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Non-Compete Agreement Template

Free non-compete agreement template to protect business interests. Covers restricted activities, geographic scope, duration, consideration, and enforcement provisions.

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Non-Compete Agreement

1. Parties and Recitals

This Non-Compete Agreement ("Agreement") is entered into on [Date] between [Company Name] ("Company") and [Individual Name] ("Restricted Party"). WHEREAS the Company possesses valuable trade secrets, client relationships, and proprietary business methods; and WHEREAS the Restricted Party will have access to such information through their [employment/engagement]; the Parties agree as follows.

2. Restricted Activities

During the Restriction Period, the Restricted Party shall not, directly or indirectly: (a) engage in, own, manage, or operate any business that competes with the Company's [describe business area]; (b) solicit, divert, or take away any client or customer of the Company; (c) recruit, solicit, or hire any employee or contractor of the Company; (d) use or disclose any trade secrets or confidential information of the Company. "Competing Business" means any enterprise engaged in [specific industry/services].

3. Geographic Scope and Duration

The restrictions in this Agreement shall apply within [specific geographic area, e.g., a 50-mile radius of the Company's offices / the state of X / nationwide] for a period of [12/18/24] months following the termination of the Restricted Party's relationship with the Company (the "Restriction Period"). The Parties agree that this scope and duration are reasonable and necessary to protect the Company's legitimate business interests.

4. Consideration

In consideration for the Restricted Party's obligations under this Agreement, the Company shall provide: [For new employees: employment and access to confidential information / For existing employees: a lump sum payment of (Amount) or continued employment / For business sales: the purchase price]. The Restricted Party acknowledges that this consideration is adequate and sufficient.

5. Remedies and Enforcement

The Restricted Party acknowledges that a breach of this Agreement would cause irreparable harm to the Company. In the event of a breach, the Company shall be entitled to: (a) injunctive relief without the need to post a bond; (b) recovery of actual damages; (c) recovery of attorney's fees and costs. If any provision is found to be overly broad, the court is authorized to modify it to the minimum extent necessary to make it enforceable.

Signature — Party A

Signature — Party B

Tips for Using This Template

  • Keep the geographic scope and duration as narrow as reasonably necessary - overly broad restrictions are often struck down by courts.
  • Ensure there is adequate consideration - for existing employees, additional compensation beyond continued employment may be required.
  • Several US states (including California) prohibit or severely limit non-compete agreements - check your jurisdiction.
  • Consider a non-solicitation agreement as a less restrictive alternative that courts are more likely to enforce.

Frequently Asked Questions

Are non-compete agreements enforceable?
Enforceability varies widely by jurisdiction. Most courts require non-competes to be reasonable in scope, duration, and geography, and supported by adequate consideration. Some jurisdictions (notably California) ban them entirely for employees. Always check local law.
Can I require all employees to sign a non-compete?
While you can ask, many jurisdictions now limit non-competes to employees who have access to trade secrets or hold senior positions. Requiring non-competes from low-wage or junior employees may be unenforceable and can harm recruiting.
What happens if a court finds the non-compete too broad?
Many courts will 'blue pencil' or reform an overly broad non-compete to make it enforceable. This template includes a reformation clause. However, some jurisdictions void the entire agreement rather than modify it, so draft narrowly.

Related Templates

Non-Disclosure Agreement (NDA)

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Independent Contractor Agreement

Free independent contractor agreement template. Covers contractor status, scope, payment, tax obligations, insurance requirements, and work product ownership.

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Disclaimer: This template is provided for informational purposes only and does not constitute legal advice. Laws vary by jurisdiction. Consult a qualified legal professional before using this document for any binding agreement. ContractClaw Sign is not a law firm and does not provide legal services.

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