How can I tell if my NDA is actually a non-compete?

An NDA is a disguised non-compete if it prohibits you from working for competitors, soliciting clients, or using general industry knowledge. Look for broad definitions of 'confidential information' that effectively prevent you from performing your job duties at a new company.

Are non-competes legal?

Legality varies by jurisdiction. The FTC has moved to ban most non-competes, and states like California, North Dakota, and Oklahoma have long-standing prohibitions. Always check your local state labor laws.

A TermScore is an AI-generated risk rating from 0 to 100 that evaluates the fairness and risk level of any legal document. A score of 86-100 means the contract is highly favorable, while 0-30 indicates dangerous terms you should walk away from.

What types of documents can TermScore analyze?

TermScore analyzes any legal document including freelance contracts, employment agreements, residential leases, NDAs, brand sponsorship deals, SaaS vendor agreements, and rental applications. Upload PDFs, Word documents, or images.

How much does TermScore cost?

TermScore offers a free plan with 3 scores per month. The Team plan is $15/month for 30 scores, and the Professional plan is $50/month for 500 scores with team collaboration features.

Is my document data secure?

Yes. Documents are processed in memory and analysis results are stored encrypted. TermScore never shares your document data with third parties and you can delete your data at any time from your dashboard.

How to tell if my employment NDA is actually a disguised non-compete clause?

How to Identify a Disguised Non-Compete Clause

An NDA is a disguised non-compete if it restricts your ability to work for competitors, solicit former clients, or utilize your general professional skills under the guise of protecting trade secrets. If the contract effectively prevents you from accepting a job in your industry, it is likely an illegal or unenforceable restrictive covenant.

The Anatomy of a "Shadow" Non-Compete

Employers often use "overbroad" language to create a de facto non-compete. By defining "Confidential Information" to include your general knowledge, industry contacts, or the specific methods you use to perform your job, they effectively tether you to the company.

Red Flags in Your NDA

Broad Definitions: The definition of "Confidential Information" includes "all knowledge gained during employment" rather than specific trade secrets.
Non-Solicitation Clauses: Provisions that prevent you from contacting any client or employee of the firm, regardless of whether you had a prior relationship with them.
"Invention Assignment" Overreach: Clauses that claim ownership over any idea or skill you develop, even if unrelated to the company's proprietary technology.
Geographic or Temporal Limits: Any mention of a specific timeframe (e.g., 12 months) or geographic radius (e.g., 50 miles) is a hallmark of a non-compete, not a standard NDA.

Key takeaway: If your NDA prevents you from working for a competitor by claiming that your "general industry knowledge" is a trade secret, it is likely an unenforceable non-compete in disguise.

Action Item: Highlight every instance of the word "knowledge" or "skill" in your contract. If the company claims ownership over these, you are likely looking at a restrictive covenant.

Comparison: Standard NDA vs. Disguised Non-Compete

Feature	Standard NDA	Disguised Non-Compete
Scope	Specific trade secrets	General industry knowledge
Duration	Indefinite (for secrets)	Fixed term (e.g., 6-24 months)
Purpose	Prevent data leakage	Prevent competition
Restriction	Do not disclose X	Do not work for Y

Jurisdictional Context and Enforceability

The legal landscape for non-competes is shifting rapidly. In 2024, the Federal Trade Commission (FTC) issued a rule aimed at banning most non-compete agreements nationwide. However, litigation is ongoing. Regardless of federal status, state laws remain the primary battleground.

State-Specific Considerations

California: Business and Professions Code Section 16600 makes almost all non-competes void. Even "disguised" NDAs are frequently struck down here.
New York: Courts apply a "reasonableness" test. If an NDA is so broad it prevents you from earning a living, it will likely be invalidated.
Texas: Requires that the agreement be "ancillary to an otherwise enforceable agreement" and reasonable in scope.

Action Item: Search your state's labor department website for "restrictive covenants" to see if your state has passed recent legislation limiting the scope of NDAs.

How to Protect Your Career Mobility

If you suspect your NDA is actually a non-compete, you have several options to mitigate your risk before signing.

Request a Narrowing Clause: Ask HR to add a provision stating that the NDA does not prevent you from using "general knowledge, skills, and experience" acquired during employment.
Define "Confidential Information" Strictly: Ensure the definition is limited to specific, documented trade secrets (e.g., source code, customer lists, financial projections).
Strike the Non-Solicitation: If the contract includes a non-solicitation clause, argue that it is unnecessary if you are not in a sales or high-level executive role.

Key takeaway: Never sign an agreement that restricts your "future employment opportunities" or "competitive activities." These are clear indicators of a non-compete.

Action Item: If an employer refuses to narrow the language, document the request in writing. This creates a paper trail showing you acted in good faith to protect your right to work.

Using Technology to Spot Hidden Risks

Analyzing legal documents manually is prone to human error, especially when companies use dense, legalese-heavy language to hide restrictive terms. TermScore uses advanced AI to scan your employment agreements, instantly identifying clauses that function as disguised non-competes or overbroad restrictive covenants. By uploading your contract to TermScore, you can gain the clarity needed to negotiate with confidence and protect your professional future.