Non-Compete Agreement Template
PandaTip: This Non-Compete Agreement Template is written very generally to allow a company to hire a person to work for them and then attempt to bind them to a promise that they will not compete with the company for a specific period of time after the business relationship is over. That all said, it is important to speak to an attorney as non-compete agreements are often held to be unenforceable. More on this below.
This Non-Compete Agreement is entered into as of [DATE] by and between [COMPANY NAME] having its principal place of business located at [ADDRESS] (the “Company”) and [REPRESENTATIVE NAME] (the “Representative”), both of whom agree to be bound by this Agreement.
WHEREAS, the Company is in the business of [DESCRIBE BUSINESS];
PandaTip: Give a brief description of what the company does – e.g., “selling sports equipment.”
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
PandaTip: Give a brief description of the duties to be performed according to the agreement – e.g., “the marketing and sale of sports equipment.”
WHEREAS, the Representative agrees to the restrictions described herein as partial consideration for the Company’s promises inherent in the Representative Agreement.
PandaTip: This gives this non-compete agreement more weight as it may now be deemed to have been specifically bargained for rather than the Representative signing it without getting anything in return, which would make it less likely to be enforced.
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].
PandaTip: Where it says “Duration” state the length of time that you will seek to restrict the Representative. Generally this is not greater than two years. Be sure to check with an attorney in your jurisdiction to determine how likely it is to be enforced at the length you choose. Where it says “Describe Restricted Type of Company” Describe the type of company that you don’t want the representative to work for. In this case, continuing the same example, it may be “sells sports equipment.” Just know that the more narrowly you define the restriction, the more likely it will be enforced. Last, choose the geographic area in which you want to restrict the Representative from working. For instance, if you choose Florida, then the Representative will only be restricted in Florida.
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. The 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.
PandaTip: This section is worded to reflect the way non-compete laws are written and the factors that courts consider with regard to their general enforceabilty.
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.
EXHIBIT A – REPRESENTATIVE AGREEMENT