Free Non-Compete Agreement

Answer a few simple questions Print and download instantly It takes just 5 minutes

Create Your Free Non-Compete Agreement

  1. Answer a few simple questions
  2. Email, download or print instantly
  3. Just takes 5 minutes

Non-Compete Agreement

QGTypeOfAgreement


Employment/Service
Purchase/Sale
Invention
Other

Whenever sensitive information is shared between two parties, there is potential for that
information to be exploited to gain a competitive advantage. This non-compete agreement
will help formalize the relationship and provide legal remedies in the event of a breach.




Your Non-Compete Agreement

This document preview is formatted to fit your mobile device. The formatting will change when printed or viewed on a desktop computer.
Non-Compete Agreement Page of
Page of

NON-COMPETE AGREEMENT

THIS NON-COMPETE AGREEMENT (the "Agreement") dated this ________ day of ________________, ________

BETWEEN:

____________________ of ________________________________________________________________________________
(the "Employer")

OF THE FIRST PART

- AND -

____________________ of ________________________________________________________________________________
(the "Employee")

OF THE SECOND PART

BACKGROUND:

  1. The Employee is currently or may be employed as an employee with the Employer for the position of: ____________________________________________________________ In addition to this responsibility or position, this Agreement also covers any position or responsibility now or later held with the Employer (the "Employment").
  2. As a result of the Employment, the Employee will receive from, or develop on behalf of the Employer, certain proprietary or confidential information (the "Confidential Information") and the Employer has sought assurance this will not be exploited to gain a competitive advantage.

IN CONSIDERATION OF and as a condition of the Employment and the Employer providing the Confidential Information to the Employee in addition to other valuable consideration, the receipt and sufficiency of which consideration is hereby acknowledged, the parties to this Agreement agree as follows:

  1. Non-Competition
  2. The Employee agrees that during the Employment and for a period of not prevented after the end of that term, the Employee will not give advice or lend credit, money or the Employee's reputation to any natural person or business entity engaged in a competing business in any geographic area in which the Employer conducts its business, and the Employee will not, directly or indirectly, as employee, owner, sole proprietor, partner, director, member, consultant, agent, founder, co-venturer or otherwise, solely or jointly with others, engage in any business that is in competition with the business of the Employer within the following geographic area:
    • __________
  3. Confidential Information
  4. The Employee acknowledges that, in any position the Employee may hold, in and as a result of the Employment, the Employee will, or may, be making use of, acquiring or adding to information which is confidential to the Employer (the "Confidential Information") and the Confidential Information is the exclusive property of the Employer.
  5. The Confidential Information will include all data and information relating to the business and management of the Employer, including but not limited to, proprietary and trade secret technology and accounting records to which access is obtained by the Employee, including Work Product, Computer Software, Other Proprietary Data, Business Operations, Marketing and Development Operations, and Customer Information.
  6. The Confidential Information will also include any information that has been disclosed by a third party to the Employer and is governed by a non-disclosure agreement entered into between that third party and the Employer.
  7. The Confidential Information will not include information that:
    1. Is generally known in the industry of the Employer;
    2. Is now or subsequently becomes generally available to the public through no wrongful act of the Employee;
    3. Was rightfully in the possession of the Employee prior to the disclosure to the Employee by the Employer;
    4. Is independently created by the Employee without direct or indirect use of the Confidential Information; or
    5. The Employee rightfully obtains from a third party who has the right to transfer or disclose it.
  8. The Confidential Information will also not include anything developed or produced by the Employee during the Employment, including but not limited to, any intellectual property, process, design, development, creation, research, invention, know-how, trade name, trade-mark or copyright that:
    1. Was developed without the use of equipment, supplies, facility or Confidential Information of the Employer;
    2. Was developed entirely on the Employee's own time;
    3. Does not result from any work performed by the Employee for the Employer; and
    4. Does not relate to any actual or reasonably anticipated business opportunity of the Employer.
  9. Duties and Obligations Concerning Confidential Information
  10. The Employee agrees that a material term of this Agreement to keep all Confidential Information absolutely confidential and protect its release from the public. The Employee agrees not to divulge, reveal, report or use, for any purpose, any of the Confidential Information which the Employee has obtained or which was disclosed to the Employee by the Employer as a result of the Employment. The Employee agrees that if there is any question as to such disclosure then the Employee will seek out senior management of the Employer prior to making any disclosure of the Employer's information that may be covered by this Agreement.
  11. The Employee agrees and acknowledges that the Confidential Information is of a proprietary and confidential nature and that any disclosure of the Confidential Information to a third party in breach of this Agreement cannot be reasonably or adequately compensated for in money damages, would cause irreparable injury to Employer, would gravely affect the effective and successful conduct of the Employer's business and goodwill, and would be a material breach of this Agreement.
  12. The obligations to ensure and protect the confidentiality of the Confidential Information imposed on the  Employee in this Agreement and any obligations to provide notice under this Agreement will survive the expiration or termination, as the case may be, of this Agreement and will continue for five (5) years from the date of such expiration or termination, except in the case of any Confidential Information which is a trade secret in which case those obligations will last indefinitely.
  13. The Employee may disclose any of the Confidential Information:
    1. To a third party where Employer has consented in writing to such disclosure; or
    2. To the extent required by law or by the request or requirement of any judicial, legislative, administrative or other governmental body after providing reasonable prior notice to the Employer.
  14. If the Employee loses or makes unauthorised disclosure of any of the Confidential Information, the Employee will immediately notify the Employer and take all reasonable steps necessary to retrieve the lost or improperly disclosed Confidential Information.
  15. Avoiding Conflict of Opportunities
  16. It is understood and agreed that any business opportunity relating to or similar to the Employer's current or anticipated business opportunities coming to the attention of the Employee during the Employment is an opportunity belonging to the Employer. Accordingly, the Employee will advise the Employer of the opportunity and cannot pursue the opportunity, directly or indirectly, without the written consent of the Employer.
  17. Without the written consent of the Employer, the Employee further agrees not to:
    1. solely or jointly with others undertake or join any planning for or organization of any business activity competitive with the current or anticipated business activities of the Employer; and
    2. directly or indirectly, engage or participate in any other business activities which the Employer, in their reasonable discretion, determines to be in conflict with the best interests of the Employer.
  18. Without the written consent of the Employer, the Employee further agrees not to directly or indirectly, engage or participate in any other business activities which the Employer, in their reasonable discretion, determines to be in conflict with the best interests of the Employer.
  19. Ownership and Title to Confidential Information
  20. The Employee acknowledges and agrees that all rights, title and interest in any Confidential Information will remain the exclusive property of the Employer. Accordingly, the Employee specifically agrees and acknowledges that the Employee will have no interest in the Confidential Information, including, without limitation, no interest in know-how, copyright, trade-marks or trade names, notwithstanding the fact that the Employee may have created or contributed to the creation of the Confidential Information.
  21. The Employee waives any moral rights that the Employee may have with respect to the Confidential Information.
  22. The Employee agrees to immediately disclose to the Employer all Confidential Information developed in whole or in part by the Employee during the Employment and to assign to the Employer any right, title or interest the Employee may have in the Confidential Information. The Employee agrees to execute any instruments and to do all other things reasonably requested by the Employer, both during and after the Employment, in order to vest more fully in the Employer all ownership rights in those items transferred by the Employee to the Employer.
  23. Return of Confidential Information
  24. The Employee agrees that, upon request of the Employer or upon termination or expiration, as the case may be, of the Employment, the Employee will turn over to the Employer all Confidential Information belonging to the Employer, including but not limited to, all documents, plans, specifications, disks or other computer media, as well as any duplicates or backups made of that Confidential Information in whatever form or media, in the possession or control of the Employee that:
    1. May contain or be derived from ideas, concepts, creations, or trade secrets and other proprietary and Confidential Information as defined in this Agreement; or
    2. is connected with or derived from the Employee's services to the Employer.
  25. Remedies
  26. The Employee agrees and acknowledges that the Confidential Information is of a proprietary and confidential nature and that any failure to maintain the confidentiality of the Confidential Information in breach of this Agreement cannot be reasonably or adequately compensated for in money damages and would cause irreparable injury to the Employer. Accordingly, the Employee agrees that the Employer is entitled to, in addition to all other rights and remedies available to them at law or in equity, an injunction restraining the Employee, any of its personnel, and any agents of the Employee, from directly or indirectly committing or engaging in any act restricted by this Agreement in relation to the Confidential Information.
  27. Notices
  28. In the event that the Employee is required in a civil, criminal or regulatory proceeding to disclose any part of the Confidential Information, the Employee will give to the Employer prompt written notice of such request so the Employer may seek an appropriate remedy or alternatively to waive the Employee's compliance with the provisions of this Agreement in regard to the request.
  29. If the Employee loses or fails to maintain the confidentiality of any of the Confidential Information in breach of this Agreement, the Employee will immediately notify the Employer and take all reasonable steps necessary to retrieve the lost or improperly disclosed Confidential Information.
  30. Any notices or delivery required in this Agreement will be deemed completed when
    1. hand-delivered;
    2. delivered by agent;
    3. sent by facsimile to the parties at the facsimile numbers contained in this Agreement or as the parties may later designate in writing, after a successful confirmation report is received from the facsimile machine used to send the notice; or
    4. seven (7) days after being placed in the post, postage prepaid, to the parties at the addresses contained in this Agreement or as the parties may later designate in writing.
  31. The addresses and facsimile numbers for any notice to be delivered to any of the parties to this Agreement are as follows:
    1. ____________________
      ________________________________________________________________________________

      Facsimile: __________
    2. ____________________
      ________________________________________________________________________________

      Facsimile: __________
  32. Representations
  33. In providing the Confidential Information, the Employer makes no representations, either express or implied as to its adequacy, sufficiency, completeness, correctness or its lack of defect of any kind, including any patent or trade mark infringement that may result from the use of such information. The Employer will not be liable for any damage or loss that may occur from such provision or use of the Confidential Information.
  34. Termination
  35. This Agreement will automatically terminate on the date that the Employment terminates or expires, as the case may be. Except as otherwise provided in this Agreement, all rights and obligations under this Agreement will terminate at that time.
  36. Assignment
  37. Except where a party has changed its corporate name or merged with another corporation, this Agreement may not be assigned or otherwise transferred by either party in whole or part without the prior written consent of the other party to this Agreement.
  38. Amendments
  39. This Agreement may only be amended or modified by a written instrument executed by both the Employer and the Employee.
  40. Governing Law
  41. This Agreement will be construed in accordance with and governed by the laws of the Australian Capital Territory.
  42. Definitions
  43. For the purpose of this Agreement the following definitions will apply:
    1. 'Work Product' means work product information, including but not limited to, work product resulting from or related to work or projects performed or to be performed for the Employer or for customers of the Employer, of any type or form in any stage of actual or anticipated research and development.
    2. 'Computer Software' means computer software resulting from or related to work or projects performed or to be performed for the Employer or for customers of the Employer, of any type or form in any stage of actual or anticipated research and development, including but not limited to, programs and program modules, routines and subroutines, processes, algorithms, design concepts, design specifications (design notes, annotations, documentation, flowcharts, coding sheets, and the like), source code, object code and load modules, programming, program patches and system designs.
    3. 'Other Proprietary Data' means information relating to the Employer's proprietary rights prior to any public disclosure of such information, including but not limited to, the nature of the proprietary rights, production data, technical and engineering data, test data and test results, the status and details of research and development of products and services, and information regarding acquiring, protecting, enforcing and licensing proprietary rights (including patents, copyrights and trade secrets).
    4. 'Business Operations' means operational information, including but not limited to, internal personnel and financial information, vendor names and other vendor information (including vendor characteristics, services and agreements), purchasing and internal cost information, internal services and operational manuals, and the manner and methods of conducting the Employer's business.
    5. 'Marketing and Development Operations' means marketing and development information, including but not limited to, marketing and development plans, price and cost data, price and fee amounts, pricing and billing policies, quoting procedures, marketing techniques and methods of obtaining business, forecasts and forecast assumptions and volumes, and future plans and potential strategies of the Employer which have been or are being considered.
    6. 'Customer Information' means customer information, including but not limited to, names of customers and their representatives, contracts and their contents and parties, customer services, data provided by customers and the type, quantity and specifications of products and services purchased, leased, licensed or received by customers of the Employer.
  44. General Provisions
  45. Time is of the essence in this Agreement.
  46. This Agreement may be executed in counterpart.
  47. Headings are inserted for the convenience of the parties only and are not to be considered when interpreting this Agreement. Words in the singular mean and include the plural and vice versa. Words in the masculine mean and include the feminine and vice versa.
  48. The clauses, paragraphs, and subparagraphs contained in this Agreement are intended to be read and construed independently of each other. If any part of this Agreement is held to be invalid, this invalidity will not affect the operation of any other part of this Agreement.
  49. The Employee is liable for all costs, expenses and expenditures including, and without limitation, the complete legal costs incurred by the Employer in enforcing this Agreement as a result of any default of this Agreement by the Employee.
  50. The Employer and the Employee acknowledge that this Agreement is reasonable, valid and enforceable. However, if a court of competent jurisdiction finds any of the provisions of this Agreement to be too broad to be enforceable, it is the intention of the Employer and the Employee that such provision be reduced in scope by the court only to the extent deemed necessary by that court to render the provision reasonable and enforceable, bearing in mind that it is the intention of the Employee to give the Employer the broadest possible protection to maintain the confidentiality of the Confidential Information.
  51. No failure or delay by the Employer in exercising any power, right or privilege provided in this Agreement will operate as a waiver, nor will any single or partial exercise of such rights, powers or privileges preclude any further exercise of them or the exercise of any other right, power or privilege provided in this Agreement.
  52. This Agreement will inure to the benefit of and be binding upon the respective heirs, executors, administrators, successors and assigns, as the case may be, of the Employer and the Employee.
  53. This Agreement constitutes the entire agreement between the parties and there are no further items or provisions, either oral or otherwise.

IN WITNESS WHEREOF ____________________ and ____________________ have duly affixed their signatures under hand and seal on this ____ ________________ ________.


_______________________________
WITNESS:  ______________________
Address:  ________________________
Occupation:  _____________________

_______________________________
______________________(Employer)

_______________________________
WITNESS:  ______________________
Address:  ________________________
Occupation:  _____________________

_______________________________
______________________(Employee)

What is a Non-Compete Agreement?

A Non-Compete Agreement is a formalised agreement commonly made between an employee and employer where the employee agrees to not enter into competition with the employer when they leave the company.

By signing a Non-Compete Agreement, an employee agrees not to work for a competitor during their current employment or after their employment ends, within certain limitations.

You can create a Non-Compete Agreement for several different arrangement types, including:

  • Employment/Service: a non-compete for an employee or contractor
  • Purchase/Sale: a non-compete for commercial negotiation
  • Invention: a non-compete for the disclosure of intellectual property

What is the purpose of a Non-Compete Agreement?

Whenever two parties share sensitive information, there is potential for one party to exploit the other to gain a competitive advantage. This no competition agreement formalises the relationship and provides legal remedies in the event of a contract breach.

During the time indicated in the non-compete clause, the employee is prohibited from markets or starting businesses that might cause the employee to gain an unfair competitive advantage against their former employer. The employee might gain an advantage by exploiting trade secrets or other confidential information.

A Non-Disclosure Agreement asks employees to keep sensitive information, such as supplier lists, private while they work for a company and potentially indefinitely after they have left. Although a Non-Competition addresses confidential information and intellectual property, a Non-Disclosure Agreement is more specific when defining what constitutes confidential information.

How do you write a non-compete clause?

If you are hiring someone with a Non-Compete Agreement, there are a few things to consider. When crafting a non-compete clause, keep the following in mind:

  • Keep your restrictions reasonable: Be reasonable with your restrictions and how long you hold your ex-employees to them. Consider reasonable geographical restrictions in your clause.
  • Consider your industry: Will you provide industry-specific training to your employees or give them access to trade secrets that would give their future employees an advantage? If not, there might not be grounds for a non-compete.
  • Contracts should offer consideration: Are you offering something (such as an Employment Contract) in exchange for signing a non-compete? It may be difficult to ask a current employee to sign this contract without providing some form of compensation, such as a bonus or additional vacation days.
  • Avoid ambiguity: Vague clauses are difficult to uphold. Be specific when creating your non-compete. It’s unlikely that a court will uphold broad, vague restrictions.
  • Make sure it is necessary: Non-Compete Agreements are meant to protect businesses. The court might ask a company why a clause is necessary for its protection if a former employee challenges the non-compete.

Provide information on both you (the organization/individual) and the other party, including details like a specific job description. These details should make it clear why it is reasonable for the other party to have restrictions.

Decide the terms of your non-compete clause, including:

  • The length of the restrictions
  • Where the employee is restricted from competing

You can also choose to insert a non-solicitation clause. A non-solicitation agreement prevents the employee from inducing other employees or contractors from leaving the employer to work in a competing business or from interfering with the employer's relationship with other employees in general. This means that the employee cannot invite the employer's staff to move to another workplace.

You and the other party must sign the agreement. You might also wish to have a witness sign the document.

Complete LawDepot’s template to finalise a non-compete clause in Australia. Your Non-Compete Agreement is customised for your circumstances and region.

How effective is a Non-Compete Agreement?

Courts may not enforce a non-compete clause if:

  • the effect could be harmful to the public (if it restricts commerce and depresses the local economy)
  • the scope is broader than necessary to protect the employer
  • the restriction would cause undue hardship on the employee (too difficult for the employee to find a new job)
  • the agreement has unreasonable time or geographic restrictions

For example, consider a worker at a telecom provider. The company includes a clause in the Employment Contract> that restricts the employee from working for a competing provider for a certain amount of time. Courts may consider the restriction reasonable for a top-level executive with access to lots of information about the company, such as business plans or financial information. However, even in that case, courts may consider it unreasonable if the contract completely restricts working in the telecom industry if the employee leaves the company.

However, courts generally consider a non-compete to be a legally binding document. A judge should uphold the contract, as long as it isn’t too broad or restricting.

Related Documents:

  • Employment Contract: a contract between an employer and an employee that details the terms of employment like salary, benefits, and duties
  • Purchase of Business Agreement: a document used to transfer the ownership of a business from one party to another
  • Employment Offer Letter: a letter setting out terms of employment
  • Partnership Agreement: a document setting out the terms of a partnership and the rules which govern it
  • Joint Venture Agreement: a contract used to set up a business arrangement between two or more parties who agree to combine resources for a limited time to accomplish a particular project or goal
Create your free Non-Compete Agreement in 5-10 minutes or less
Know someone who could benefit from free legal forms? Pass it along:
X
Thanks for sharing!
Create your own Non-Compete Agreement
This document preview is formatted to fit your mobile device. The formatting will change when printed or viewed on a desktop computer.
Loading ...
Loading ...

Note: Your initial answers are saved automatically when you preview your document.
This screen can be used to save additional copies of your answers.