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Employee Non-Compete Agreement
Use this contract when hiring a key employee. If the employee later leaves the company, this
agreement may prevent them from competing with the company, recruiting other employees, or
misusing confidential information.
If the employee later leaves the company, this agreement prevents him or her from competing
against the company, recruiting other employees, or misusing confidential information.
Courts generally frown on agreements that prevent people from working.
Courts understand; however, that there is a substantial investment in hiring, training, and paying
employees, and that employers need to protect their interests.
While courts appreciate the need for non-compete agreements, they will not tolerate agreements
with unreasonable restrictions.
The law regarding the enforceability of non-competition clauses varies from state to state, industry
to industry and may be different for a particular situation (such as the employment of a former
owner after the sale of a company, versus a simple employment contract).
The court will enforce a reasonable non-competition agreement, provided the employer has a
legitimate need for the agreement, the geographic area covered is not too broad and the duration of
the agreement is not too long.
The fact that an employee signed the agreement does not guarantee that the court will enforce it.
It is strongly recommended that you consult an attorney before signing a contract with a non-
competition clause.
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Cover memo.
Date:
[Date]
To:
[Name of Employee]
From:
[Owner/Founder]
[Company]
Subject:
Employee Non-Compete Agreement
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Attached is Employee Non-Compete Agreement in order to establish the relationshi