Free Sample Non-Competition Agreement Template

To help you grow your business, we've created a fairly simple yet reliable non-compete agreement template in Word and PDF versions so you can use it over and over.

What's in this model?

• Restricted type of work.

• Restricted Terms.

• Jurisdiction.

• Duration of agreement.

What is a non-compete agreement?

A non-competition contract is a legal agreement or a clause in a contract specifying that an employee must not compete with an employer after the end of the period of employment. These contracts also prohibit the employee from revealing proprietary information or secrets to other parties during or after employment.

Many contracts specify a certain length of time that the employee is prohibited from working with a competitor after their employment ends. Employers can require employees to sign non-competition contracts to maintain their place in the market. The people required to sign these contracts can be employees, contractors and consultants.

The validity and enforceability of a non-compete clause varies by jurisdiction and may require the former employer to continue to pay the ex-employee base salary during the non-compete period.

What is non-competition?

Non-competition is the prohibition, imposed by an employee on his employer, to undertake competitive activities after the end of their employment contract. In other words, it prevents the employee from carrying out his professional activity in a branch close to the sector in which he worked.

The duration generally varies between 6 and 12 months after the end of the employment contract.

An employee who signs a non-compete agreement and wants to quit their job could be sued by their employer for breach of contract. The sanction provided for is the nullity of the non-competition contract.

Non-competition may also be required by a candidate for a job before being hired. In this case, the employer must provide the candidate with the terms of the non-competition clause so that the latter can study them before signing the employment contract.

What are the types of non-competition contracts?

No type of contract is mandatory. However, the parties may use standard forms prepared by the Ministry of Labor.

There are four types of non-competition contracts:

• The simple non-competition contract, which can be signed by an employee before his retirement;

• The renewable non-competition contract, which is a non-competition contract entered into for a maximum period of one year;

• The permanent non-competition contract, which can be signed by an employee before his retirement and which applies from the day of the employee's retirement;

• The temporary non-competition contract, which can be signed by an employee before his retirement and which applies from the day of the employee's retirement.

Why should I have a non-compete agreement?

A non-compete agreement prevents employees from competing with you during or after employment. It prevents employees from entering markets or professions with you.

Advantage:

• Protects a company's trade secrets: Non-compete agreements can prevent employees from passing sensitive information to a competitor.

• May reduce turnover: Companies with non-compete agreements may suit workers who are less willing to change jobs.

• May incentivize an employer to provide expensive training: the chances are reduced that an employee will pick up the skills learned in expensive training and take them to another company

Disadvantages:

• Can reduce a worker's bargaining power: about 37% of workers are asked to sign a non-compete agreement after starting work, despite having little influence and closing the door to others opportunities.

• Can cause a worker to leave a field entirely, taking their expertise with them: Non-competition can have a negative effect on the workforce by preventing top talent from using their skills and experience, essentially forcing them to leave the domain.

Which sectors use non-compete agreements?

Non-competition contracts are common in the media. A TV station might have legitimate fears that a popular weather forecaster could siphon off viewers if they start working for a rival station in the same area. In most jurisdictions, this would be considered reasonable cause to sign a non-compete agreement.

Non-competitions are also common in the information technology (IT) industry, where employees are often tasked with proprietary information that may be considered valuable to a business. Other places where these contracts are found include the financial industry, the corporate world, and manufacturing.

Non-competition or non-disclosure agreements:

Non-compete agreements are distinct from non-disclosure agreements (NDAs), which generally do not restrict an employee from working for a competitor. Instead, NDAs prevent the employee from revealing information that the employer considers proprietary or confidential, such as customer lists, underlying technologies, or information about products in development.

Important Terms

What should a standard non-competition agreement contain?

A standard non-compete agreement should include the following elements:

• Name of employer.

• Employee name.

• Restricted type of work.

• Restricted Terms.

• Jurisdiction.

• Duration of agreement.

Does a non-competition agreement need to be notarized?

No. There is no statutory or common law requirement that a non-competition agreement be notarized. It must be signed by the party against whom enforcement is sought to be enforceable, although

How enforceable is a non-compete agreement?

Non-competition agreements are often limited or unenforceable because they are so restrictive. They are illegal in California unless you are selling a business. Other states apply certain provisions, such as protection of trade secrets, but not work restrictions

How long are non-competition agreements valid?

The time limit for non-competition agreements must be of a reasonable length and is generally determined by the state. Non-competition agreements typically last two to three years.