Noncompete
Specifies roles, activities, and geographic limits where the employee cannot compete after termination. Must be reasonable and tailored to protect legitimate business interests to increase enforceability under state law.
Use an Employment Restrictive Covenant to protect proprietary information, preserve customer relationships, and limit unfair competition. Properly drafted covenants clarify expectations, reduce turnover-related risk, and make remedies such as injunctions or damages more attainable in court, subject to state enforceability standards.
Employers across sizes and sectors use restrictive covenants to protect legitimate business interests while balancing employee mobility rights.
Choosing the right covenant and duration depends on role sensitivity, state law limits, and enforceability considerations.
CHRO, General Counsel, or authorized HR manager who identifies the business need, approves restrictive scope, and executes the covenant on the company's behalf. They ensure legal review, align duration and geographic limits with state law, and retain executed copies for compliance.
Individual employee or contractor whose employment agreement includes the covenant. They must provide full legal name, position, effective date, and signature; understand post-employment obligations; and receive a copy of the signed covenant for their records.
Specifies roles, activities, and geographic limits where the employee cannot compete after termination. Must be reasonable and tailored to protect legitimate business interests to increase enforceability under state law.
Prohibits contacting former clients, customers, or employees for a defined period. Draft with clear definitions of 'solicit' and 'customer' to avoid overbreadth that courts may reject.
Restricts disclosure of trade secrets and proprietary information regardless of employment status; include examples, duration, and permitted disclosures to third parties like legal counsel or regulators.
States the time period and geographic reach of each restriction. Reasonable limits vary by role and state; tie scope to protectable client or IP interests rather than broad market exclusions.
Describes what the employee receives in exchange, such as continued employment, bonus, or equity. Adequate consideration is a threshold for enforceability in many jurisdictions. State statutes can set minimum standards.
Lists employer remedies for breach, including injunctions, liquidated damages, or forfeiture of incentives. Ensure remedies are proportional and avoid penalties that courts may view as punitive.
| Field Name and Configuration Setting | Field | Configuration |
|---|---|
| Signature Type | Signature Type | Electronic or notarized |
| Authentication | Authentication | Email, SMS code, or KBA |
| Routing | Routing | Sequential or parallel signing |
| Retention Rule | Retention Rule | Store with audit trail permanently |
Digital signing platforms should support secure authentication, tamper-evident records, and exportable audit trails for Employment Restrictive Covenants.
Date parties sign; starts obligations when effective date permits.
Enter MM/DD/YYYY; used to calculate restriction durations and statute periods.
Begins on termination date; counts days for nonsolicit and noncompete periods.
Provide executed copy within a reasonable time per state law.
Reassess scope and consideration before extending or re-signing restrictions.
Team drafts covenant and legal counsel reviews for state compliance.
Signatures, notarization, and distribution of executed copies.
Monitor for breaches, document incidents, and gather evidence timely.
Archive records and audit retention periods after restriction expiration.
| Restriction Type | Noncompete | Nonsolicitation |
|---|---|---|
| Enforceability | varies by state | generally enforceable |
| Typical Duration | 6–24 months common | 6–12 months common |
| Geographic Limit | defined region or radius | client-based limitation |
| Consideration Needed | yes (often) | yes (often) |
| signNow | DocuSign | Adobe Sign | PandaDoc | HelloSign | |
|---|---|---|---|---|---|
| Starting Price | $8/user/mo | $15/user/mo | $14/user/mo | $19/user/mo | $15/user/mo |
| Free Trial | 7-day free trial | Varies | Varies | Varies | Varies |
| Bulk Send | Yes | Yes | Yes | Yes | No |
| Audit Trail | Yes | Yes | Yes | Yes | Yes |
| HIPAA Compliant | Yes | Yes | Yes | No | No |
A biotech startup added noncompete and confidentiality clauses at hiring to safeguard proprietary assays and investor relationships.
A regional real estate firm used a nonsolicitation clause to protect client lists after a high-volume agent resigned.