The Non-Compete Agreement: Elements, boilerplate template, and optional clauses

What is a Non-Compete Agreement?

A Non-Compete Agreement is a contract between an employer and an employee that prohibits the employee from working for a competing company or starting their own competing business for a specified period of time after leaving their current job. The purpose is to protect the employer’s trade secrets and client relationships. The terms and restrictions of the agreement may vary depending on the jurisdiction and the industry.

What would a typical non-compete agreement include?

1. Parties: The agreement will identify the parties involved, including the employer or company requiring the non-compete agreement and the employee or other party who will be subject to the restrictions.
2. Definition of Restricted Activities: The agreement will define the activities that the employee is prohibited from engaging in during and after their employment, such as working for a direct competitor or starting a competing business.
3. Geographic Scope: The agreement will specify the geographic area in which the employee is prohibited from engaging in restricted activities. This may be limited to a specific city, state, or region.
4. Time Period: The agreement will specify the length of time that the non-compete restrictions will be in effect. This may be for a certain number of months or years after the employee’s employment ends.
5. Consideration: The agreement will include consideration or compensation that the employee will receive in exchange for agreeing to the non-compete restrictions. This may include a signing bonus or severance payment.
6. Scope of Employment: The agreement will clarify the scope of the employee’s employment and the type of information and intellectual property they will have access to.
7. Exceptions: The agreement may include exceptions to the non-compete restrictions, such as allowing the employee to work in a different industry or with a company that is not a direct competitor.
8. Enforcement and Remedies: The agreement will outline the consequences for violating the non-compete restrictions, including possible injunctions, damages, or other legal remedies.
9. Severability: The agreement will include a severability clause, which means that if one provision of the agreement is found to be unenforceable, the rest of the agreement will remain valid.
10. Governing Law and Venue: The agreement will specify the governing law and venue for any disputes related to the agreement, such as the state or jurisdiction where any legal action must be taken.

This boilerplate NON-COMPETE AGREEMENT template is available at SimpleSignRequest.com

---

NON-COMPETE AGREEMENT

This Non-Compete Agreement (the “Agreement”) is made and entered into on [DATE] by and between [COMPANY NAME], a [STATE OF INCORPORATION] corporation with its principal place of business at [ADDRESS] (the “Company”), and [EMPLOYEE NAME], residing at [ADDRESS] (the “Employee”).

RECITALS

WHEREAS, the Company provides [DESCRIPTION OF SERVICES] and has developed certain confidential and proprietary information, trade secrets, and customer relationships that are vital to the success of its business; and

WHEREAS, the Employee has been employed by the Company and has had access to the Company’s confidential and proprietary information, trade secrets, and customer relationships;

NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, the parties agree as follows:

1. Non-Compete Obligations

(a) During the Employee’s employment with the Company and for a period of [SPECIFY TIME FRAME] after the Employee’s employment ends, the Employee shall not, directly or indirectly, engage in any business or provide any services that are competitive with the Company’s business in [SPECIFY GEOGRAPHIC AREA]. (b) For purposes of this Agreement, “competitive business” means [SPECIFY RESTRICTED ACTIVITIES].

2. Consideration

In exchange for the Employee’s agreement to the non-compete obligations set forth in Section 1, the Company shall provide the Employee with [SPECIFY CONSIDERATION].

3. Exceptions

The non-compete obligations set forth in Section 1 shall not apply if the Employee obtains the prior written consent of the Company.

4. Enforcement

The Employee acknowledges that the Company would suffer irreparable harm if the Employee were to breach the non-compete obligations set forth in Section 1, and that the Company shall be entitled to injunctive relief, as well as any other remedies available at law or in equity, to enforce such obligations.

5. Governing Law

This Agreement shall be governed by and construed in accordance with the laws of the State of [STATE], without giving effect to any choice of law or conflict of law provisions.

6. Entire Agreement

This Agreement contains the entire agreement and understanding of the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements and understandings, whether oral or written.

7. Counterparts

This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

Signed: [AUTHORIZED_SIGNATURE]

By Authorized Signatory: [AUTHORIZED_SIGNATORY_NAME] Title: [AUTHORIZED_SIGNATORY_TITLE]

Signed: [EMPLOYEE_SIGNATURE]

By Authorized Signatory: [EMPLOYEE_NAME] Title: [EMPLOYEE_TITLE]  

 

---