The North Carolina Business Court’s decision in Accelerando, Inc. v. Relentless Solutions, Inc., 2025 NCBC 29 (June 19, 2025) provides a recent and instructive example of how overbroad non-competition provisions can fail under North Carolina law, even at the pleadings stage.
While the court dismissed the employer’s contract claim to the extent it relied on an unenforceable non-compete, it permitted related confidentiality-based contract claims and tortious-interference claims to proceed. The opinion underscores the continued importance of narrow drafting and careful separation of non-compete obligations from confidentiality and trade-secret protections.
Background
Accelerando alleged that a former executive left the company to work for a competitor and used confidential and trade secret information to solicit Accelerando’s customers. The company asserted claims for breach of contract, tortious interference with contractual relations, and unfair and deceptive trade practices.
The restrictive covenant at issue prohibited the former employee, for a period of 24 months, from “directly or indirectly” providing competitive services to any company customer, client, or account. The agreement contained no meaningful geographic limitation and provided little clarity regarding the scope of prohibited services.
The Business Court’s Non-Compete Analysis
The Business Court held that the non-competition provision was unenforceable as a matter of law because it was unreasonably broad and insufficiently defined.
Overbreadth and lack of clarity
The court emphasized several defects:
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The prohibition on “directly or indirectly” competing extended the restraint beyond permissible bounds under North Carolina law.
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The agreement failed to define what “services” were restricted and did not specify who would determine whether services were “competitive in nature.”
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The reference to “any” customer or client was ambiguous and potentially extended to customers the employee never served, never knew, or who became customers after the employee’s departure.
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The absence of a geographic limitation rendered the restriction effectively unlimited in scope.
Taken together, these deficiencies deprived the employee of fair notice and imposed restraints greater than necessary to protect legitimate business interests.
Refusal to apply the blue-pencil doctrine
Notably, the court declined to apply North Carolina’s blue-pencil doctrine to salvage the covenant. Instead, it dismissed the breach-of-contract claim to the extent it was based on the non-competition provision, reinforcing that courts are not required to rewrite overreaching covenants to make them enforceable.
Claims That Survived
Although the non-compete failed, the employer’s case did not end there.
Confidentiality-based contract claim
The court allowed the breach-of-contract claim to proceed insofar as it was based on alleged violations of the agreement’s confidentiality provisions. The dismissal applied only to the non-competition component of the contract claim.
Tortious interference and unfair competition
The court also allowed the tortious-interference claim to proceed. While North Carolina recognizes a privilege to compete, that privilege applies only when competition is carried out through lawful means. Allegations that a former employee used confidential or trade secret information to solicit customers were sufficient to defeat dismissal at the pleadings stage.
Because the tortious-interference claim survived, the court also permitted the unfair and deceptive trade practices claim under Chapter 75 to proceed.
Practical Implications Under North Carolina Law
This decision offers several important takeaways:
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“Directly or indirectly” language continues to present enforcement risks
The Business Court remains skeptical of non-competes that attempt to restrict indirect competition without clear and narrow limitations. -
Customer-based restrictions must be precisely defined
Ambiguous references to “any customer” can render a covenant unenforceable, particularly when not tied to customers the employee actually served or knew. -
Invalid non-competes do not eliminate all post-employment risk
Confidentiality obligations, trade secret protections, and claims based on unlawful competitive conduct remain viable even when a non-compete fails. -
Employers cannot rely on courts to rewrite defective covenants
Overbreadth may result in dismissal, not judicial modification.
Conclusion
Accelerando, Inc. v. Relentless Solutions, Inc. reinforces long-standing principles of North Carolina restrictive covenant law while illustrating how litigation often shifts to confidentiality and trade-secret theories when non-competes are overreaching.
For employees and executives navigating a transition, enforceability depends not only on whether a non-compete exists, but on how narrowly it is drafted and how competition is conducted after departure.