Fillable Printable Employee Non-Compete Agreement

Employee Non-Compete Agreement

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Employee Non-Compete Agreement

This introductory paragraph lists the date and the parties to this Agreement. We formatted this

agreement uniquely to make it easy on others (judge, arbitrator(s), etc. God forbid) to readily

understand who is involved, when the agreement begins and some basic summary background

information.

Effective Date [Date]

between [Company Legal Name], (“[Company]”)

a [State] [Corporation/Partnership/Sole Proprietorship/Resident],

located at [Address]

[City], [State] [Zip Code]

and [Employee] (“Employee”)

a [State] [Corporation/Partnership/Sole Proprietorship/Resident]

located at [Address].

Summary

Employee desires to give, and [Company] desires to receive from Employee, a covenant not to engage,

either directly or indirectly, in competition with, or to solicit any customer, client, or account of,

[Company].

[Company] and Employee desire to set forth in writing the terms and conditions of their agreements and

understandings.

Employer or [Company], as used in this Agreement, shall include any corporation or entity which is at

any time a parent or subsidiary of [Company].

NOW, THEREFORE, in consideration of the foregoing, of the mutual promises herein contained, and of

other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the

parties hereto, intending legally to be bound, hereby agree as follows:

1. Covenants Against Competition

Employee acknowledges that the services to be rendered to [Company] have a significant and material

value to [Company], the loss of which cannot adequately be compensated by damages alone. In view of

the significant and material value to [Company] of the services of Employee for which [Company] has

employed Employee; and the confidential information obtained by or disclosed to Employee as an

employee of [Company]; and as a material inducement to [Company] to employ Employee and to pay to

Employee compensation for such services to be rendered for [Company] by Employee (it being

understood and agreed by the parties hereto that such non-competition shall also be paid for and received

in consideration hereof), Employee covenants and agrees as follows:

A. During Employee's employment by [Company] and for a period of [Restriction Period] after Employee

ceases to be employed by [Company], Employee shall not within [Restricted Area] directly or indirectly,

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either for Employee’s own account or as a partner, shareholder (other than shares regularly traded in a

recognized market), officer, employee, agent or otherwise, be employed by, connected with, participate

in, consult or otherwise associate with any other business, enterprise or venture that is the same as, similar

to or competitive with [Company]. By way of example, and not as a limitation, the foregoing shall

preclude Employee from soliciting business or sales from, or attempting to convert to other sellers or

providers of the same or similar products or services as provided by [Company], any customer, client or

account of [Company] with which Employee has had any contact during the term of employment.

B. During employment and for a period of [Non-Solicitation Period] thereafter, Employee shall not,

directly or indirectly, solicit for employment or employ any employee of [Company].

C. During employment, and thereafter [Confidentiality Period], Employee shall not disclose to anyone

any Confidential Information. For the purposes of this Agreement, "Confidential Information" shall

include any of [Company]'s confidential, proprietary or trade secret information that is disclosed to

Employee or Employee otherwise learns in the course of employment such as, but not limited to, business

plans, customer lists, financial statements, software diagrams, flow charts and product plans. Confidential

Information shall not include any information which; (i) is or becomes publicly available through no act

of Employee, (ii) is rightfully received by Employee from a third party without restrictions; or (iii) is

independently developed by Employee.

2. At-Will Employment

Employee acknowledges that Employee's employment is “at will,” subject to applicable law, and that

either [Company] or Employee may terminate employment at any time, with or without notice, for any

reason or no reason whatsoever. Nothing in this Agreement shall constitute a promise of employment for

any particular duration or rate of pay.

3. Accounting for Profits

Employee covenants and agrees that, if Employee shall violate any covenants or agreements in Section 1

hereof, [Company] shall be entitled to an accounting and repayment of all profits, compensation,

commissions, remunerations or benefits which Employee directly or indirectly has realized and/or may

realize as a result of, growing out of or in connection with any such violation; such remedy shall be in

addition to and not in limitation of any injunctive relief or other rights or remedies to which [Company] is

or may be entitled at law or in equity or under this Agreement.

4. Reasonableness of Restrictions

A. Employee has carefully read and considered the provisions of Section 1 hereof and, having done so,

agrees that the restrictions set forth therein (including, but not limited to, the time period of restriction and

the geographical areas of restriction) are fair and reasonable and are reasonably required for the protection

of the interests of [Company], its officers, directors, shareholders and other employees.

B. In the event that, notwithstanding the foregoing, any part of the covenants set forth in Section 1 hereof

shall be held to be invalid or unenforceable, the remaining parts thereof shall nevertheless continue to be

valid and enforceable as though the invalid or unenforceable parts had not been included therein. In the

event that any provision of Section 1 relating to time period and/or areas of restriction shall be declared

by a court of competent jurisdiction to exceed the maximum time period or areas such court deems

reasonable and enforceable, the agreed upon time period and/or areas of restriction shall be deemed to

become and thereafter be the maximum time period and/or areas which such court deems reasonable and

enforceable.

5. Burden & Benefit

This Agreement shall be binding upon, and shall inure to the benefit of, [Company] and Employee, and

their respective heirs, personal and legal representatives, successors and assigns.

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7. General Provisions

The General Provisions that follow are fairly standard. These provisions enhance the balance of the

Agreement by defining certain common issues such as notice, assignment, legal remedies, waiver,

and attorney fees, etc..

7.1 Non-Solicitation. Neither party shall solicit for employment or hire the other’s current or future

employees, either directly or indirectly, during the Term of this Agreement, without obtaining the other’s

prior written approval. Should an employee change employment from one party to the other, the new

employer shall pay the old employer a fee equivalent to Twenty Percent (20%) of the employee’s new

compensation, annualized for the first year.

You must decide which state governs this Agreement and where any legal action would be taken.

Generally, it is your (company’s) state of residence.

7.2 Governing Law & Jurisdiction. This agreement and the parties’ actions under this Agreement

shall be governed by and construed under the laws of the state of [State], without reference to conflict of

law principles. The parties hereby expressly consent to the jurisdiction and venue of the federal and state

courts within the state of [State]. Each party hereby irrevocably consents to the service of process in any

such action or proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid,

to such party at its address set forth in the preamble of this Agreement, such service to become effective

thirty (30) days after such mailing.

This Agreement is intended to be the only Agreement and that no other documents or

communications are binding. Therefore, it is very important to make sure that everything [Company]

and [Client] have agreed to is included in this Agreement. Otherwise, it is as if it were not agreed to.

7.3 Entire Agreement. This Agreement, including the attached exhibits, constitutes the entire

Agreement between both parties concerning this transaction, and replaces all previous communications,

representations, understandings, and Agreements, whether verbal or written between the parties to this

Agreement or their representatives. No representations or statements of any kind made by either party,

which are not expressly stated in this Agreement, shall be binding on such parties.

Any changes to this Agreement must be in writing and signed by the party against whom that

writing is to be used.

7.4 All Amendments in Writing. No waiver, amendment or modification of any provisions of this

Agreement shall be effective unless in writing and signed by a duly authorized representative of the party

against whom such waiver, amendment or modification is sought to be enforced. Furthermore, no

provisions in either party’s purchase orders or in any other business forms employed by either party will

supersede the terms and conditions of this Agreement.

All notices between the parties must be in writing and either delivered in person or by certified or

registered mail, return receipt requested.

7.5 Notices. Any notice required or permitted by this Agreement shall be deemed given if sent by

registered mail, postage prepaid with return receipt requested, addressed to the other party at the address

set forth in the preamble of this Agreement or at such other address for which such party gives notice

hereunder. Delivery shall be deemed effective three (3) days after deposit with postal authorities.

In the event of a lawsuit or any legal proceeding involving this Agreement, the losing party will have

to pay the winning party his or her costs and expenses, including reasonable attorney fees.

7.6 Costs of Legal Action. In the event any action is brought to enforce this Agreement, the prevailing

party shall be entitled to recover its costs of enforcement including, without limitation, attorneys’ fees and

court costs.

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Legal remedies, i.e., money damages, may not be sufficient; therefore, both parties agree to

equitable remedies such as an injunction where the breaching party would be required to do or not

to do something.

7.7 Inadequate Legal Remedy. Both parties understand and acknowledge that violation of their

respective covenants and Agreements may cause the other irreparable harm and damage, that may not be

recovered at law, and each agrees that the other’s remedies for breach may be in equity by way of

injunctive relief, as well as for damages and any other relief available to the non-breaching party, whether

in law or in equity.

Assuming the parties wish to use Arbitration in the event of a dispute, the following section should

be included. You take your chances with an arbitrator, but it keeps legal costs down and keeps you

out of a drawn out legal process.

7.8 Arbitration. Any dispute relating to the interpretation or performance of this Agreement shall be

resolved at the request of either party through binding arbitration. Arbitration shall be conducted in

[County], [State] in accordance with the then-existing rules of the American Arbitration Association.

Judgment upon any award by the arbitrators may be entered by any state or federal court having

jurisdiction. Both parties intend that this Agreement to arbitrate be irrevocable.

Merely delaying to bring an action that one party has a right to bring does not cause that party to

lose or waive his right to pursue that action.

7.9 Delay is Not a Waiver. No failure or delay by either party in exercising any right, power or remedy

under this Agreement, except as specifically provided in this Agreement, shall operate as a waiver of any

such right, power or remedy.

Neither party will be blamed if there is a problem resulting from something beyond its control, such

as an earthquake, flood, war.

7.10 Force Majeure. In the event that either party is unable to perform any of its obligations under this

Agreement or to enjoy any of its benefits because of any Act of God, strike, fire, flood, governmental

acts, orders or restrictions, Internet system unavailability, system malfunctions or any other reason where

failure to perform is beyond the reasonable control and not caused by the negligence of the non-

performing party (a “Force Majeure Event”), the party who has been so affected shall give notice

immediately to the other party and shall use its reasonable best efforts to resume performance. Failure to

meet due dates resulting from a Force Majeure Event shall extend such due dates for a reasonable period.

However, if the period of nonperformance exceeds sixty (60) days from the receipt of notice of the Force

Majeure Event, the party whose ability to perform has not been affected may, by giving written notice,

terminate this Agreement effective immediately upon such notice or at such later date as is therein

specified.

This section limits the ability of either party to transfer any of its rights or delegate any of its duties

to third parties.

You want to make sure that you can sell your business along with all of the relationships you have

developed along the way. (Often these relationships can add tremendous value to your business

and you want to make sure that all of your agreements can be transferred to the new owners.) I

wouldn’t want to seek (let alone pay for) permission to sell my company.

Generally, neither party may assign their respective rights to a third party; however, with the

possible exception of assignment to a successor corporation or partnership, either party may

transfer its rights or obligations under this Agreement without the approval of the other party. This

Agreement would be binding on the 3

party.

However, you may want to limit each other’s ability to pass along this deal to another possibly

unknown and possibly unfriendly entity. The second paragraph prevents unauthorized transfer of

responsibilities…

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CHOOSE one or the other of these two following paragraphs.

7.11 Assignability & Binding Effect. Except as expressly set forth within this Agreement, neither party

may transfer or assign, directly or indirectly, this Agreement or its rights and obligations hereunder

without the express written permission of the other party, not to be unreasonably withheld; provided,

however, that both parties shall have the right to assign or otherwise transfer this Agreement to any

parent, subsidiary, affiliated entity or pursuant to any merger, consolidation or reorganization, provided

that all such assignees and transferees agree in writing to be bound by the terms of this Agreement prior

to such assignment or transfer. Subject to the foregoing, this Agreement shall be binding upon and inure

to the benefit of the parties hereto, their successors and assigns.

--Or –

This paragraph DOES NOT ALLOW either party to transfer its rights to a successor company

without prior approval.

7.12 Non-Assignability & Binding Effect. Except as otherwise provided for within this Agreement,

neither party may assign any of its rights or delegate any of its obligations under this Agreement to any

third party without the express written permission of the other. Any such assignment is deemed null and

void.

If any part of this Agreement is unenforceable or invalid, the balance of the Agreement should still

be enforced. Basically, ignore any sections that are invalid.

7.13 Severability. If any provisions of this Agreement are held by a court of competent jurisdiction to

be invalid under any applicable statute or rule of law, they are to that extent to be deemed omitted and the

remaining provisions of this Agreement shall remain in full force and effect.

The headings of the various sections are meant to explain or otherwise give meaning to those

sections; they are for convenience only.

7.14 Cumulative Rights. Any specific right or remedy provided in this Agreement will not be exclusive

but will be cumulative upon all other rights and remedies described in this section and allowed under

applicable law.

7.15 Headings. The titles and headings of the various sections and sections in this Agreement are

intended solely for convenience of reference and are not intended for any other purpose whatsoever, or to

explain, modify or place any construction upon or on any of the provisions of this Agreement.

Every copy shall be just as valid as the original.

7.16 Counterparts. This Agreement may be executed in multiple counterparts, any one of which will be

considered an original, but all of which will constitute one and the same instrument.

Even after the termination of the Agreement, the parties may still have certain responsibilities such

as keeping information confidential.

7.17 Survival of Certain Provisions. The warranties and the indemnification and confidentiality

obligations set forth in the Agreement shall survive the termination of the Agreement by either party for

any reason.

Understood, Agreed & Approved

We have carefully reviewed this contract and agree to and accept all of its terms and conditions. We are

executing this Agreement as of the Effective Date above.

[Company] Employee

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______________________________________ _____________________________________

[Owner/Founder] [Employee Name]

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