A non-compete agreement is a legal contract that prohibits an individual from working for a competing company or starting a competing business for a certain period of time after leaving their current employment. While it is important for companies to protect their proprietary information and prevent employees from taking clients or intellectual property with them when they leave, non-compete agreements have also been criticized for limiting job opportunities and stifling innovation.
Here is an example of a non-compete agreement:
This Non-Compete Agreement (the “Agreement”) is entered into between ABC Company, Inc. (the “Company”) and John Doe (the “Employee”).
1. Scope of Agreement. The Employee agrees that during the term of his/her employment and for a period of one (1) year after termination of employment, he/she will not, directly or indirectly, engage in any work or employment that directly competes with the Company or any of its affiliates.
2. Definition of Competition. For purposes of this Agreement, “competition” shall be defined as any business or activity that is engaged in by the Company or its affiliates at the time of termination of employment or that is planned or contemplated by the Company or its affiliates within the following six (6) months.
3. Notification of Future Employment. If the Employee intends to engage in work or employment that may be in competition with the Company or its affiliates, the Employee agrees to provide the Company with written notice of such intent at least thirty (30) days prior to engaging in such work or employment.
4. Enforcement. The parties agree that any breach of this Agreement will cause irreparable harm to the Company and that the Company shall be entitled to seek injunctive relief, in addition to any other remedies available at law or in equity.
5. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California.
6. Entire Agreement. This Agreement constitutes the entire understanding between the parties and supersedes all prior negotiations and agreements between them. This Agreement may not be modified except in writing signed by the parties.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.
ABC COMPANY, INC.
By: Jane Smith, President
By: John Doe, Employee
While non-compete agreements can be useful for protecting a company’s interests, it is important to carefully consider the language and scope of the agreement to ensure that it does not overly restrict the employee’s future career opportunities. It is also important to ensure that the agreement complies with applicable state laws and regulations, as many states have restrictions on the enforceability of non-compete agreements.