Non-compete agreement

What is a non-compete agreement?

A non-compete agreement is a formal contract between a business and an employee, consultant, or contractor. It aims to prevent the individual from engaging in activities that compete with the business's interests during and after their employment. Common scenarios covered by non-compete agreements include:

• Prohibiting employment with competitors: employees are restricted from working for competing businesses while employed and for a specified period after leaving.
• Non-solicitation: employees are forbidden from approaching your customers, contractors, clients, and employees for a certain period post-employment.
• Non-disclosure of confidential information: while a standalone non-disclosure agreement (NDA) is better suited for this, non-compete agreements often include confidentiality clauses.

Key elements of a non-compete agreement

1. Parties involved

Clearly state the names and addresses of both parties involved. Describe the services or products your business provides and the duties of the individual subject to the agreement. This provides context and is crucial if a dispute arises.

2. Non-competition clause

Detail the period the non-compete agreement will be in effect and specify if it applies to a particular geographic area. Depending on your needs, you may include non-solicitation and non-circumvention clauses instead. Ensure you define the timeframes during which these clauses are active.

3. Governing law

Specify the legal jurisdiction under which the non-compete agreement will be governed. This is essential for legal clarity and enforcement.

When to use a non-compete agreement

Non-compete agreements should be used alongside other documents, such as business proposals, freelance contracts, and NDAs. Provide the agreement to the other party early to allow for any necessary renegotiation or clarification. Use a non-compete agreement when:

• Hiring new employees
• Working with consultants or agencies on specific aspects of your business
• Protecting your business interests and preventing significant damage upon the departure of an employee or consultant

Advantages of a non-compete agreement

Non-compete agreements offer several benefits:

• Clarity: clearly outlines expectations for both parties, strengthening the working relationship.
• Legal protection: specifies legal consequences for breaching the agreement, protecting your business from unfair competition.
• Confidentiality: ensures that company-specific data and insider secrets are not shared with competitors.

How does a non-compete agreement work?

A well-structured non-compete agreement should clearly outline its terms and conditions. Here’s what a quality non-compete agreement should include:

• Restricted business: specifies the primary business activities the individual is restricted from engaging in.
• Restricted period and territory: defines the duration and geographic scope of the non-compete restriction.
• Restrictions and non-solicitation: details what the individual cannot do during the restricted period, including approaching your employees, clients, and customers.
• Consideration: specifies any compensation provided in exchange for agreeing to the non-compete terms.
• Confidential information: includes clauses to protect any proprietary information shared during employment.

Create and sign with Notch

Using Notch’s non-compete agreement template, you can easily create, sign, and store your non-compete agreements. Our template includes all the critical legal clauses needed, making it simple to customize according to your specific needs. Here’s what you’ll find in our template:

• Confidential information: protection for your business’s sensitive data.
• Non-compete clause: clear terms outlining the restrictions on the individual.
• Agreement period: defined timeframe for the agreement’s effectiveness.

Why choose Notch?

Notch offers dynamic data fields, making it easy to fill, sign, and manage your contracts digitally. With our platform, you can:

• Create & sign: simplify the process of creating and signing non-compete agreements.
• Manage contracts: store and manage your contracts centrally, helping you analyze, decide, and act quicker.
• Tame chaos: keep all your legal documents organized in one place.

Conclusion

A non-compete agreement is a vital tool for protecting your business interests. By using our free non-compete agreement template, you can ensure that your business remains secure from unfair competition. With Notch, you can create, sign, and manage your non-compete agreements efficiently and effectively.

Get started today with our non-compete agreement template and safeguard your business’s future. Sign up for Notch now and take control of your contracts.