A North Carolina court has voided a wealth management firm’s non-compete and non-solicit agreements, ruling both clauses stretched too far to be enforceable, according to a report published Wednesday, June 11, 2026.
Non-compete clauses bar departing employees from working for rivals for a set period. Non-solicit provisions go a step further — blocking them from contacting former clients or colleagues. Courts in the state will enforce both, but only when the restrictions are reasonable in scope, geography, and duration. When a firm overreaches, judges throw them out entirely rather than rewrite them.
That’s what happened here. The court found both provisions overbroad, meaning the firm drew its restrictions wider than North Carolina law permits. The ruling leaves the firm without contractual protection against former employees competing for its clients.
North Carolina has seen steady litigation over these clauses in financial services, where client relationships are the core business asset and employee departures often trigger legal fights. Wealth management firms routinely include non-solicits precisely because an advisor who walks out the door can take a book of business with them — sometimes worth millions in annual revenue.
The firm’s name, the identities of the employees involved, and the specific geographic or time restrictions the court found excessive weren’t detailed in the initial report. Whether the firm plans to appeal also wasn’t immediately known.
Reported by hcamag.com. Read the original report.
