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

An NDA becomes a de facto non-compete if it defines 'confidential information' so broadly that you cannot perform your job duties at a competitor without inevitably disclosing trade secrets. Look for clauses that restrict 'similar services' or 'competitive activities' rather than specific proprietary data.

Are non-competes legal?

Legality varies by jurisdiction. The FTC has moved to ban most non-competes, and states like California, Oklahoma, and North Dakota have long-standing bans. 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 non-compete in disguise

How to identify a disguised non-compete in your NDA

An NDA is a disguised non-compete if it defines 'confidential information' so broadly that you cannot work for a competitor without violating the agreement. If the contract effectively bars you from using your general skills, knowledge, or experience gained during employment, it functions as a restrictive covenant, not a confidentiality agreement.

The Red Flags of Overbroad NDAs

Employers often use 'confidentiality' as a shield to prevent talent mobility. When reviewing your contract, look for these specific indicators that the NDA is intended to restrict your future employment:

Broad Definitions: The definition of 'Confidential Information' includes your general knowledge, skill, or experience acquired during your tenure.
'Inevitable Disclosure' Doctrine: The contract implies that you cannot work for a competitor because you would 'inevitably' disclose trade secrets, even if you have no intention of doing so.
Scope of Restriction: The clause prohibits you from working for any company that 'competes' with your employer, rather than just protecting specific trade secrets like client lists or proprietary code.
Geographic and Temporal Limits: The NDA lacks an expiration date or applies to a global geographic scope, making it impossible to work in your industry anywhere.

Key takeaway: If an NDA prevents you from using your general professional expertise, it is likely an unenforceable non-compete in disguise. Focus on whether the clause protects specific trade secrets or your general ability to earn a living.

Action Item: Highlight every instance where the contract uses the word 'competitor' or 'competitive activity.' If these terms are not narrowly defined, the NDA is likely overbroad.

Comparing NDAs and Non-Competes

Feature	Standard NDA	Disguised Non-Compete
Primary Purpose	Protect trade secrets	Restrict career mobility
Scope	Specific proprietary data	General job duties/skills
Duration	Usually limited (1-3 years)	Often indefinite or excessive
Enforceability	Generally enforceable	Often void in many states

How to Analyze Your Contract

Follow this step-by-step process to determine if your agreement is legally problematic:

Identify the 'Confidential Information' definition: Does it include 'general knowledge' or 'industry practices'? If yes, it is likely invalid.
Check for 'Non-Solicitation' overlap: Does the NDA also prevent you from contacting former clients or colleagues? This is a common secondary restriction.
Review the 'Scope of Services': Does the contract restrict you from performing 'similar services' for other entities? This is a hallmark of a non-compete.
Consult Local Law: Check if your state (e.g., California Business and Professions Code Section 16600) strictly prohibits non-compete agreements.

Key takeaway: Courts generally disfavor 'restraint of trade.' If an NDA is so broad that it prevents you from working in your chosen profession, a judge is likely to strike it down, regardless of what the contract says.

Action Item: Create a list of your core job responsibilities. If the NDA prohibits you from performing any of those tasks for a new employer, the clause is likely a disguised non-compete.

The Role of Jurisdiction

The enforceability of these clauses depends heavily on where you work. In states like California, non-competes are void as a matter of public policy. In other states, courts apply a 'reasonableness' test. They will look at:

The duration of the restriction (e.g., 6 months vs. 5 years).
The geographic reach (e.g., a specific city vs. the entire world).
The legitimate business interest (e.g., protecting a specific patent vs. preventing you from working for a rival).

If the NDA fails the reasonableness test, it may be modified (blue-penciled) or thrown out entirely by a court.

Protecting Your Career

Do not sign an agreement without understanding the long-term implications. If you are unsure whether your NDA is actually a non-compete, you need an objective analysis. TermScore uses advanced AI to scan your employment contracts for overbroad definitions, hidden restrictive covenants, and clauses that violate state-specific labor laws. By identifying these traps before you sign, you maintain your professional freedom and ensure your career trajectory remains in your control.