"Non-compete Agreement Template"

What Is a Non-Compete Agreement?

A Non-Compete Agreement, often incorrectly referred to as a "Noncompete Agreement," is a legal contract signed between two parties, employers and employees, where they have agreed on the fact that the individual will not enter into competition with the company where they work, during or after their employment. It means that an employee who has signed this type of agreement cannot work for a competitor of their former employer or disclose any proprietary information. The information that is not supposed to be disclosed is defined in the agreement.

Most states recognize non-compete agreements, however before signing one an individual should check the state law of where they reside in order to understand if there are any legal restrictions dedicated to the agreement's duration, territory of coverage, consideration payment, etc.

You can download our Non-Compete Agreement template through the link below or create your own document with our online form-builder.

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How to Write a Non-Compete Agreement?

A standard Non-Compete Agreement consists of several parts, the most important ones include the following:

  • Introduction. In the first part of the document, an applicant must designate the parties that are entering the agreement. Most agreements use terms like Employer and Employee, or Company and Individual;
  • The time period when the agreement is in force. Here a filer must state when parties are entering the agreement and for how long an individual is restricted from working with any competing businesses. The restricted period might be presented by a number of years or end with a specific date;
  • The subject. In this part applicants must report what kind of business an individual is restricted from. A filer must give a full description of the business in order to avoid any misunderstandings, and name all of the actions that an employee is not allowed to perform;
  • Territory limitations. Businesses use this part of the document to report the territory upon which an individual is not allowed to compete with them. It can be presented in miles or in the name of the state;
  • Consideration payment. This part of the agreement requires parties to agree on a Compensation for Non-Compete Agreement that an employer will pay to an employee for entering and not violating it (if applicable);
  • Damages. In the last part of the document, a filer must designate what kind of sanctions the employee will face if they violate the agreement.

In addition to the mentioned sections, a Noncompete Agreement can also include parts dedicated to severability, legal fees, applicable law and jurisdiction, representatives, etc.

How to Negotiate a Non-Compete Agreement?

Usually, employees are asked to sign an Employee Non-Compete Agreement after they have applied for a position and successfully passed the interview. Getting the position means that they will get access to certain types of confidential information, which an employer is trying to protect.

If an employee is asked to sign this kind of agreement, they should spend a significant amount of time reviewing it. It's important to pay attention to the territory and the time period upon which they are not allowed to enter into competition with their employer. During the negotiation process, they should try to narrow it down as much as possible to protect their rights.

Another important part of the agreement is the section where an employer describes the actions and the nature of the business that are restricted for the employee. Companies tend to broaden it and restrict bigger areas than are actually necessary to protect.

How to Get Out of a Non-Compete Agreement?

The only way to get out of a Non-Compete Agreement is to go to court. However, the results of the litigation will depend on the state where the agreement was signed. Some states tend to question the necessity of non-compete agreements and narrow them down, while others take them more seriously and protect the employer's rights. The general tendency is that non-compete agreements are in disfavor right now, so, depending on the circumstances, an employee might get away with violating the agreement. Keep in mind that situations will vary depending on the case.

What Happens If You Violate a Non-Compete Agreement?

If an individual has violated a Non-Compete Agreement, they must be ready to meet some consequences. However, the consequences will depend on the actions the other party is willing to make. A possible repercussion can include litigation as an employer is likely to sue an employee for a violation of this agreement. The further consequences, in this case, will be ruled on by a judge, who base their opinion on state law and state tendencies towards non-compete agreements. Nevertheless, an employee might meet no repercussions at all, if the employer won't file a lawsuit against them.

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Download "Non-compete Agreement Template"

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Non-Compete Agreement
This ​ N on-Compete Agreement (hereinafter referred to as the “Agreement”) is entered
into as of __________________ by and between __________________________, with a
mailing address of ________________________________________________________
(hereinafter referred to as the “Employer”) and __________________________, with a
mailing address of ________________________________________________________
(hereinafter referred to as the “Employee”), collectively referred to as the “Parties,” both
of whom agree to be bound by this Agreement.
1. Restricted Business. The Employee acknowledges that the Employer’s primary
business is ______________________________________________________________
(hereinafter referred to as the “Restricted Business”). The Employee shall be restricted
from competing with the Employer in the the Employer's primary business area.
2. Restricted Period. The Employee shall be restricted from competing with the
Employer for a period of __________________
upon the termination of their
relationship with the Employer (hereinafter referred to as the “Restricted Period”).
3. Restricted Territory. ​ T he Employee shall be restricted from competing with
Employer within a __________________ radius from Employer’s primary business
location at ______________________________________________________________
(hereinafter referred to as the “Restricted Territory”).
4. Restrictions. During the Restricted Period and within the Restricted Territory, the
Employee shall not, directly or indirectly, own, operate, join, manage, control, finance or
participate in the ownership, management, operation, control or financing of, or be
connected as an officer, director, employee, partner, principal, agent, representative, or
consultant of any entity engaged in the Restricted Business, without the prior, written
consent of the Employer.
5. Non-Solicitation. The Employee agrees not to solicit any other employee or
independent contractor of the Employer for the benefit of another business enterprise, nor
shall the Employee induce another employee or independent contractor associated with
the Employer to terminate employment.
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Non-Compete Agreement
This ​ N on-Compete Agreement (hereinafter referred to as the “Agreement”) is entered
into as of __________________ by and between __________________________, with a
mailing address of ________________________________________________________
(hereinafter referred to as the “Employer”) and __________________________, with a
mailing address of ________________________________________________________
(hereinafter referred to as the “Employee”), collectively referred to as the “Parties,” both
of whom agree to be bound by this Agreement.
1. Restricted Business. The Employee acknowledges that the Employer’s primary
business is ______________________________________________________________
(hereinafter referred to as the “Restricted Business”). The Employee shall be restricted
from competing with the Employer in the the Employer's primary business area.
2. Restricted Period. The Employee shall be restricted from competing with the
Employer for a period of __________________
upon the termination of their
relationship with the Employer (hereinafter referred to as the “Restricted Period”).
3. Restricted Territory. ​ T he Employee shall be restricted from competing with
Employer within a __________________ radius from Employer’s primary business
location at ______________________________________________________________
(hereinafter referred to as the “Restricted Territory”).
4. Restrictions. During the Restricted Period and within the Restricted Territory, the
Employee shall not, directly or indirectly, own, operate, join, manage, control, finance or
participate in the ownership, management, operation, control or financing of, or be
connected as an officer, director, employee, partner, principal, agent, representative, or
consultant of any entity engaged in the Restricted Business, without the prior, written
consent of the Employer.
5. Non-Solicitation. The Employee agrees not to solicit any other employee or
independent contractor of the Employer for the benefit of another business enterprise, nor
shall the Employee induce another employee or independent contractor associated with
the Employer to terminate employment.
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6. Consideration. The Employer agrees to pay and the Employee agrees to accept
$_________________ as consideration to enter into this Agreement.
7. Confidential Information. ​ “ Confidential Information” shall mean any and all
technical and non-technical information provided by the Employer, including but not
limited to, any data, files, accounts, reports or any proprietary information in any way
related to products, databases, plans, services, processes, methods, research,
development, programs, software, authorship, customer lists, suppliers, marketing and/or
advertising plans, vendor lists, methods, reports, analysis, financial or statistical
information, and any other material related or pertaining to the Employer’s business, their
subsidiaries, respective clients, consultants or vendors that may be disclosed to the
Employee herein contained within the terms of the Agreement.
The Employee also will not use any of this confidential information for their personal
benefit at any time. This section remains in full force and effect even after termination of
the Agreement by its natural termination or the early termination by either Party. The
Employee will not share any of this confidential information at any time.
8. Acknowledgments. The Employee acknowledges that the restrictions, prohibitions
and other provisions of this Agreement, including the Restricted Period and Restricted
Territory, are reasonable, fair and equitable in scope, terms and duration, are necessary to
protect the legitimate business interests of the Employer, and are a material inducement
the to Employer to enter into this Agreement.
9. Representations and Warranties. Both Parties represent that they are fully
authorized to enter into this Agreement. The performance and obligations of either Party
will not violate or infringe upon the rights of any third-party or violate any other
agreement between the Parties, the Employee, and any other person, organization, or
business or any law or governmental regulation.
10. Severability. ​ I n the event that any provision of this Agreement is deemed invalid or
unenforceable, in whole or in part, that part shall be severed from the remainder of the
Agreement and all other provisions should continue in full force and effect as valid and
enforceable.
11. Non-Waiver. ​ T he failure of either Party to insist upon the strict compliance with and
performance of any of the terms, conditions, and covenants hereof shall not be deemed as
a relinquishment or waiver of any rights or remedy that said Party may have, nor shall it
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be construed as a waiver of any subsequent breach or default of the terms, conditions, and
covenants herein contained, but the same shall continue to be in full force and effect. No
waiver of either Party shall be deemed to have been made unless expressed in writing and
duly signed by the waiving Party.
12. Legal Fees. In the event of a dispute resulting in legal action, the successful Party
will be entitled to its legal fees, including, but not limited to its attorneys’ fees.
13. Legal and Binding Agreement. ​ T his Agreement is legal and binding between the
Parties as stated above. This Agreement may be entered into and is legal and binding both
in the United States and throughout Europe. The Parties each represent that they have the
authority to enter into this Agreement.
14. Entire Agreement. ​ T he Parties acknowledge and agree that this Agreement
represents the entire agreement between the Parties. In the event that the Parties desire to
change, add, or otherwise modify any terms, they shall do so in writing to be signed by
both Parties.
15. Governing Law. The Parties agree that this Agreement shall be governed by the laws
of ______________________.
S tate
The Parties agree to the terms and conditions set forth above as demonstrated by their
signatures as follows:
EMPLOYER
EMPLOYEE
Name: _____________________
Name: _____________________
Signed: ____________________
Signed: ____________________
Date: ______________________
Date: ______________________
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