What is an agreement not to compete?

An agreement not to compete is a contract or a clause that prevents the signee from directly or indirectly competing (e.g. providing the same services in the same area) with the other party. It is usually timed and is often signed between an employer and an employee.

Are non-compete agreements enforceable?

Yes, non-compete agreements are legally binding and therefore enforceable. However, there are caveats. For example the duration and area of the agreement need to be reasonable, the courts may not support a lifetime non-compete. The agreement could also be written in a way that violates the law, which would also make it void.

Am I required to agree to a non-compete contract?

You are not required to agree to a non-compete contract. However, you need to understand the consequences, for example, if a non-compete is a part of your employment contract, you will likely miss out on the job because the company will hire someone else.

Non-Compete Agreement Template

Created by:

[Sender.FirstName][Sender.LastName][Sender.Company]

Prepared for:

[Client.FirstName][Client.LastName]

This Non-Compete Agreement is entered into as of Date by and between [Sender.Company] having its principal place of business located at Address (the “Company”) and [Client.FirstName][Client.LastName] (the “Representative”), both of whom agree to be bound by this Agreement.

WHEREAS, the Company is in the business of Describe Business;

WHEREAS, the Representative and the Company have entered into an agreement whereby the Representative will perform Describe Duties Generally, attached hereto as Exhibit A (the “Representative Agreement”); and

WHEREAS, the Representative agrees to the restrictions described herein as partial consideration for the Company’s promises inherent in the Representative Agreement.

NOW, THEREFORE, in consideration of the mutual covenants and promises made by the parties hereto, the Company and the Representative (each individually a “Party” and collectively the “Parties”) covenant and agree as follows:

Acknowledgment of relationship

The Parties agree and acknowledge that this Agreement is granted in consideration of the promises agreed to in the Representative Agreement.

Non-competition

For the duration of the Representative Agreement and any subsequent agreement executed for the same or similar purpose and for Duration after the termination of such agreements, the Representative shall not work as an employee, officer, director, partner, consultant, agent, owner, or in any other capacity in any competition with the Company. This means that the Representative must not do any of the above for a company that Describe Restricted Type Of Company in Geographic Area.

It bears repeating that you speak to an attorney with regard to the enforceability of the clauses you develop as the laws vary heavily from state to state. For instance, these types of clauses are completely unenforceable in California except in very limited situations.

Representative acknowledgments

he Representative acknowledges that: (a) this Agreement has been specifically bargained between the Parties; (b) the Representative has had the opportunity to obtain legal counsel to review this Agreement; (c) the restrictions imposed are fair, reasonable and necessary to protect the legitimate business interests of the Company; and (d) such restrictions will not place an undue burden upon the Representative’s livelihood in the event of enforcement of the restrictions described.

Applicable law

This Agreement and the interpretation of its terms shall be governed by and construed in accordance with the laws of the State of State and subject to the exclusive jurisdiction of the federal and state courts located in County, State.

IN WITNESS WHEREOF, each of the Parties has executed this Contract, both Parties by its duly authorized officer, as of the day and year set forth below.

[Sender.Company]

MM / DD / YYYY

Signature