Non-Compete Agreement (for Employees)
$0.99
This Non-Compete and Non-Solicitation Agreement can help to protect a company by preventing employees from (1) engaging in competition against the company; (2) disclosing confidential business information about the company; and (3) soliciting customers and employees of the company on behalf of another business enterprise.
Available in editable MS Word. 4 pages.
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This non-compete and non-solicitation agreement contains the following core clauses to protect an employer:
- Covenant not to compete – employee agrees not to engage in business activities that compete with the employer during the time of employment and for a limited period after employment has ended.
- Confidentiality – employee agrees not to disclose the trade secrets, customer lists, and other confidential business information of the employer to third parties.
- Non-solicitation of employees – employee agrees not to solicit any employee or independent contractor of the employer during their employment and for a certain period after his or her employment with employer has ended.
- Non-solicitation of customers after termination – employee agrees not to solicit the employer’s customer for a certain period immediately after his or her employment with employer has ended.
Contents
- Term of Agreement
2. Limitations of this Agreement
3. Covenant Not to Compete
4. Confidentiality
5. Non-Solicitation of Employees
6. Non-Solicitation of Customers After Termination
7. Injunctive Relief
8. Severable Provisions
9. Modifications
10. Prior Understandings
11. Governing Law
12. Jurisdiction and Venue
How to Use
How to Use
(1) Fill in the blanks with the appropriate information.
(2) Remove the yellow bracketed highlights.
(3) Review the document carefully to ensure it conforms with the parties’ agreement before signing.
FAQs
When should this Non-Compete and Non-Solicitation Agreement be used?
It should be used upon hiring a new employee, by making it a condition for the employee to get the job. Providing a job in exchange for the employee’s promise of non-competition and non-solicitation should suffice to satisfy the legal requirement of “consideration” – meaning an exchange of benefits – necessary for making a valid contract.
Should I require all my employees to sign a non-compete and non-solicitation agreement?
It depends. Non-compete and non-solicitation agreements are typically used in connection with managerial employees, executives, officers, and employees engaged in research and development or sales who have access to trade secrets, proprietary business information, and personal relationships with customers. It is usually not necessary to require employees such as filing clerks, secretaries, cashiers, warehouse packers, and other employees who are unlikely to compete with the company or to solicit company customers to sign a non-compete and non-solicitation agreement.
How enforceable are non-compete and non-solicitation agreements?
The enforceability of non-compete and non-solicitation agreements varies from state to state, as they may interfere in an employee’s ability to freely engage in the employment of their choosing or to make a living. In California – the most restrictive state – non-compete agreements are effectively unenforceable, and non-solicitation agreements are unenforceable except to the extent the former employee is competing using the employer’s trade secrets. In most other states, non-compete and non-solicitation agreements may be enforced if they are reasonable. To stand a better chance of being enforced, a non-compete clause should be reasonable in terms of time and scope, such as limiting the term of the non-competition to no more than one or two years and limiting the scope to the same geographic area where the employee had worked.
What happens if some of the clauses in the Non-Compete and Non-Solicitation Agreement are deemed unenforceable?
If one or more of the provisions are deemed unenforceable, the other provisions in the Agreement may still be enforced. The “Severable Provisions” clause in the Non-Compete and Non-Solicitation Agreement states that if any of the provisions are deemed unenforceable, either in whole or in part, the other provisions are nevertheless enforceable.
How enforceable is the confidentiality clause?
In general, a confidentiality clause may be enforced if it is reasonable in scope, protects an employer’s legitimate business interests, and protects information that is confidential and valuable.
What state should I put down for “Jurisdiction and Venue” in the Agreement?
The parties can agree to any county and state with respect to jurisdiction and venue. Commonly, the county and state where the employer is located is listed as the place for jurisdiction and venue.
