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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:
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:
IN WITNESS WHEREOF ____________________ and ____________________ have duly affixed their signatures under hand and seal on this ________ day of ________________, ________.
A Non-Compete Agreement is also known as a:
Non-compete agreements are commonly made between an employee and employer where the employee agrees to not enter into competition with the employer when they leave the company.
This means that for the period of time indicated in the non-compete, the employee will be prohibited from markets, professions, or other jobs that might cause the employee to gain a competitive advantage against their former employer by exploiting trade secrets or other confidential information.
Essentially, by signing a Non-Compete Agreement, an employee is agreeing not to work for a competitor after their current employment ends, within certain limitations.
A Non-Compete Agreement should be used by an employer as a way to prevent an employee from using the employer's confidential business information to gain a competitive advantage at other jobs after they have left the company.
Any business arrangement which involves exchange of confidential information critical to the success of the business is likely to benefit from the use of a Non-Compete Agreement.
Most U.S. states will recognize a Non-Compete Agreement as a valid, enforceable legal document, which means that the parties in the agreement are bound to its terms and conditions.
However, some states do not recognize non-compete agreements at all, so it's important to check your state laws to determine if your state recognizes this document.
In addition, if you are trying to enforce a non-compete clause or agreement from another state in a state where a non-compete is not recognized, chances are it will not be valid.
The terms of the non-compete must also be reasonable.
As an example, if you worked at a telecom provider and they included a clause in your Employment Contract that said you couldn't work for a competing provider for a certain amount of time, that might be considered reasonable if you were a top-level executive with access to lots of imformation about the company, such as business plans or financial information. However, even in that case, if the contract said that you would be unable to work in the telecom industry at all if you left the company, that could be considered an unreasonable term and would likely be difficult to enforce.
A Non-Compete Agreement must have a reasonable duration which is generally between six months to a year. However, what is considered a reasonable length of time may vary by state and the nature of the employment. Since state laws can change over time, it's important to check your state's current non-compete law.
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