This is an agreement that is entered into between a company and an employee that
restricts the employee?s ability to compete with the company. The agreement prohibits
the employee from directly competing with the company during the term of his or her
employment and for a certain time after the employment relationship has ended.
Additionally, this agreement is limited in geographic scope so that it will not be unfair to
the employee. This document should be used by small businesses or other entities that
want to limit competition from employees.
EMPLOYEE NON-COMPETE AGREEMENT
THIS NON COMPETE AGREEMENT (this “Agreement”), effective as of ____________, 20__
(“Effective Date”), between ___________________, a company (the “Company”) organized and
existing under the laws of __________________ (Insert State), and
________________________ (the “Employee”), residing at _______________________(Insert
Address).
RECITALS
I. WHEREAS Employee has been offered employment by Company for the position of
_______________and has entered into an agreement (the “Employment Agreement”);
II. WHEREAS parties deem it in their respective interests to enter into an agreement
providing the obligation of non-compete for the Employee.
WITNESSETH
In consideration of the mutual promises and agreements contained herein, and for other
good and valuable consideration, the receipt of which is hereby acknowledged, the parties
hereto agree as follows:
1. COVENANT NOT TO COMPETE
Employee hereby agrees that, during the term of employment under the Employment
Agreement and for a period of ________ (____) year(s) thereafter (the “Restrictive
Period”), whether with or without good cause or for any or no cause, at the option either
of the Company or the Employee, with or without notice, the Employee will not compete
with the Company and its successors and assigns, without the prior written consent of the
Company. The Employee shall not:
1.1. Alone, with and/or through others, be, become or function as an officer, director,
Employee, owner, corporate affiliate, salesperson, co-owner, partner, trustee, promoter,
founder, technician, engineer, analyst, employee, agent, representative, distributor, re-
seller, sub-licensor, supplier, investor or lender, consultant, advisor or manager of or to,
or otherwise acquire or hold any interest in or otherwise engage in the provision of
services to, any person or entity that engages in a business that is Directly Competitive
(as defined below); provided, however, that Employee may work exclusively for a
division, entity or subgroup of such a business if the division, entity or subgroup is not
Directly Competitive; or
1.2. Authorize Employee’s name to be used in connection with a business that is Directly
Competitive;
For purposes of this Agreement, “Directly Competitive” means developing,
manufacturing, providing, marketing, distributing or otherwise commercially exploiting
any products, services or technology that compete with the Company’s products, services
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or technology in existence as of the Effective Date or the foregoing products, services or
technology as such may be developed, enhanced or modified by the Company after the
Effective Date.
1.3. Engage in or participate in, directly or indirectly, any business conducted under any
name that shall be the same as or similar to the name of the Company or any trade name
used by it that is (i) Directly Competitive (or indirectly) with the business of the
Company or (ii) engaged in any related activity where the use of such name is reasonably
likely to result in confusion; and
1.4. Transfer, sell, assign, pledge, hypothecate, give, create a security interest in or lien on,
place in trust (voting or otherwise), or in any other way dispose of more than 1% of total
outstanding shares of the Company as of the date of said disposition in one or a series of
related transactions directly owned of record by the Employee to any person which is
competitive with any significant aspect of the business of the Company, which,
measured by revenue generated, accounts at least 10% of the Company's business.
2. LIMITED GEOGRAPHIC SCOPE
2.1. This Agreement shall cover the Employee’s activities in every part of the Territory in
which the Employee may conduct business during the term of the Employment
Agreement. “Territory” shall mean (i) all counties in the State of
__________________________, (ii) all other states of the United States of America and
(iii) all other countries of the world; provided that, with respect to clauses (ii) and (iii) in
this paragraph, the Company derives at least ___ percent (__%) of its gross revenues
from such geographic area prior to the date of the expiration or termination of the
Agreement.
3. VIOLATION OF THIS AGREEMENT
3.1. In the event the Employee does not comply with the terms of this Agreement, the
Company reserves the right to discharge the Employee as an employee. Furthermore, the
Company reserves the right to recover monetary damages from the Employee, and the