avoiding disputes and legal uncertainty.

The law firm of Adams & Sullivan, P.C., L.L.O. was established in 1951. The employment attorneys understand Nebraska’s specific legal standards around the enforceability and scope of non-competes and help employers and employees protect their rights.

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