Non-Competition Agreement Sample

A non-competition agreement, also known as a non-compete clause or covenant not to compete, is a legal agreement between an employer and employee where the employee agrees to not enter into a similar profession or trade within a certain geographic area and for a certain time period after leaving their employment. These agreements are becoming increasingly common in various industries to protect companies’ proprietary information, trade secrets, and competitive advantages.

The purpose of a non-competition agreement is to prevent an employee from sharing confidential information with competitors, starting their own competing business, or stealing clients or employees. The agreement is typically signed by both parties and may include various limitations such as duration of the non-compete, geographical location, and the type of work or industry in which the employee is restricted from engaging.

If you are an employer seeking to draft a non-competition agreement, it is important to ensure that it is legally sound and enforceable. Here is a sample of some of the key elements that may be included in a non-compete agreement:

1. Definition of Scope and Duration: The agreement should clearly define the specific role and duties of the employee and the industry in which they are restricted from working. The duration of the non-compete clause should also be defined, typically ranging from six months to several years.

2. Geographic Scope: The agreement should specify the geographical area where the employee is restricted from competing. It could be a specific city, state, or country.

3. Consideration: To ensure that the non-compete agreement is legally enforceable, the employee must receive something of value in return for signing the agreement. This could include a signing bonus, severance pay, or other additional compensation.

4. Confidentiality: The agreement may also include provisions regarding the protection of the employer’s confidential information and trade secrets. This could include a requirement to return all confidential information upon termination of employment or a prohibition on using such information for competitive purposes.

5. Remedy for Breach: The agreement should specify the remedy for a breach, which could include injunctive relief or monetary damages.

It is important to note that non-compete agreements may be unenforceable in certain states. Therefore, it is recommended to consult with an expert in employment law in your state to ensure that it complies with local laws and regulations.

In conclusion, non-competition agreements are an effective way for employers to protect their business interests and intellectual property. While it is important to ensure that such agreements are legally enforceable, it is equally important to be mindful of the impact they may have on an employee’s career prospects. Therefore, it is recommended to strike a balance between protecting your business and allowing your employees to pursue their professional goals.