Employee „Do Not Compete‟ Agreement
This agreement is a contract between employer and
employee, prohibiting the employee from working
in the same line of business and area as the
employer for a legitimate period of time after the
employee leaves.
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EXPRESS, IMPLIED, OR OTHERWISE, INCLUDING AS TO THEIR LEGAL EFFECT AND
COMPLETENESS. They are for guidance and should be modified to meet your needs and the
laws of your state. Use at your own risk. Docstoc and anyone who participated in providing or
modifying any form is not creating or entering into an Attorney-Client relationship. Docstoc
does not provide legal advice. The information and forms are not a substitute for the advice of
your own attorney.
EMPLOYEE DO NOT COMPETE AGREEMENT –
GEOGRAPHIC REGIONS
THIS NON-COMPETE AGREEMENT (this "Agreement"), effective as of
________________,201___ (the “Effective Date”), between ___________________
[PROVIDE NAME OF THE COMPANY], a company organized and existing under
the laws of __________________ [PROVIDE STATE OR COUNTRY WHERE THE
COMPANY WAS INCORPORATED AND IS DOING BUSINESS] (the
"Company"), and ________________________[PROVIDE NAME OF THE
EMPLOYEE], residing at _______________________[PROVIDE CITY AND
STATE OF THE EMPLOYEE] (the "Employee").
RECITALS
I. WHEREAS Employee has been offered employment by Company for the position of
_______________[GIVE JOB TITLE OR DESCRIPTION OF EMPLOYEE'S
POSITION] 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 ______ months 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:
{Instruction and Warning: Different states have different standards, regarding what is
and is not a reasonably 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 include a non-compete
clause, it should always do so in consultation with a lawyer who is familiar with local
labor/employment laws. Often, the non-compete clause are very fact-specific (e.g., the
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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 will consult with
qualified legal counsel before relying on such a non-compete clause.}
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. 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
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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.
{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 parties in accordance with this Section
4.1.
If to Company, at: __________________
If to Employee, at: __________________
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{Instruction: Provide full mailing addresses for both parties. Include fax numbers (if
any), as well as e-mail address, if parties will permit email communications.}
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
______________without regard to such state‟s conflicts laws. Parties hereby
expressly consent to the exclusive jurisdiction of the state and federal courts
located within _______ [PROVIDE COUNTY WHERE BOTH PARTIES
AGREE THAT ANY DISPUTE WILL BE HEARD] County, in the state of
__________, USA, 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.
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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.
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 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.
[Name of Company]
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By: __________________
Title:____________________
I have authority to bind this company
ACCEPTED AND AGREED TO:
By: ___________________
Name of Employee: _________________
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