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This Non-Compete Agreement (this “Agreement”) is entered into as of ____________ (the “Effective Date”) by and between ____________, with an address at ____________ (the “Company”), and ____________, residing at ____________ (“Covenantor”), in connection with Covenantor's employment with the Company. The Company and Covenantor may be referred to individually as a “Party” and together as the “Parties.”
NON-COMPETE AGREEMENTS ARE UNENFORCEABLE OR SIGNIFICANTLY RESTRICTED IN MANY STATES. California, Minnesota, North Dakota, and Oklahoma generally prohibit non-competes for workers altogether (with narrow exceptions, such as the sale of a business). Many other states — including Colorado, Illinois, Maryland, Massachusetts, Nevada, New Hampshire, Oregon, Rhode Island, Virginia, Washington, and the District of Columbia — ban or limit non-competes for employees below certain income thresholds or impose notice, consideration, and duration requirements. Federal regulation in this area, including rulemaking by the Federal Trade Commission, continues to evolve. Both Parties should confirm that this Agreement is lawful in the applicable state before signing, and the Company in particular should consult a licensed attorney. Nothing in this Agreement restricts conduct that applicable law does not permit to be restricted.
Covenantor enters into this Agreement in exchange for the following consideration, the receipt and sufficiency of which Covenantor acknowledges: ____________. Covenantor further acknowledges that in connection with Covenantor's employment with the Company, Covenantor has received or will receive access to the Company's confidential information, customer relationships, and goodwill, and that the restrictions in this Agreement are necessary to protect those legitimate business interests.
During Covenantor's employment and for a period of twelve (12) months after the end of Covenantor's employment with the Company for any reason (the “Restricted Period”), Covenantor shall not, directly or indirectly — whether as an owner, partner, shareholder, member, employee, contractor, consultant, agent, or otherwise — engage in the following activities: ____________ (the “Restricted Activities”), within the following territory: ____________ (the “Restricted Territory”). Nothing in this Section prohibits Covenantor from owning, as a passive investment, less than two percent (2%) of the outstanding securities of a publicly traded company.
During the Restricted Period, Covenantor shall not, directly or indirectly, solicit, divert, or attempt to divert, for a purpose competitive with the Restricted Activities, the business of any customer or client of the Company with whom Covenantor had material contact, or about whom Covenantor received confidential information, during the last twelve (12) months of Covenantor's employment.
During the Restricted Period, Covenantor shall not, directly or indirectly, solicit or induce any employee or contractor of the Company to terminate or reduce their relationship with the Company, or hire for a competing business any such person with whom Covenantor worked, without the Company's prior written consent. General public job postings not targeted at the Company's personnel are not a breach of this Section.
Nothing in this Agreement: (a) prohibits Covenantor from working in fields or territories outside the Restricted Activities and Restricted Territory; (b) restricts Covenantor's right to disclose information to, file a charge with, or participate in an investigation by any government agency; or (c) limits any right that applicable law does not permit to be limited by private agreement, including rights protected by the National Labor Relations Act.
Covenantor acknowledges that the scope, duration, and territory of the restrictions in this Agreement are reasonable and no broader than necessary to protect the Company's legitimate business interests, and that the restrictions will not prevent Covenantor from earning a livelihood. If a court of competent jurisdiction determines that any restriction is overbroad or unenforceable as written, the Parties intend and request that the court modify or “blue pencil” the restriction to the maximum scope, duration, and territory that the court finds reasonable and enforceable, and enforce it as modified, rather than invalidate it entirely.
Covenantor agrees that a breach of this Agreement would cause the Company irreparable harm for which monetary damages would be inadequate. The Company is therefore entitled to seek temporary, preliminary, and permanent injunctive relief for any breach or threatened breach, without the requirement to post a bond, in addition to all other remedies available at law or in equity. If Covenantor breaches any restriction, the Restricted Period for that restriction shall be extended by the duration of the breach, to the extent permitted by law.
This Agreement shall be governed by and construed in accordance with the laws of the State of ____________, without regard to its conflict-of-laws principles.
Any dispute arising out of or relating to this Agreement shall be resolved exclusively in the state or federal courts located in ____________, and each party consents to the personal jurisdiction of those courts.
If any provision of this Agreement is held to be invalid, illegal, or unenforceable, the remaining provisions shall continue in full force and effect, and the invalid provision shall be modified to the minimum extent necessary to make it valid and enforceable.
No failure or delay by either party in exercising any right under this Agreement shall operate as a waiver of that right. A waiver of any breach shall not be construed as a waiver of any subsequent breach.
This Agreement constitutes the entire agreement between the parties with respect to its subject matter and supersedes all prior or contemporaneous understandings, agreements, negotiations, and discussions, whether oral or written. This Agreement may be amended only by a written instrument signed by both parties.
This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument. Signatures delivered electronically (including through a reliable electronic signature service) shall be deemed original signatures for all purposes, consistent with the U.S. ESIGN Act and applicable state law.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date, intending to be legally bound.