VIEWS: 7,755 PAGES: 8 CATEGORY: Employee Confidentiality Agreements POSTED ON: 10/17/2007
This document sets forth an agreement between an employer and an employee whereby the employee agrees to not pursue a similar profession or trade in competition against the employer. This agreement prohibits the employee from working in the same line of as the employer for a certain number of months after the employee?s term of employment is terminated. This agreement also has a clause limiting the geographic scope of the non-compete. This form contains both standard clauses and opportunities for the use of optional terms and conditions making it fully customizable to fit the needs of the contracting parties.
Employee Non-Compete Agreement Within Geographic Region This document sets forth an agreement between an employer and an employee whereby the employee agrees to not pursue a similar profession or trade in competition against the employer. This agreement prohibits the employee from working in the same line of as the employer for a certain number of months after the employee’s term of employment is terminated. This agreement also has a clause limiting the geographic scope of the non-compete. This form contains both standard clauses and opportunities for the use of optional terms and conditions making it fully customizable to fit the needs of the contracting parties. EMPLOYEE NON-COMPETE AGREEMENT WITHIN GEOGRAPHIC REGION THIS NON-COMPETE AGREEMENT (hereinafter the “Agreement”), effective as of _____________, 201__ (the “Effective Date”), between _______________ [Instruction: Insert the name of the employer], a company organized and existing under the laws of __________________ [Instruction: Insert name of state or country where the company was incorporated and is doing business] (the “Company”), and ________________________ [Instruction: Insert name of the employee], residing at _______________________ [Instruction: Insert name of the city and state of the employee’s residence] (the “Employee”), (hereinafter collectively referred to as the “Parties”). RECITALS I. WHEREAS Employee has been offered employment by Company for the position of _______________ [Instruction: Insert job title or description of employee's position] and has entered into an agreement accepting said position (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 ______ [Instruction: insert number of months] months after termination of the term of employment (the “Restrictive Period”), whether such termination is 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. Specifically, it is agreed that the Employee shall not: __________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________ [Instruction and Warning: Describe specific activities that the parties agree that the Employee will not engage in. NOTE: Different states have different standards, regarding what is and is not a reasonable non-compete restriction. The general rule is: The longer the time period of the non-compete restriction and the larger the area where the person may not compete, the more likely a court is to rule that the non-compete clause is NOT valid. If a company feels that it makes good business sense to require a non-compete © Copyright 2013 Docstoc Inc. 2 agreement, it should always do so in consultation with a lawyer who is familiar with local labor/employment laws. Often, non-compete agreements are very fact-specific (e.g., the type of work the employee will be doing; what sort(s) of confidential information that employee will receive while working for the company; what job prospects he or she will have if the non-compete clause is allowed to be enforced, etc. Therefore, unfortunately, it is impossible to predict what restrictions will and will not be found to be valid or invalid. Again, it is strongly encouraged that a company consult with qualified legal counsel before relying on such a non-compete clause. Sections 1.1 through 1.4 below are examples of restrictions that can be used.] 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 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 © Copyright 2013 Docstoc Inc. 3 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 __________________________ , [Instruction: insert applicable state] (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 (__%)[Instruction: insert percentage number] of its gross revenues from such geographic area prior to the date of the expiration or termination of the Agreement. [Note and Warning: See the previous note – the larger the geographic area where the non- compete applies, the more likely it is that a court will refuse to enforce it.] 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 Company may also recover punitive damages to the extent permitted by law. In the event that monetary damages are an inadequate remedy for any harm suffered by the Company as a result of a breach of this Agreement by the Employee, the Company may also seek other relief, including an order of specific performance or injunctive relief. 3.2. The Employee further agrees to indemnify and hold the Company harmless from any damages, losses, costs or liabilities (including legal fees and the costs of enforcing this indemnity agreement) arising out of or resulting from failure of the Employee to abide by the terms of this Agreement. 4. MISCELLANEOUS 4.1. Notices. All notices and other communications required or permitted under this Agreement shall be in writing and shall be either hand delivered by messenger in person, sent by facsimile, sent by certified or registered first-class mail, postage pre-paid, or sent by nationally recognized express courier service. Such notices and other communications shall be effective upon receipt delivered by messenger or sent by facsimile, five days after mailing if sent by mail, and one day after dispatch if sent by express courier, to the following addresses, or such other addresses as any party may notify the other party in accordance with this Section 4.1. If to Company, at: __________________ If to Employee, at: __________________ [Instruction: Provide full mailing addresses for both parties. Include fax numbers (if any), as well as e-mail addresses, if parties will permit email communications.] © Copyright 2013 Docstoc Inc. 4 4.2. Amendments. This Agreement may not be changed or modified, in whole or in part, except by a writing signed by the party against whom enforcement of the change or modification is sought. 4.3. Successors and Assigns. This Agreement and all rights and obligations hereunder are personal to Employee and may not be transferred or assigned by Employee at any time. Company may assign its rights, together with its obligations hereunder, to any entity or person. 4.4. Governing Law and Jurisdiction. This Agreement will be governed by and interpreted according to the substantive laws of the State of ______________ [Instruction: insert applicable state] without regard to such state’s conflicts laws. Parties hereby expressly consent to the exclusive jurisdiction of the state and federal courts located within __________ [Instruction: insert applicable state] County, in the state of State of ______________ [Instruction: insert applicable state], with respect to the interpretation and enforcement of the provisions of this Agreement. 4.5. No Waiver. No failure on the part of Company or Employee to exercise any power, right, privilege or remedy under this Agreement, and no delay on the part of Company or Employee in exercising any power, right, privilege or remedy under this Agreement, shall operate as a waiver of such power, right, privilege or remedy; and no single or partial exercise of any such power, right, privilege or remedy shall preclude any other or further exercise thereof or of any other power, right, privilege or remedy. Neither Company nor Employee shall be deemed to have waived any claim arising out of this Agreement, or any power, right, privilege or remedy under this Agreement, unless the waiver of such claim, power, right, privilege or remedy is expressly set forth in a written instrument duly executed and delivered on behalf of such party; and any such waiver shall not be applicable or have any effect except in the specific instance in which it is given. 4.6. Severability. Employee and Company recognize that the limitations contained herein are reasonably and properly required for the adequate protection of the interests of Company. If for any reason a court of competent jurisdiction or binding arbitration proceeding finds any provision of this Agreement, or the application thereof, to be unenforceable, the remaining provisions of this Agreement will be interpreted so as best to reasonably effect the intent of the Parties. The Parties further agree that a court of competent jurisdiction is authorized to replace any such invalid or unenforceable provisions with valid and enforceable provisions designed to achieve, to the maximum extent possible, the business purposes and intent of such unenforceable provisions, all other provisions continuing in full force and effect. 4.7. Counterparts. This Agreement may be executed in counterparts which when taken together will constitute one instrument. Any copy of this Agreement with the original signatures of all Parties appended will constitute an original. © Copyright 2013 Docstoc Inc. 5 4.8. Headings. The headings contained in this Agreement are for convenience of reference only, shall not be deemed to be a part of this Agreement and shall not be referred to in connection with the construction or interpretation of this Agreement. 4.9. Entire Agreement. This Agreement constitutes the entire understanding and agreement of the Parties hereto with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements or understandings, inducements or conditions, express or implied, written or oral, between the Parties with respect to the subject matter hereof. 4.10. Binding Effect. This Agreement will be binding upon Employee and Employee’s representatives, executors, administrators, estate, heirs, successors and assigns, and will inure to the benefit of Company and its successors and assigns. The Parties agree that this Agreement shall not be interpreted against either party solely because this Agreement was drafted by attorneys for, or on behalf of, or for the benefit of, Company. 5. ACKNOWLEDGMENT By signing this Agreement, the Employee acknowledges that, in consideration of the substantial benefits the Employee will receive as the Company's employee, the terms contained in this Agreement are necessary and reasonable in all respects and that the restrictions imposed on the Employee are reasonable and necessary to protect the Company's legitimate business interests. Additionally, the Employee hereby acknowledges and agrees that the restrictions imposed on the Employee by this Agreement will not prevent the Employee from obtaining employment in its field of expertise or cause the Employee undue hardship. [Note: The above paragraph will almost certainly NOT "save" the validity of an otherwise invalid non-compete clause, if a court were to determine that the wording of the non- compete clause is too restrictive or punitive and would actually operate to prevent Employee from finding future work during the period of the non-compete clause.] IN WITNESS WHEREOF, the Parties have executed this Agreement as of the day and year first above written. ACCEPTED AND AGREED TO: By: ______________________________________ Name of Employee: _________________ [Instruction: insert the name of the Employee] __________________________ [Instruction: Insert Business Name] By: ______________________________________ © Copyright 2013 Docstoc Inc. 6 Name: ____________________ [Instruction: insert the name of the person signing on behalf of the employer] Title: ____________________ [Instruction: insert the title of the person signing] I have authority to bind this company © Copyright 2013 Docstoc Inc. 7
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