Kentucky non-compete law: Creech, consideration and the blue pencil for recruiters

Kentucky enforces employee non-competes that are reasonable and supported by consideration, under case law rather than a general statute. A restraint is reasonable if, given the business, the parties and the circumstances, it gives the employer only fair protection and is not so large as to interfere with the public interest or impose undue hardship on the employee (Hammons v. Big Sandy Claims Service, 1978). The rule that decides many Kentucky cases is consideration: in Charles T. Creech, Inc. v. Brown (2014), the Kentucky Supreme Court held that continued at-will employment alone did not support a non-compete signed mid-job. Courts may blue-pencil an overbroad covenant, and KRS 216.724 bars non-competes for health care agency temps. That is the law as of October 2026; bills to ban non-competes in 2025 and 2026 never left committee.

For a recruiter, the first Kentucky question is not "how broad is it?" but "when did you sign it, and what changed afterward?" The general screen is in non-compete questions for candidates, and the agency-side clauses are in non-solicitation clauses for recruiters.

Does Kentucky have a non-compete statute?

Not a general one. The one statute aimed at non-competes covers health care staffing. KRS 216.724 says a health care services agency shall not "restrict in any manner the employment opportunities of any temporary direct care staff," including "contract buy-out provisions or contract non-compete clauses." A noncompliant contract with temporary direct care staff is "an unfair trade practice" and void under KRS 365.060. The section, created in 2022 and amended effective June 29, 2023, does not apply to contracts placing permanent direct care staff.

Everyone else, from a Louisville account executive to a Lexington software engineer, is judged under case law.

What test do Kentucky courts use?

The standard quoted most often comes from Hammons v. Big Sandy Claims Service (Ky. Ct. App. 1978): an agreement in restraint of trade "is reasonable if, on consideration of the subject, nature of the business, situation of the parties and circumstances of the particular case, the restriction is such only as to afford fair protection to the interests of the covenantee and is not so large as to interfere with the public interests or impose undue hardship on the party restricted." That language is quoted in AWP, Inc. v. Safe Zone Services, a memorandum opinion of the U.S. District Court for the Western District of Kentucky filed March 31, 2022, which found the Kentucky and Ohio tests "very similar."

AWP is a useful warning about who gets bound. A traffic safety company sued former flaggers in Louisville who had signed confidentiality, non-compete and non-solicit agreements, and sued their new employer for tortious interference. The court granted summary judgment to the former employees and the new employer on all of the company's claims, finding the non-compete "grossly overbroad" and noting it would impose undue hardship "on a group of low-wage earners."

Does a covenant signed mid-job need new consideration in Kentucky?

Yes, more than continued employment. In Charles T. Creech, Inc. v. Brown, decided in 2014, Donald Brown had worked for Creech for 18 years when he was asked in 2006 to sign an agreement barring him from working for any competitor for three years after leaving. He signed. Shortly afterward he was moved from salesperson to dispatcher, with no change in salary and fewer responsibilities, and the Court found that he received "no promotion, no increase in wages, and no specialized training."

The Court held there was no consideration. Brown was at-will before he signed and at-will after: "immediately before Brown signed the Agreement, Creech was entitled to fire him for any reason or no reason and immediately after Brown signed the Agreement, Creech was entitled to fire him for any reason or no reason." Because the agreement did not require Creech "to forbear the exercise of some legal right or otherwise result in some detriment to Creech, there was no consideration," and it was not enforceable.

The Court distinguished two earlier cases where "the employment relationship between the parties changed": one where the agreement was part of an employment contract giving the employee new rights, and one where employees received "specialized training as well as promotions and increased wages." For a recruiter, that makes the signing date and what happened afterward the most important facts you collect.

That is the opposite of Ohio, where continued at-will employment is enough consideration under Lake Land Employment Group of Akron v. Columber (2004). For a Northern Kentucky candidate who worked in Cincinnati, or the reverse, which state's law applies can decide the case; see Ohio non-compete law.

Will a Kentucky court narrow an overbroad covenant?

It can. AWP quotes the Court of Appeals in Kegel v. Tillotson (2009) that Kentucky courts "have adopted a 'blue pencil' rule, whereby we are empowered to reform or amend restrictions in a non-compete clause if the initial restrictions are overly broad or burdensome." The power has limits. In AWP the court found that fixing the covenant "would require a wholesale rewriting" and declined, writing that it is not a court's function "to rewrite poorly drafted contracts in toto."

Example only: a Bowling Green sales representative signed, at hire, a five-year covenant covering every state the employer sells in. A Kentucky court could shorten the period and shrink the territory to the counties the representative covered, then enforce that version. The same clause signed in year six with nothing new in return raises the Creech question first.

Does Kentucky limit non-competes for physicians or nurses?

Only through the staffing statute. Employed physicians and nurses are judged under the same reasonableness and consideration rules. A 2024 bill to change that, Senate Bill 324, would have barred health service providers from requiring employees to sign covenants not to compete; its last action was a referral to the Senate Health Services Committee on February 29, 2024.

Kentucky non-compete rules at a glance

What should a recruiter ask a Kentucky candidate?

Ask early in the phone screen, in the same words for every candidate for the role, and write down facts.

KENTUCKY CANDIDATE — restrictive agreements

1. "Have you signed a non-compete, a customer or employee non-solicit,
    or a confidentiality agreement with your current or a past employer?"
2. "When did you sign it: when you were hired, or later?"
3. If later: "Did anything change when you signed or afterward, such
    as a promotion, a raise, a bonus or formal training?"
4. "How long does it last, and what territory or customers does it cover?"
5. "Which customers or accounts did you personally handle?"
6. "Does it say which state's law applies, or where disputes go?"
Always: "We don't want any confidential information, documents or
client lists from your current employer."

• Do not tell a candidate "you got nothing for it, so it's invalid." Whether something changed is a fact question for counsel, and a raise or training may be enough.
• Do not ask what the raise was worth. "There was a promotion and a raise when I signed" is the fact counsel needs.
• Do record "three-year non-compete, signed 2019 mid-employment, promoted the same month" rather than an opinion.

What is the risk to the hiring company?

A covenant that survives both tests can support an injunction keeping the new hire away from customers or territory for a period. AWP also shows that former employers sometimes sue the new employer. The court listed what a Kentucky tortious interference with contract claim requires, citing NCAA v. Hornung (Ky. 1988): a valid contract, that the defendant knew about it, that the defendant intended the breach and caused it, that it had no justifiable reason for interfering, and damages. The new employer in AWP won because the non-compete was unenforceable and causation and damages were not shown; how such a claim plays out for your client is for its counsel.

Lower the risk by telling the client about the covenant before final interviews, giving counsel the signing date and what changed afterward, scoping the first months of the role away from restricted customers, and repeating at the offer call that the company wants no confidential information.

Is Kentucky about to ban non-competes?

Not on the current record. Senate Bill 234 of 2025, "AN ACT relating to non-compete clauses," would have made non-compete clauses unenforceable; its last action was a referral to the Senate Judiciary Committee on February 20, 2025. In 2026, House Bill 813, "AN ACT relating to contracts," would have barred employers from requiring covered employees to sign covenants not to compete; the record shows it was introduced March 2, 2026 and referred to the House Economic Development and Workforce Investment Committee on March 9, 2026, with no later action. Both sessions have ended. Re-check the General Assembly's record when the 2027 session opens.

Where does the federal FTC rule stand?

It does not apply. The FTC's Noncompete Rule page says the rule "is not in effect and it is not enforceable" and notes the August 20, 2024 court order; the Commission voted on September 5, 2025 to dismiss its appeals and accept the vacatur; and a February 12, 2026 notice removed it from the Code of Federal Regulations.

Staffing agencies and their own agreements

Creech applies to your agency as an employer. A covenant your recruiters sign at hire is on firmer ground than one added later with nothing new in return. If you place temporary direct care staff with Kentucky facilities, KRS 216.724 bars non-compete and buy-out clauses with those workers and limits conversion fees; the registration rules are in the Kentucky staffing agency license guide, and fee structures in temp-to-perm conversion fees.

Compare Kentucky's neighbors: Indiana, Tennessee and West Virginia. For the rest of a Kentucky hire, see hiring employees in Kentucky and Kentucky background check laws.

A Kentucky checklist

• Restrictive-agreement question asked of every candidate, in the same words.
• Signing date captured, and whether it was at hire or mid-job.
• For mid-job covenants: any promotion, raise or training that followed, recorded as facts.
• Duration, territory, customers and governing-law clause recorded.
• No assumption that an overbroad covenant is void, or that a mid-job covenant is.
• Health care agency placements checked against KRS 216.724.
• Client told before final interviews; counsel reviews before the offer.