Noncompete Agreement

Noncompete Agreement

Use this noncompete agreement to prevent departing employees from starting a competing business or going to work for a rival company.

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See below the form for a full product description.

 

Unchangeable Alternate Selection: [sole prop or not]
Label Contract Text
Yes

Identification of Employer and Employee

This agreement (the "Agreement") is entered into by and between  ("Employer") and  ("Employee").

No

Identification of Employer and Employee

This agreement (the "Agreement") is entered into by and between  ("Employer") and  ("Employee").

Employment Status

Alternate Selection
Label Contract Text
New Hire

In consideration of the commencement of Employee's employment with Employer and the compensation that will be paid, Employee and Employer enter into this Agreement.

Existing Employee
Alternate Selection
Label Contract Text
Additional compensation

In consideration of Employee's continued employment with Company and also in consideration of , the receipt and sufficiency of which is acknowledged, Employee and Employer enter into this Agreement.

No additional compensation

In consideration of Employee's continued employment with Company, the receipt and sufficiency of which is acknowledged, Employee and Employer enter into this Agreement.

Confidential Information

In the performance of Employee's job duties with Employer, Employee will be exposed to Employer's Confidential Information. "Confidential Information" means information or material that is commercially valuable to Employer and not generally known in the industry. Employee shall keep Confidential Information, whether or not prepared or developed by Employee, in the strictest confidence. Employee will not disclose such secrets to anyone outside Employer without Employer's prior written consent. Nor will Employee make use of any Confidential Information for Employee's own purposes or the benefit of anyone other than Employer.

However, Employee shall have no obligation to treat as confidential any information which: (a) was in Employee's possession or known by Employee, without an obligation to keep it confidential, before such information was disclosed to Employee by Employer; (b) is or becomes public knowledge through a source other than Employee and through no fault of Employee; or (c) is or becomes lawfully available to Employee from a source other than Employer. 

Noncompetition

To protect the Confidential Information while Employee is employed by Employer, and for   thereafter, Employee shall not:

  • plan for, acquire any financial interest in, or perform services for (as an employee, consultant, officer, director, independent contractor, principal, agent or otherwise) any business that would require Employee to use or disclose any Confidential Information; or

  • perform services (as an employee, consultant, officer, director, independent contractor, principal, agent, or otherwise) that are similar to Employee's current duties or responsibilities for any person or entity that, during the term of this Agreement, engages in any business activity in which Employer is then engaged or proposes to be engaged and that conducts its business in the following territory: .

Nonsolicitation

While Employee is employed by Employer, and for  thereafter, Employee shall not:

  • employ, attempt to employ, or solicit for employment by any other person or entity, any Employer employees;

  • encourage any consultant, independent contractor, or any other person or entity to end their relationship or stop doing business with Employer, or help any person or entity do so or attempt to do so;

  • solicit or attempt to solicit or obtain business or trade from any of Employer's current or prospective customers or clients or help any person or entity do so or attempt to do so; or

  • obtain or attempt to obtain any Confidential Information for any purpose whatsoever except as required by Employer to enable Employee to perform his or her job duties.

Confidential Information of Others

Employee will not disclose to Employer, use in Employer's business, or cause Employer to use, any information or material that is a trade secret of others.

Right to an Injunction

A breach or threatened breach of this Agreement may result in irreparable harm such that money damages would be an inadequate remedy and extremely difficult to measure. In addition, the Employer shall be entitled to an injunction to restrain Employee from such breach or threatened breach. Nothing in this Agreement shall be construed as preventing Employer from pursuing any remedy at law or equity for any breach or threatened breach. 

Survivability

This Agreement will survive the termination, for any reason, of Employee's employment with Employer.

Entire Agreement

This is the entire agreement between the parties. It replaces and supersedes any and all oral agreements between the parties, as well as any prior writings. This Agreement may not be amended except in a writing signed by both parties.

Successors and Assignees

This agreement binds and benefits the heirs, successors, and assignees of the parties.

Waiver

The failure to exercise any right provided in this Agreement shall not be a waiver of prior or subsequent rights.

Governing Law

This agreement will be governed by and construed in accordance with the laws of the state of .

Keep Together

Severability

If any court determines that any provision of this agreement is invalid or unenforceable, any invalidity or unenforceability will affect only that provision and will not make any other provision of this agreement invalid or unenforceable and shall be modified, amended, or limited only to the extent necessary to render it valid and enforceable.

Employee has carefully read and considered all clauses of this Agreement and agrees that all of the restrictions set forth are fair and reasonably required to protect Employer's interests. Employer will provide Employee with a copy of this agreement after it is signed by both parties.

Signature:________________________

Date: ______________________

 

Alternate Selection: [sole proprietor or not]
Label Contract Text
Yes


Sole Proprietorship

Signature: _____________________________

Date: _____________________

No




Signature: _____________________________

Date: _____________________

 

 

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When you’re a successful business owner, there’s always the risk that an employee will quit and start a business similar to yours, or move on to a rival business—after learning how to succeed by working for you.

A noncompete agreement—formally called an “Employee Noncompetition and Nonsolicitation Agreement” or sometimes “covenants not to compete” —can prevent former employees from creating, or working for, a competing business.

Important to Know: Noncompete Agreements are Restricted in Some States

California will not enforce a noncompete agreement against employees. And other states—including Alabama, Colorado, Louisiana, Montana, North Dakota, Oklahoma, Oregon, South Dakota and Texas—have laws that limit the use of noncompete agreements. If your business is in one of the states listed here and you want to use a noncompete agreement, consult an employment law expert. 

No matter where your business is located, you may ask an employee to sign a slightly different document, call a "Nondisclosure (Confidentiality) Agreement" which prevents workers from disclosing client lists, processes, secret recipes or techniques—all the special things about your business that give you a leg up on the competition.

Used separately or together, Nolo’s noncompete and nondisclosure agreements can help you protect your hard work, safely and legally.

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