What is the difference between an NDA and a non-compete?

An NDA protects trade secrets and proprietary data from being shared. A non-compete restricts your ability to perform similar work for a competitor or start a competing business within a specific timeframe and geographic area.

How can I tell if my consulting work violates my contract?

Check for 'Restricted Activities' clauses, geographic limitations, and 'Non-Solicitation' of clients or employees. If your consulting role requires you to use your former employer's proprietary processes, you are likely in breach.

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.

Does an employment NDA prevent me from working as a consultant in the same industry?

Q: Does an employment NDA prevent me from working as a consultant in the same industry?

An NDA typically prohibits the disclosure of confidential information, not the act of working. However, if your agreement includes non-compete or non-solicitation clauses, you may be legally barred from consulting for competitors. Always review the specific definitions of 'Confidential Information' and 'Restricted Activities'.

An employment NDA does not inherently prevent you from working as a consultant in the same industry, provided you do not disclose your former employer's trade secrets or proprietary information. However, if your contract contains non-compete or non-solicitation clauses, these may legally bar you from consulting for competitors.

Understanding the Scope of Your NDA

Most employees confuse Non-Disclosure Agreements (NDAs) with Non-Compete Agreements. An NDA is designed to protect intellectual property, client lists, and internal strategies. It does not stop you from using your general skills, knowledge, or experience gained during your employment. If you are consulting in the same industry, you are permitted to use your professional expertise, but you are strictly prohibited from using or sharing specific, non-public data belonging to your former employer.

Key takeaway: An NDA protects information, not your career path. If your consulting work does not require the use of your former employer's confidential data, you are generally on safe ground regarding the NDA itself.

Action Item: Review your contract for the definition of "Confidential Information." If it is overly broad—covering "all knowledge gained during employment"—it may be unenforceable, but it still poses a litigation risk.

Distinguishing NDAs from Non-Competes and Non-Solicits

To determine your risk, you must identify which restrictive covenants are present in your agreement. Many employers bundle these clauses into a single "Restrictive Covenants" section.

Clause Type	Primary Purpose	Impact on Consulting
NDA	Protects trade secrets	Minimal, unless you disclose data
Non-Compete	Prevents working for rivals	High; may ban consulting entirely
Non-Solicit	Prevents poaching clients	Medium; limits your client base

The Non-Compete Factor

If your contract includes a non-compete clause, the legality of your consulting work depends on your jurisdiction. In states like California, non-competes are largely unenforceable under Business and Professions Code Section 16600. In other states, they are enforceable if they are "reasonable" in scope, duration (typically 6–12 months), and geography.

The Non-Solicitation Factor

Even without a non-compete, a non-solicitation clause can cripple a consulting career. These clauses often prevent you from working with any client you serviced in the 12 months prior to your departure. If your consulting business relies on your former employer's client base, you are likely in violation.

Red Flags in Your Employment Contract

When reviewing your contract, look for these specific indicators that your consulting work might be restricted:

Broad Definitions: Does the contract define "Confidential Information" to include your general industry knowledge?
Geographic Scope: Does the restriction cover the entire country or just the immediate area where you worked?
Duration: Does the restriction last for an unreasonable period, such as 24 months or longer?
"In Any Capacity" Language: Does the contract prohibit you from working for a competitor "in any capacity," including as an independent contractor or consultant?

Key takeaway: If your contract uses the phrase "in any capacity," it is explicitly designed to prevent you from working as a consultant for competitors. This is a high-risk indicator.

Action Item: Highlight every instance of the word "consultant," "independent contractor," or "advisor" in your contract to see if these roles are specifically prohibited.

Steps to Mitigate Risk Before You Start Consulting

Audit your contract: Identify all restrictive covenants, not just the NDA.
Define your consulting scope: Ensure your consulting services are distinct from the proprietary projects you handled at your former firm.
Create a "Clean Room" policy: Document that you are not using any files, templates, or strategies from your previous employer.
Consult counsel: If your contract is complex, have a lawyer review the specific language before you sign a new consulting agreement.

How TermScore Simplifies Contract Analysis

Manually parsing dense legal jargon to find hidden restrictions is time-consuming and prone to error. TermScore uses advanced AI to instantly scan your employment agreements, flagging restrictive covenants, non-compete triggers, and overly broad NDA definitions. By providing an immediate risk assessment, TermScore helps you understand your professional mobility without the need for expensive hourly legal consultations. Upload your contract to TermScore today to gain clarity on your consulting rights.