{
  "type": "practice-guide",
  "canonical": "https://openagreements.org/practice-guides/non-compete/us/guam",
  "links": [
    {
      "rel": "self",
      "href": "https://openagreements.org/practice-guides/non-compete/us/guam.json",
      "type": "application/json"
    },
    {
      "rel": "alternate",
      "href": "https://openagreements.org/practice-guides/non-compete/us/guam",
      "type": "text/html"
    },
    {
      "rel": "alternate",
      "href": "https://openagreements.org/practice-guides/non-compete/us/guam/markdown",
      "type": "text/markdown"
    },
    {
      "rel": "alternate",
      "href": "https://openagreements.org/practice-guides/non-compete/us/guam/json",
      "type": "application/json"
    }
  ],
  "data": {
    "topic": "non-compete",
    "state": "guam",
    "frontmatter": {
      "title": "Non-Competes in Guam",
      "description": "Guam voids employee non-compete agreements by statute — 18 GCA § 88105 derives from former California Civil Code § 1673 and is virtually identical to California's Business and Professions Code § 16600 — and the Supreme Court of Guam reads it as a per-se ban, leaving only narrow sale-of-business and partnership-dissolution exceptions.",
      "state": "Guam",
      "lastReviewed": "2026-06-03",
      "license": "CC BY 4.0",
      "authors": [
        "steven-obiajulu"
      ],
      "summary": {
        "enforceability": "banned",
        "bottomLine": "Guam voids employee non-competes by statute — 18 GCA § 88105, a transplant of California's restraint-of-trade rule that the Supreme Court of Guam reads as a per-se ban — leaving only narrow sale-of-business and partnership-dissolution exceptions.",
        "keyLaw": "18 GCA § 88105; Island Eye Ctr., Inc. v. Lombard, 2020 Guam 32",
        "exceptions": "Sale of business good will (§ 88106); partnership dissolution (§ 88107)",
        "courtNarrowing": "no",
        "appliesToContractors": "unclear",
        "extendedForBreach": "Not addressed",
        "maxLength": "Not applicable (employee covenant void regardless of duration)",
        "noticeRequirement": "None",
        "incomeThreshold": "None",
        "saleOfBusiness": "Allowed within a narrow statutory exception — a seller of business goodwill may agree not to compete in a specified district while the buyer operates there",
        "customerNonSolicit": "Likely void: Guam adopts California's § 16600 restraint rule, so a customer non-solicit carries the same void risk as a non-compete (predicted; no Guam holding squarely on point)",
        "employeeNonSolicit": "Void risk but unsettled: the Supreme Court of Guam left facial validity open, while the adopted § 16600 framework voids employee non-solicits"
      },
      "about": [
        "Guam non-compete agreements",
        "Guam restrictive covenants",
        "18 GCA Section 88105 restraint of trade",
        "Guam California Business and Professions Code Section 16600 analogue",
        "Island Eye Center v. Lombard Supreme Court of Guam",
        "Guam sale-of-business and partnership non-compete exceptions",
        "Guam customer and employee non-solicitation",
        "Guam trade secret 9 GCA Section 43.10"
      ],
      "translations": [
        {
          "language": "中文",
          "status": "planned"
        },
        {
          "language": "Español",
          "status": "planned"
        },
        {
          "language": "Português",
          "status": "planned"
        },
        {
          "language": "Deutsch",
          "status": "planned"
        }
      ]
    },
    "questions": [
      {
        "slug": "employee-non-compete-enforceability",
        "label": "Are employee non-competes enforceable?",
        "heading": "Are employee non-compete agreements enforceable in Guam?",
        "answerText": "No. Guam voids employee non-compete agreements by statute. Title 18 of the Guam Code Annotated, section 88105, makes every contract that restrains someone from exercising a lawful profession, trade, or business void to that extent, except for two narrow statutory exceptions — and in Island Eye Center, Inc. v. Lombard the Supreme Court of Guam read that language as a per-se ban.",
        "sources": [
          {
            "id": "stat-88105",
            "authorityType": "primary-law",
            "tier": "primary-source-backed",
            "title": "18 GCA § 88105 — Contracts in Restraint of Trade",
            "citation": "18 GCA § 88105.",
            "url": "https://col.guamcourts.gov/sites/default/files/18gc088.pdf",
            "proposition": "Section 88105 voids every contract by which anyone is restrained from exercising a lawful profession, trade, or business, except as provided in the two following sections (sale of good will and partnership dissolution).",
            "verbatimQuote": "Every contract, by which anyone is restrained from exercising a lawful profession, trade, or business of any kind, otherwise than is provided in the next two sections, is to that extent void.",
            "anchor": "https://openagreements.org/practice-guides/non-compete/us/guam#src-stat-88105"
          },
          {
            "id": "ie-first-time",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "Island Eye Center, Inc. v. Lombard",
            "citation": "Island Eye Ctr., Inc. v. Lombard, 2020 Guam 32.",
            "url": "https://case-law.vlex.com/vid/island-eye-ctr-v-1039283384",
            "proposition": "Island Eye is the first decision of the Supreme Court of Guam to interpret 18 GCA § 88105, the territory's restraint-of-trade provision.",
            "verbatimQuote": "This is the first time we have been asked to interpret our restraint-of-trade provision.",
            "date": "2020-12-31",
            "anchor": "https://openagreements.org/practice-guides/non-compete/us/guam#src-ie-first-time"
          },
          {
            "id": "ie-derived",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "Island Eye Center, Inc. v. Lombard",
            "citation": "Island Eye Ctr., Inc. v. Lombard, 2020 Guam 32.",
            "url": "https://case-law.vlex.com/vid/island-eye-ctr-v-1039283384",
            "proposition": "The Supreme Court of Guam held that 18 GCA § 88105 derives from former California Civil Code section 1673, now California Business and Professions Code section 16600, so California case law interpreting section 16600 is persuasive.",
            "verbatimQuote": "Our statute is derived from California Civil Code section 1673, since replaced by California Business and Professions Code section 16600.",
            "date": "2020-12-31",
            "anchor": "https://openagreements.org/practice-guides/non-compete/us/guam#src-ie-derived"
          },
          {
            "id": "ie-policy",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "Island Eye Center, Inc. v. Lombard",
            "citation": "Island Eye Ctr., Inc. v. Lombard, 2020 Guam 32.",
            "url": "https://case-law.vlex.com/vid/island-eye-ctr-v-1039283384",
            "proposition": "The court held that section 88105 evidences a public policy for employee mobility and every citizen's right to pursue lawful employment, mirroring California's open-competition policy.",
            "verbatimQuote": "Therefore, we hold that section 88105 evidences public policy for employee mobility and every citizen's right to pursue lawful employment or enterprise of his or her choice.",
            "date": "2020-12-31",
            "anchor": "https://openagreements.org/practice-guides/non-compete/us/guam#src-ie-policy"
          },
          {
            "id": "ie-void-holding",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "Island Eye Center, Inc. v. Lombard",
            "citation": "Island Eye Ctr., Inc. v. Lombard, 2020 Guam 32.",
            "url": "https://case-law.vlex.com/vid/island-eye-ctr-v-1039283384",
            "proposition": "The court held that the employee's post-employment non-compete terms were a restraint of trade in violation of 18 GCA § 88105 and void to that extent — striking the covenant rather than reforming it.",
            "verbatimQuote": "These post-employment terms are undoubtedly a restraint of trade in violation of 18 GCA § 88105 and are to that extent void.",
            "date": "2020-12-31",
            "anchor": "https://openagreements.org/practice-guides/non-compete/us/guam#src-ie-void-holding"
          },
          {
            "id": "shelton-void",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "Shelton v. Guam Service Games",
            "citation": "Shelton v. Guam Service Games, 239 F.2d 902 (9th Cir. 1956).",
            "url": "https://www.courtlistener.com/opinion/241093/austin-j-shelton-v-guam-service-games-a-copartnership/",
            "deepLink": "https://www.courtlistener.com/opinion/241093/austin-j-shelton-v-guam-service-games-a-copartnership/#:~:text=Since%20this%20agreement%20attempted%20to,is%20to%20that%20extent%20void.",
            "proposition": "Applying Guam's restraint-of-trade statute, the Ninth Circuit held a covenant restraining a person from the coin-machine business throughout the Territory of Guam void, rejecting the argument that common-law partial-restraint reasonableness could save it.",
            "verbatimQuote": "Since this agreement attempted to make the prohibition and restraint complete within the Territory of Guam, it is to that extent void.",
            "date": "1956-09-07",
            "anchor": "https://openagreements.org/practice-guides/non-compete/us/guam#src-shelton-void"
          }
        ]
      },
      {
        "slug": "non-solicitation",
        "label": "Are non-solicitation clauses enforceable?",
        "heading": "Are customer and employee non-solicitation clauses enforceable in Guam?",
        "answerText": "Neither sits on firm ground, and a customer non-solicitation clause likely shares the non-compete's fate. No Guam decision squarely rules on a customer non-solicitation clause, but because Island Eye adopted California's section 16600 framework — under which a covenant that forecloses a former employee's ability to compete for business is an impermissible restraint — a customer non-solicit likely carries the same void risk. For clauses barring the solicitation of a former employer's staff, the Supreme Court of Guam expressly left the question of facial validity open in Island Eye.",
        "sources": [
          {
            "id": "q2-ie-postemp",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "Island Eye Center, Inc. v. Lombard",
            "citation": "Island Eye Ctr., Inc. v. Lombard, 2020 Guam 32.",
            "url": "https://case-law.vlex.com/vid/island-eye-ctr-v-1039283384",
            "proposition": "The court adopted California's interpretation that post-employment covenants not to compete are impermissible restraints violating the section 16600 / section 88105 rule, relying on Edwards (which invalidated a former-client service restriction); the court did not separately decide the validity of a customer non-solicitation clause.",
            "verbatimQuote": "California courts interpret post-employment covenants not to compete as impermissible restraints of trade which violate section 16600.",
            "date": "2020-12-31",
            "anchor": "https://openagreements.org/practice-guides/non-compete/us/guam#src-q2-ie-postemp"
          },
          {
            "id": "q2-ie-concede",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "Island Eye Center, Inc. v. Lombard",
            "citation": "Island Eye Ctr., Inc. v. Lombard, 2020 Guam 32.",
            "url": "https://case-law.vlex.com/vid/island-eye-ctr-v-1039283384",
            "proposition": "In Island Eye, the employer conceded that employee non-solicitation (anti-raiding) clauses are typically invalidated under California law as unlawful restraints of trade.",
            "verbatimQuote": "Island Eye concedes that employee non-solicitation clauses are typically invalidated under California law as unlawful restraints of trade.",
            "date": "2020-12-31",
            "anchor": "https://openagreements.org/practice-guides/non-compete/us/guam#src-q2-ie-concede"
          },
          {
            "id": "q2-ie-facial",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "Island Eye Center, Inc. v. Lombard",
            "citation": "Island Eye Ctr., Inc. v. Lombard, 2020 Guam 32.",
            "url": "https://case-law.vlex.com/vid/island-eye-ctr-v-1039283384",
            "proposition": "Because of the employer's concession, the court limited the appeal and did not decide whether employee non-solicitation clauses facially violate 18 GCA § 88105 — leaving the facial-validity question open.",
            "verbatimQuote": "Because of Island Eye's concession, the parties' arguments on appeal are limited to whether non-solicitation clauses facially violate 18 GCA § 88105.",
            "date": "2020-12-31",
            "anchor": "https://openagreements.org/practice-guides/non-compete/us/guam#src-q2-ie-facial"
          }
        ]
      },
      {
        "slug": "sale-of-business",
        "label": "Are sale-of-business non-competes allowed?",
        "heading": "Are non-competes tied to the sale of a business enforceable in Guam?",
        "answerText": "Yes, within a narrow statutory exception. Section 88106 lets a person who sells the good will of a business agree not to carry on a similar business within a specified district, city, or a part thereof, so long as the buyer continues a like business there — but courts read the geographic limit strictly.",
        "sources": [
          {
            "id": "stat-88106",
            "authorityType": "primary-law",
            "tier": "primary-source-backed",
            "title": "18 GCA § 88106 — Exception: Sale of Good Will",
            "citation": "18 GCA § 88106.",
            "url": "https://col.guamcourts.gov/sites/default/files/18gc088.pdf",
            "proposition": "Section 88106 permits a seller of business good will to agree not to carry on a similar business within a specified district, city, or part thereof, so long as the buyer carries on a like business there.",
            "verbatimQuote": "One who sells the good will of a business may agree with the buyer to refrain from carrying on a similar business within a specified district, city, or a part thereof, so long as the buyer, or any person deriving title to the good will from him, carries on a like business therein.",
            "anchor": "https://openagreements.org/practice-guides/non-compete/us/guam#src-stat-88106"
          },
          {
            "id": "shelton-goodwill",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "Shelton v. Guam Service Games",
            "citation": "Shelton v. Guam Service Games, 239 F.2d 902 (9th Cir. 1956).",
            "url": "https://www.courtlistener.com/opinion/241093/austin-j-shelton-v-guam-service-games-a-copartnership/",
            "deepLink": "https://www.courtlistener.com/opinion/241093/austin-j-shelton-v-guam-service-games-a-copartnership/#:~:text=By%20no%20theory%20could%20it,or%20any%20major%20portion%20thereof.",
            "proposition": "The Ninth Circuit held that the good-will exception's geographic limit cannot stretch to cover the entire Territory of Guam, so a Territory-wide covenant falls outside the exception and is void under the general ban.",
            "verbatimQuote": "By no theory could it include the entire Territory of Guam or any major portion thereof.",
            "date": "1956-09-07",
            "anchor": "https://openagreements.org/practice-guides/non-compete/us/guam#src-shelton-goodwill"
          }
        ]
      },
      {
        "slug": "partnership-dissolution",
        "label": "Can partners agree not to compete?",
        "heading": "Can partners agree not to compete on dissolution of a Guam partnership?",
        "answerText": "Yes, within the second statutory exception. Section 88107 lets partners, on or in anticipation of dissolving a partnership, agree not to carry on a similar business within the same city or town where the partnership did business, or a specified part of it.",
        "sources": [
          {
            "id": "stat-88107",
            "authorityType": "primary-law",
            "tier": "primary-source-backed",
            "title": "18 GCA § 88107 — Exception: Partnership Agreement",
            "citation": "18 GCA § 88107.",
            "url": "https://col.guamcourts.gov/sites/default/files/18gc088.pdf",
            "proposition": "Section 88107 permits partners, on or in anticipation of dissolution, to agree not to carry on a similar business within the same city or town where the partnership did business, or a specified part thereof.",
            "verbatimQuote": "Partners may, upon or in anticipation of a dissolution of a partnership, agree that none of them will carry on a similar business within the same city or town where the partnership business has been transacted, or within a specified part thereof.",
            "anchor": "https://openagreements.org/practice-guides/non-compete/us/guam#src-stat-88107"
          },
          {
            "id": "q4-stat-88105",
            "authorityType": "primary-law",
            "tier": "primary-source-backed",
            "title": "18 GCA § 88105 — Contracts in Restraint of Trade",
            "citation": "18 GCA § 88105.",
            "url": "https://col.guamcourts.gov/sites/default/files/18gc088.pdf",
            "proposition": "Section 88105 voids every restraint on a lawful profession, trade, or business except as provided in sections 88106 and 88107, so a partnership covenant that exceeds the section 88107 exception is void.",
            "verbatimQuote": "Every contract, by which anyone is restrained from exercising a lawful profession, trade, or business of any kind, otherwise than is provided in the next two sections, is to that extent void.",
            "anchor": "https://openagreements.org/practice-guides/non-compete/us/guam#src-q4-stat-88105"
          }
        ]
      },
      {
        "slug": "liquidated-damages",
        "label": "Can a penalty clause enforce a covenant?",
        "heading": "Can a liquidated-damages or penalty clause back up a Guam covenant?",
        "answerText": "Generally no. Guam's contract statute voids a clause that fixes damages for breach in advance, except where actual damages would be impracticable or extremely difficult to fix — so a penalty bolted onto a covenant cannot do work the covenant itself cannot.",
        "sources": [
          {
            "id": "stat-88103",
            "authorityType": "primary-law",
            "tier": "primary-source-backed",
            "title": "18 GCA § 88103 — Contract Fixing Damages",
            "citation": "18 GCA § 88103.",
            "url": "https://col.guamcourts.gov/sites/default/files/18gc088.pdf",
            "proposition": "Section 88103 makes a contract that fixes the amount of damages for breach in anticipation of the breach void to that extent, except as provided in section 88104.",
            "verbatimQuote": "Every contract by which the amount of damage to be paid, or other compensation to be made, for a breach of an obligation, is determined in anticipation thereof, is to that extent void, except as expressly provided in the next section.",
            "anchor": "https://openagreements.org/practice-guides/non-compete/us/guam#src-stat-88103"
          },
          {
            "id": "stat-88104",
            "authorityType": "primary-law",
            "tier": "primary-source-backed",
            "title": "18 GCA § 88104 — Exceptions",
            "citation": "18 GCA § 88104.",
            "url": "https://col.guamcourts.gov/sites/default/files/18gc088.pdf",
            "proposition": "Section 88104 permits a presumed-damages (liquidated-damages) amount only where, from the nature of the case, it would be impracticable or extremely difficult to fix the actual damage.",
            "verbatimQuote": "The parties to a contract may agree therein on an amount which shall be presumed to be the amount of damage sustained by a breach thereof; when, from the nature of the case, it would be impracticable or extremely difficult to fix the actual damage.",
            "anchor": "https://openagreements.org/practice-guides/non-compete/us/guam#src-stat-88104"
          }
        ]
      },
      {
        "slug": "trade-secrets",
        "label": "What can employers protect instead?",
        "heading": "What can a Guam employer protect instead of a non-compete?",
        "answerText": "Trade secrets and narrowly drawn confidentiality. Guam has not adopted the Uniform Trade Secrets Act, so in Island Eye the Supreme Court of Guam borrowed the trade-secret definition from the territory's criminal code — 9 GCA § 43.10(f) — to govern civil misappropriation claims; that protection guards genuine secrets without restraining the employee's right to compete.",
        "sources": [
          {
            "id": "q6-ie-tradesecret",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "Island Eye Center, Inc. v. Lombard",
            "citation": "Island Eye Ctr., Inc. v. Lombard, 2020 Guam 32.",
            "url": "https://case-law.vlex.com/vid/island-eye-ctr-v-1039283384",
            "proposition": "Because Guam has not adopted the Uniform Trade Secrets Act, the Supreme Court of Guam held, as a matter of first impression, that the trade-secret definition in the criminal code at 9 GCA § 43.10(f) governs civil trade-secret-misappropriation claims.",
            "verbatimQuote": "Therefore, we hold that the definition of trade secrets in 9 GCA § 43.10(f) is the definition of trade secrets for civil trade-secret-misappropriation claims.",
            "date": "2020-12-31",
            "anchor": "https://openagreements.org/practice-guides/non-compete/us/guam#src-q6-ie-tradesecret"
          },
          {
            "id": "q6-ie-shield",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "Island Eye Center, Inc. v. Lombard",
            "citation": "Island Eye Ctr., Inc. v. Lombard, 2020 Guam 32.",
            "url": "https://case-law.vlex.com/vid/island-eye-ctr-v-1039283384",
            "proposition": "The Supreme Court of Guam rejected the inevitable-disclosure doctrine for trade-secret claims, reasoning that it would operate as a de facto covenant not to compete; trade-secret protection must be a shield, not a sword used to render departing employees unemployable in their field.",
            "verbatimQuote": "Trade-secret protection should be a shield, not a sword used by employers to retain its employees by threat of rendering them substantially unemployable in their field of experience or prevent workers from pursuing their livelihoods when they leave their current positions.",
            "date": "2020-12-31",
            "anchor": "https://openagreements.org/practice-guides/non-compete/us/guam#src-q6-ie-shield"
          }
        ]
      }
    ]
  }
}