Fillable Form Non-Compete Agreement

What is a Non-Compete Agreement?

A Non-Compete Agreement is a binding contract between an employer and an employee that prohibits the latter from entering professions or businesses that directly or indirectly competes with the company for a specified time after their working relationship ends.

A Non-Compete Agreement is used to indicate that current and former workers are not allowed to compete with their company by engaging in any business of a similar nature. Some examples of the said engagement may include working as the following for a considered competitor:

• An employee
• An independent contractor
• A business owner
• A business part owner
• A significant investor

The main goal of a Non-Compete Agreement is to avoid competition after the employment period is over. It is also used to ensure the company’s share in the market will not decrease by protecting themselves from former workers leaking confidential information about their:

• Operations
• Clients
• Formulas
• Pricing
• Strategy
• Salary
• Methods and practices
• Future products
• Public relations
• Marketing plans

How to fill out a Non-Compete Agreement?

For your convenience, PDFRun has a Non-Compete Agreement form template that you can use. It should be filled out with the following information:

Effective Date

Enter the day, month, and year when the agreement will take effect.

Non-Competing Party or Recipient

Enter the full legal name of the non-competing party.

Enter the organization affiliated with the non-competing party.

Protected Party

Enter the full legal name of the protected party.

Enter the organization affiliated with the protected party.

Non-Compete Covenant

This section includes the responsibilities of the non-competing party.

Non-Solicitation Covenant

Enter the specific period to determine how long the non-competing party will be prohibited from obtaining current and past clients, customers, employees, and contractors of the protected party.

Enter the specific period to determine how long the non-competing party will be prohibited to directly or indirectly recruit or attempt to recruit any employee of the protected party to terminate his or her employment.

Confidential Information

This section includes the meaning, examples, and limitations of the confidential information disclosed in the agreement.

Entire Agreement

This section includes how the agreement will be treated.

Severability

This section includes that even if there’s any invalid provision, it will not affect the entire agreement; thus, the rest of the contract will remain effective.

Injunctive Relief

This section includes the consequences if the agreement will not be followed accordingly.

Waiver

This section includes that a party’s right to enforce every provision of this agreement will not cease even if either party fails to enforce any provision contained within this agreement.

Governing Law

Enter the state to determine the laws that will be applied to the agreement.

Conflict Resolution

This section includes how the two parties should handle and resolve a dispute.

Protected Party’s Signature

Affix the signature of the protected party.

Protected Party Name or Representative

Enter the full legal name of the protected party.

Job Title

Enter the job title of the protected party.

This is optional.

Company Name

Enter the company name of the protected party.

This is optional.

Date

Enter the date when the protected party signed the agreement.

Recipient’s Signature

Affix the signature of the non-competing party.

Recipient’s Name

Enter the full legal name of the non-competing party.

Date

Enter the date when the non-competing party signed the agreement.

Frequently Asked Questions About a Non-Compete Agreement

What are some tips when writing a non-compete agreement?

If you wish to write a non-compete agreement on your own, here are a few suggestions that might help you in doing so:

Educate yourself with the laws in your state

When writing a non-compete agreement form, make sure that you are not violating any existing laws about trade secrets in your state. Make rigorous research to validate whether the provisions you will include in the contract are legal or not. In some states, they do not recognize non-compete agreements, so be sure to verify if it is allowed to produce and enforce in your country.

Specify what you will prohibit

In order to make sure that you and your employee are on the same page, make sure to clearly determine and state which competitor the employee will not be allowed to work with if they leave the company. You also have to specify the confidential information that the employee is not allowed to share and how he or she must follow it.

Indicate the time period

To determine the duration of effectiveness of the agreement, you must indicate the particular time frame in the document. Keep in mind that long time frames of more than five years are not permitted in several states.

Sign the agreement

After writing the non-compete agreement, the two parties must affix their signatures in order to authenticate it. Because of the sensitivity of these contracts, it is strongly advised that they be signed in the presence of a notary public or to have a witness who is not in any way related to the employer or employee.

Consult an attorney

If you’re having trouble drafting a non-compete agreement, it is recommended to consult an attorney. Getting help from a professional will make your work easier and better. Since they probably already have experience in writing and handling this kind of transaction, they can supply you with the necessary knowledge you’ll be needing to successfully write the agreement.

Why should I write a Non-Compete Agreement?

Writing a Non-Compete Agreement is an important step in providing legal protection for your business. Here are some of the reasons why you should create a non-compete agreement:

• It prevents current and former employees from leaking confidential information about your company to a competitor.
• It helps your company avoid the loss of any valuable employees.
• A written and legally binding document like the non-compete agreement will put your mind at ease. You won't have to keep on worrying about whether or not your employee will keep his or her obligations.
• The possibility of an employee adopting abilities gained through expensive training from your company and applying them to the competitor is lowered.
• Even if you can’t require an employee to sign a non-compete agreement, you still have the choice to terminate or to not hire an employee who refused to sign the agreement if you feel unsafe with his or her non-compliance.

How do I get around a non-compete agreement?

The only way to get out of a non-compete agreement is to get out of the agreement. A non-compete agreement is a form of contract between an employer and employee that prohibits the employee from working for competitive employers. The terms of these agreements vary greatly from state to state, but they typically prohibit employees from working in or starting a new company that provides similar services as their former company within a certain time frame and geographic area.

In some states, non-compete agreements are considered void as a matter of public policy because the restrictions they place on employees are overly broad and unreasonable given their effect on job mobility. In those states, if your employer asks you to sign a contract with a non-compete agreement, be aware that it might not hold up in court. But in most states, like Florida and Texas, non-compete agreements are enforced as long as they are reasonable. What is “reasonable” will depend on the law of your state; some states enforce these agreements under very narrow circumstances while others may enforce them across the board.

The best way to find out whether a non-compete agreement is reasonable in your state is to speak with an attorney. If you are considering leaving your job, it is important to consult with an attorney before doing anything that might violate the terms of your non-compete agreement.

If you are unable to get out of your non-compete agreement, there are a few things you can do to minimize its effects. First, try to identify the specific activities that are prohibited by the agreement. Then, make sure you comply with those restrictions as closely as possible. Finally, keep in mind that non-compete agreements are typically enforced for a limited period of time. Once that time has passed, you will be free to work for competitors.

What voids a non-compete agreement in Massachusetts?

Here are reasons that make a non-compete agreement void:

• The agreement is not reasonable in scope — The agreement must be limited in time, geography, and activity. It cannot be so broad that it prevents an employee from working at all in their chosen field.
• The agreement is not supported by consideration — In order for an agreement to be legally binding, both sides need to receive something. It's up to the employer to prove that an existing or continued employment relationship is enough to support enforcing a non-compete agreement, which is difficult in Massachusetts because of our strong public policy against restricting trade.
• The agreement was obtained through duress or coercion — Employers cannot force employees into signing a non-compete agreement. If an employee is threatened with termination or other negative consequences if they do not sign, the agreement will be considered invalid.
• The agreement violates public policy — Massachusetts has a strong public policy against restrictive covenants, which means that agreements that unreasonably prevent employees from working are not enforceable. This policy is in place to protect employees' right to earn a living and advance their careers.
• The agreement is not specific enough — The terms of the agreement must be clear and concise in order to be enforced. If the agreement is too vague, it will be considered invalid. For example, an agreement that prohibits an employee from working for any employer in the city is not specific enough, as it does not identify exactly what type of work or which companies are restricted.
• The agreement was already breached by an employee before their employment ended — Once an employee leaves a company, they cannot be prevented from engaging in activities that were already happening while they worked for the company. For example, if an employee used a certain client list to provide services before they left and then is prevented from using that same client list after they leave, this would be considered a breach of their previous employment agreement and no new action could be taken against them.
• The agreement was entered into during an employee's first 120 days of employment — An employee may not be held to any non-compete agreements that were not entered into before their first 120th day of employment unless they renewed or modified such an agreement with the same employer.
• The agreement is generally found to be unfair and one-sided by a court — There are some industries where non-compete agreements are more likely to be enforced. If an agreement is found to be substantially unfair, there is a good chance it will not be upheld in court. For example, a non-compete agreement that prohibits a medical professional from practicing their profession for 10 years would probably not be upheld as valid, as it would be considered unreasonable in scope.

What is the purpose of a noncompete agreement?

A non-compete agreement serves as a safeguard for a company, ensuring that its confidential information and trade secrets remain within its walls. Without a non-compete agreement, an employee could leave the company and use its trade secrets or confidential information to compete against it.

Many employers require their employees to sign a non-compete agreement as a condition of employment. However, these agreements can be unenforceable if they are overly restrictive. For example, an agreement that prohibits an employee from working for a competitor in the same industry for five years may be too restrictive and unenforceable.

An agreement that is reasonable in terms of time and geography will likely be held to be enforceable. Courts typically look at a number of factors when determining the reasonableness of a non-compete agreement, including:

• The nature of the business
• The geographic scope of the restriction
• The duration of the restriction
• The extent to which the employee’s skills are unique or special
• The extent to which the employee has access to trade secrets or confidential information

What makes a non-compete agreement valid?

Here are the legal requirements for non-compete agreements to be valid:

• The non-compete agreement must be in writing.
• The non-compete agreement must be signed by both the employee and the employer.
• The non-compete agreement must be reasonable in scope, meaning it can't be too broad or too narrow.
• The non-compete agreement must be reasonable in terms of time, meaning it can't be too long or too short.
• The non-compete agreement must be reasonable in terms of geography, meaning it can't be too broad or too narrow.
• The employer has to provide something of value in exchange for the employee signing the non-compete agreement.
• The employer can't retaliate against the employee for refusing to sign a non-compete agreement.
• If an employer makes an employee sign a non-compete agreement, the employer has to pay at least minimum wage to that employee while he or she is restricted by the non-compete agreement.
• The non-compete agreement may not be against the law of that particular state.
• An employer cannot restrict an employee from working for a company if that same company provides at least 75% of the employee's current employment responsibilities and compensation. For example, XYZ Law Firm can't prevent Joe Smith from going to work for ABC Legal Clinic which provides 75% of his current duties and compensation.
• An employer generally cannot require a non-compete agreement from a new employee, meaning an employee who has not previously worked for that particular employer in any capacity. However, this restriction does not apply to employees working in high-tech fields such as computer programming and software engineering.
• An employer cannot make an employee sign a non-compete agreement as a condition of getting or keeping a bonus, commission, stock options, profit-sharing, or other forms of incentive compensation.
• If a non-compete agreement is found to be unreasonable, courts may reform (change) the terms of the non-compete agreement so that they're reasonable. The court will look at several factors when making this determination, including the type of work involved, how long the restriction will last, and how broad the geographic area is.

What happens if you break a non-compete agreement?

Breaking a non-compete agreement may result in penalties such as fines or even being sued. Moreover, breaking the agreement may also negatively impact your career. Because of this, it is important to fully understand what you are agreeing to before signing a non-compete agreement.

If you have any questions about the agreement, be sure to ask an attorney before signing anything. Doing so can help ensure that you are aware of your rights and responsibilities under the agreement.

Can I get out of non-compete?

You can get out of a non-compete agreement by bringing your case to court. Courts have the power to declare non-compete agreements void or unenforceable if they find that the agreement is unreasonable and harms the public interest.

To win your case, you will need to show that the non-compete agreement is unreasonable. You can do this by arguing that the agreement goes too far in limiting your ability to work. For example, an agreement may be unreasonable if it prohibits you from working in the same field for a period of time when you have no intention of doing so.

How strict are non-compete agreements?

Non-compete agreements are strict legal contracts between a business and an individual who works for that business. Within these agreements are provisions that restrict the activities of the person who signs it for a specific time period once they have left the company. These agreements help to protect businesses from losing trade secrets, clients, or key employees to new competitors in their industry. However, because these agreements can act as a restraint on trade, non-compete agreements are subject to regulations in many US states.

Is two years loo long for a non-compete?

Two years is too long for a non-compete agreement. In general, a non-compete agreement should only be for six months and the longer it is valid, the harder it will be to enforce.

Can I work for a competitor if I signed a non-compete agreement?

When you sign a non-compete agreement, you will not be able to work for a competitor for a specific period of time. This can be a major issue if you are laid off or fired from your job, as you will not be able to work for another company in your industry. In some cases, you may even have to forfeit your severance package if you sign a non-compete agreement.

If you are considering signing a non-compete agreement, it is important to understand the restrictions that are associated with it. You should also consult an attorney to make sure that the agreement is enforceable in your state. Non-compete agreements can be helpful for businesses, as they can protect their trade secrets and other confidential information. However, they can also be harmful to employees, who may not be able to find new employment if they are unable to work for a competitor.

However, there are states such as California, non-compete agreements are generally unenforceable. This means that employees in California can freely work for competitors without fear of repercussions.

Who benefits from a non-compete agreement?

A non-compete agreement should benefit both employer and employee. An employer wants to protect the business interests, time, and investments that were made into a worker. An employee needs to know that they have a certain amount of stability in their job should they choose to leave their current position. Moreover, a non-compete agreement should not be so restrictive that the employee is unable to make a living.

How long are most non-competes?

For non-compete agreements to be enforceable, they should only be valid for a certain time period and should not be too restrictive. In general, they should be for six months or less.

Do you have to disclose a non-compete agreement?

It is important that you disclose to your new employer your existing non-compete agreement from a former employer. Doing so will avoid any potential conflict down the road.

Some employers may require you to sign a new non-compete agreement when you start working for them. This is to protect their business interests in case you decide to leave and work for a competitor. However, if you have an existing non-compete agreement with a former employer, your new employer cannot require you to sign a new non-compete agreement.

Non-compete agreements are not valid if you have already signed one with a previous employer or a competitor. While an employer may be able to ask you to abide by what has been agreed upon in the past, they cannot require you to enter into another non-compete agreement.

Do companies enforce non-compete agreements?

Yes, companies enforce non-compete agreements. They do so to prevent employees from leaving their company, taking some of the company's trade secrets (and other data/customer lists), and working for the competition.

Non-compete agreements are not uncommon. Many companies require them upon hiring an employee or accepting a promotion offer. They may include all types of professional personnel such as sales staff, engineers, and executives.

While non-compete agreements are common, they're not always enforceable in California or by a California employer. And an employee may be able to get around the non-compete agreement upon departing from the company through a legal concept known as 'inevitable disclosure'.

One thing to keep in mind is that the agreement has to be reciprocal: both parties to the agreement (employer and employee) can't expect to receive any advantage from it, or they will face a dispute.

What are the disadvantages of non-compete agreements?

While non-compete agreements have many benefits for employers, they also have a number of potential drawbacks. Some of the most important ones are summarized below:

• They can be used to restrict competition and limit employee mobility — Non-compete agreements can be used to restrict competition by limiting employee mobility. This can be harmful to employees, as it can limit their ability to find new employment opportunities. It can also be harmful to businesses, as it can limit the pool of available talent.
• They can be difficult to enforce, especially if they are not well-drafted — Non-compete agreements can be difficult to enforce. This is especially true for non-competes that were signed when the employee was initially hired or in a previous position because courts take into consideration whether the restrictions contained in the agreement are reasonable considering the circumstances surrounding its execution and whether they violate public policy.
• They can be expensive to litigate if they are breached — If a non-compete agreement is breached, the parties involved may have to go to court to resolve the dispute. This can be costly for both the business and the employee.
• They may not be enforceable in certain jurisdictions — Non-compete agreements may not be legally enforceable in certain jurisdictions. This is because some states prohibit non-competes altogether. In California, for instance, non-compete agreements are only permissible when they are reasonable with respect to time and geographic area. Even then, if the agreement is found to be unreasonable or unenforceable, the employee may still be able to recover damages.
• They can be a deterrent to employee productivity and innovation — Non-compete agreements can also be a deterrent to employee productivity and innovation. When employees are worried about being sued if they leave their job to start their own business or take a job with a competitor, they are less likely to be productive in their jobs. This can be bad business for the employer.
• They may not be enforceable against former employees who have been terminated without cause — Some non-compete agreements contain clauses restricting an employee's ability to work for a competitor after terminating employment under certain circumstances, such as if the employee was terminated without cause. If these clauses are not well-drafted, they may not be enforceable because it can be argued that employees who were terminated without cause should not be subject to the same restrictions as other employees.
• They may not be enforceable against independent contractors — Certain non-compete agreements may not be enforceable against independent contractors. This is because the law may consider them to be in a different category than employees. For example, in California, an agreement that restricts an independent contractor from working for a competitor for a period of two years after the termination of the contract would likely be considered invalid.
• They may not be enforceable against employees who accept severance pay — Non-compete agreements may not be enforceable against employees for a certain period of time after receiving severance or settlement pay, because the law may require them to be given an opportunity to find new employment.
• They can be used to prevent departing employees from telling customers about a change in management — Some non-compete agreements prohibit employees from discussing the company after termination, even if they are talking to existing customers about business matters or if their comments are truthful and not malicious. In most cases, this would be considered overbroad. Courts may refuse to enforce such restrictions under circumstances where it is necessary for an employee to explain the situation to customers.
• They can be used to prevent departing employees from working for a competitor — Non-compete agreements can be used to prevent departing employees from working for a competitor for a certain period of time after leaving the company. This can be helpful to employers who want to ensure that they do not lose valuable employees to their competitors.

Related Articles:

• Noncompete Agreement: What Is It?
• Understanding Noncompete Agreements?
• The Top 10 Mistakes with Non-Competition Agreements