Non-Compete Agreement Between Employer and Employee

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Non-Compete Agreement Between Employer and Employee Powered By Docstoc
					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
       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


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       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 5.1.

       If to Company: __________________

       If to Employee: __________________

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 _______ 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 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.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year
first above written.




[Company]

By:

  --------------------------------

Title:




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ACCEPTED AND AGREED TO:



By:

 --------------------------------

Name:




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DOCUMENT INFO
Description: 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.
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