But the former leaders' countersuit paints their workplace very differently
A North Carolina court has refused to enforce an employer's non-compete, calling it too broad - a warning for HR teams that write restrictive covenants.
On July 23, 2026, the North Carolina Business Court refused to enforce a non-competition clause an autism-therapy company had used to try to stop two former leaders from competing. The judge called it "facially overbroad" and unenforceable as written.
The problem was the drafting. The court flagged three flaws. The clause blocked the former leaders from working "directly or indirectly" in the field, a phrase North Carolina judges keep refusing to enforce. It never defined the "geographic area" it covered. And it reached any place the company was "actively planning to" do business, wording the court found too vague.
The company asked the judge to narrow the clause with the "blue pencil" doctrine. He declined, noting it had not raised the argument in its brief and had waived it. The lesson for HR: a court may not rescue a sloppy non-compete, and the fix must be requested the right way.
The ruling hit only the non-compete. The company's related non-solicitation and confidentiality terms were not challenged as overbroad and survived, a reminder that the pieces of a restrictive-covenant package stand or fall on their own terms.
The clause sat inside a larger fight among the owners and former officers of a healthcare group. The company alleges its former general counsel, who also served as chief executive, secretly built a competing hospice and therapy venture, sent a confidential financial model to an outside firm, and tried to poach staff. The court let those claims - breach of fiduciary duty, trade-secret misappropriation and interference with contracts - move forward.
The former executives tell a different story. Their counterclaim alleges the group's majority owner ran the workplace around his own religious beliefs. According to the filing, he built a "Culture Test" to check whether employees were "living a Christian lifestyle," threatened to fire those who skipped weekly "prayer call" events, and pushed staff to attend his church. The filing also alleges he tried to take adverse action against two employees over their "religious beliefs and sexual orientations," and that several workers resigned "due to harassment."
The court did not decide who was right. It ruled only on which claims can proceed, dismissing some - including an unfair-trade-practices counterclaim tied to the terminations - and keeping others alive. Because the ruling came on motions to dismiss, the court made no findings of fact. The allegations on both sides remain unproven, and the case now moves toward its next stage.
