I'm a new volunteer member of a nonprofit board of directors and am being asked to sign a non-compete agreement. The agreement covers all areas of the nonprofit’s involvement (marriage and family counseling, youth ministry, music, drama, martial arts, etc.) and applies to a 5-mile radius of any office or ministry location and for 5 years after I leave the board. Is it customary to ask a volunteer board member to sign a non-compete agreement?
I am familiar with a few commercial-type nonprofits that utilize non-compete provisions for employees, and you can read a lot of cases about non-compete provisions for physicians employed by nonprofits, especially hospitals that subsidize a physician in establishing a practice in an underserved area. I am not familiar with non-competes being required for board members who are not direct service providers, however, and I would be skeptical about the need or desirability of such an agreement.
Whether it would be enforceable depends on whether there is actually consideration for the agreement, and, if so, whether it is reasonable as to the area covered, types of activities covered, duration, and any other limitations, such as being prevented from being on the board of a different organization that provides such services as well as being prevented from personally providing them.
If I were more interested in assuring that the services are available in the community than in assuring that only this organization or this leader would be in a position to provide them, I think I would decline the opportunity to sign the non-compete.