Montana Non Compete Law: Is Yours Enforceable? — Best Proven Guide (2026)

Montana non compete law enforces non competes only when they are reasonable: montana’s statute says any contract that restrains a person from exercising a lawful profession, trade or business is void to that extent, with exceptions only for the sale of a business’s goodwill and the dissolution of a partnership;

the Montana Supreme Court nevertheless upholds an employee non compete that passes a three-part reasonableness test — a limited time and area, a legitimate business interest, and no undue hardship on the worker or the public.

This guide gives the exact Montana non compete law rule with the date we verified it, the threshold and carve-outs where they exist, what a court does with an overbroad term, and what to do if you signed one. Rules verified against the statute on 2026-10-08; confirm the current rule with Montana Department of Labor and Industry, Employment Standards Division or an attorney before you rely on it.

Is a Non Compete Enforceable Under Montana Non Compete Law?

Montana’s statute says any contract that restrains a person from exercising a lawful profession, trade or business is void to that extent, with exceptions only for the sale of a business’s goodwill and the dissolution of a partnership; the Montana Supreme Court nevertheless upholds an employee non compete that passes a three-part reasonableness test — a limited time and area, a legitimate business interest,

and no undue hardship on the worker or the public.

The statute is Mont. Code 28-2-703 to 28-2-705. The carve-outs matter: sale of the goodwill of a business (28-2-704); dissolution of a partnership (28-2-705); a 2025 section (28-2-724) now prohibits contracts that restrict practice for certain licensed practitioners — read it before the first refresh.

Montana Non Compete Law at a Glance

Rules verified against the statute on 2026-10-08; confirm the current rule with Montana Department of Labor and Industry, Employment Standards Division or an attorney before you rely on it. The statute row is where to check it yourself.

The Reasonableness Test Under Montana Non Compete Law

Montana courts view non competes with suspicion. They read them strictly and in the light most favorable to the worker. Courts use a three-part test: the restriction must be limited in time or place, it must be backed by good consideration, and it must be reasonable.

Reasonable means it protects only a real business interest, such as client relationships or confidential information, without being so broad that it causes the worker undue hardship or harms the public.

Montana courts have struck down covenants that would force a worker to move away to keep working in their field. They have also struck down covenants that act as a full restraint on earning a living.

Covenants are more likely to hold up when they are short and narrow, for example limited to the former employer’s own clients or a small local area rather than a whole region or the entire state. With an overbroad term the court will reasonableness test; an overbroad covenant is void to that extent and Montana courts do not rewrite it.

Montana Non Compete Law If You Were Fired or Laid Off

The Montana Supreme Court has held that an employer normally has no legitimate business interest in enforcing a non compete when the employer chose to end the job. That includes firing or laying off a worker without cause.

The law is less settled for workers who quit or were fired for misconduct, and the result may differ if a worker took trade secrets, so confirm how this applies to your situation with a Montana lawyer.

What the Employer Must Give Under Montana Non Compete Law

Montana courts have held that past consideration cannot support a new agreement. Continued employment alone generally is not enough for a non compete signed after the job began. An employer usually must give something new in return, such as a raise, a promotion or access to confidential information, while a non compete signed at the time of hiring is generally supported by the job itself.

Non Solicit and Non Disclosure Agreements Under Montana Non Compete Law

A non solicit only bars contacting the former employer’s clients or coworkers, and a non disclosure only protects confidential information. Neither one stops you from working in your field at all. Because they are narrower, Montana courts have treated them as more likely to be enforceable than a full non compete, though they still must be reasonable.

If You Already Signed One: Montana Non Compete Law in Practice

Find your signed copy and read the exact limits it sets: how long it lasts, what area it covers, which work it restricts, and whether it applies only if you quit or also if you were let go. If your new job may overlap, you can ask your former employer in writing for a release or a written statement that the new role is not covered.

Before accepting or starting the new job, consider having a Montana employment lawyer review the agreement, because enforceability depends heavily on the facts.

An employer that believes a valid non compete was broken can ask a Montana court for an injunction ordering the worker to stop the competing work. It can also sue for money damages. The Montana Supreme Court has treated a liquidated damages clause, a preset payment amount written into the agreement, as potentially enforceable, and attorney fees are generally available only if the contract provides for them.

The Federal Rule and Montana Non Compete Law

The Federal Trade Commission adopted a nationwide non compete ban in 2024, but a federal court blocked it before it took effect and the FTC later withdrew its defense; as of October 2026 there is no federal ban in force, so Montana non compete law controls.

In 2025 the Montana Legislature passed HB 198, which extended the existing ban on non competes and non solicits to naturopathic physicians, registered nurses, advanced practice registered nurses and physician assistants.

It also passed HB 620, signed May 19, 2025, which extended the ban to all licensed physicians for contracts entered or renewed on or after January 1, 2026, with exceptions for the sale of a medical practice and for repayment of items such as signing bonuses, relocation costs and education expenses. No 2025 bill changing the rules for workers outside health care was found.

Other Montana Non Compete Law Rules to Know

Montana bars non competes for many licensed health care providers. Covered providers include physicians, physician assistants, registered and advanced practice nurses, naturopathic physicians, psychologists, social workers, professional and addiction counselors, marriage and family therapists, and behavioral health peer support specialists. The only general statutory exceptions are agreements made when selling a business’s goodwill or when dissolving a partnership.

Frequently Asked Questions

Are non competes enforceable in Montana?

Sometimes.

Montana’s statute says any contract that restrains a person from exercising a lawful profession, trade or business is void to that extent, with exceptions only for the sale of a business’s goodwill and the dissolution of a partnership; the Montana Supreme Court nevertheless upholds an employee non compete that passes a three-part reasonableness test — a limited time and area, a legitimate business interest,

and no undue hardship on the worker or the public.

Is there an income threshold under Montana non compete law?

No. Montana has no earnings threshold; enforcement turns on whether the agreement is reasonable.

What does a Montana court do with an overbroad non compete?

Reasonableness test; an overbroad covenant is void to that extent and Montana courts do not rewrite it.

Can my employer enforce a non compete in Montana after firing me?

The Montana Supreme Court has held that an employer normally has no legitimate business interest in enforcing a non compete when the employer chose to end the job. That includes firing or laying off a worker without cause.

I signed a non compete in Montana and have a new offer — what should I do?

Find your signed copy and read the exact limits it sets: how long it lasts, what area it covers, which work it restricts, and whether it applies only if you quit or also if you were let go.

Official Montana Sources & Resources

• Montana Department of Labor and Industry, Employment Standards Division: https://erd.dli.mt.gov/labor-standards/
• Montana non compete statute (Mont. Code 28-2-703 to 28-2-705): https://mca.legmt.gov/bills/mca/title_0280/chapter_0020/part_0070/section_0030/0280-0020-0070-0030.html
• Verified source: https://mca.legmt.gov/bills/mca/title_0280/chapter_0020/part_0070/sections_index.html
• U.S. Department of Labor, Wage and Hour Division — state payday requirements: dol.gov
• Federal Trade Commission — the non compete rule (status): ftc.gov
• Montana bar lawyer referral: https://www.montanabar.org/For-the-Public

This Montana non compete law guide was last verified against official Montana sources in October 2026. Rules change — confirm the current figure with the state agency or a licensed attorney.

More Montana Workplace Rights Guides

• Montana Final Paycheck Law: Deadlines and Penalties
• Montana Wrongful Termination Laws: When a Firing Is Illegal
• Montana At Will Employment Law: The Exceptions
• Montana Labor Laws: Every Rule in One Place
• Unemployment and Workplace Rights Guides for All 50 States

Disclaimer: This guide is general information, not legal or financial advice. My Unemployment Rights is an independent educational resource, not a government agency and not a law firm. Final-paycheck deadlines, penalties and non compete rules change — every figure here carries the date we verified it. Confirm the current rule with your state labor department or a licensed attorney before you act.