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Non-Compete Agreement

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EMPLOYEE CONFIDENTIAL INFORMATION AND NON-COMPETITION AGREEMENT

Employee's Name

The term EMPLOYER as used in this Agreement shall mean any of the following by which I have been, am, or may hereafter be employed:

(i) a corporation of having its principle office in , ;

(ii) any subsidiary which may be hereafter formed or acquired by

EMPLOYER is engaged in the development, manufacture and sale of a variety of products based upon experimental and inventive work, and has accumulated much information, not generally known, relating to EMPLOYER'S existing and contemplated products manufacturing procedures, methods, machines, compositions, technology, formulas, TRADE SECRETS, know-how, research and development programs, sales methods, customer lists, customer usage and requirements, and "Inventions" as hereafter referred to as "Confidential Information."

The term "Inventions" means discoveries, improvements and ideas (regardless of whether or not patentable or copyrightable) relating to any part of the business or activities of EMPLOYER.

The term "Competitor" means any person, firm or organization (or division thereof) engaged in or about to become engaged in research on or the production and/or sale of any product with which my work for EMPLOYER has been directly concerned, or with respect to which I have acquired Confidential Information by reason of my employment with EMPLOYER.

I am employed or desirous of being employed by EMPLOYER in such capacity that, whether or not engaged directly in manufacturing, sales, or research and development activities, by the nature of my duties I have or expect to become informed of Confidential Information and have contributed or may contribute thereto.

In consideration of and as part of the terms of my employment and/or continued employment (as the case may be), and the payment of compensation to me therefor by EMPLOYER during such time as may be mutually agreeable to myself and EMPLOYER, I agree that:

(1) During the term of my employment, I will not undertake any other work or employment for personal gain without the prior written approval of my EMPLOYER. Also, it is understood that I will not accept any monies, gratuities, commissions, bonuses, or other forms of remuneration from any other company or individuals who manufacture or sell or merchandise products in our computer software/hardware field of business, without the written approval of my EMPLOYER.

(2) I agree that (except as required in my duties to EMPLOYER) I will not at any time directly or indirectly use for the benefit of anyone other than EMPLOYER, nor disclose to others, any Confidential Information without first obtaining the written consent of EMPLOYER to do so, unless and until such information shall have been fully and accurately disclosed in a printed publication which has been made available to the public.

(3) With respect to all Inventions made or conceived by me (either solely or jointly with others) during the period of my employment by EMPLOYER; and with respect to Inventions made or conceived by me (either solely or jointly with others) within one (1) year after termination of such employment which utilized Confidential Information to which I shall have had access during my employment by EMPLOYER:

(a) I will promptly and fully inform EMPLOYER in writing.

(b) I will and hereby do assign to or to such subsidiary corporation as it may designate, all of my rights to all such Inventions, and to all Applications for Letters Patent and Letters Patent granted thereupon covering all such inventions.

(c) I will promptly upon request by EMPLOYER (without charge to EMPLOYER but at the sole expense to EMPLOYER) execute, acknowledge and deliver to EMPLOYER such written instruments and do such other lawful acts as may be necessary in the opinion of EMPLOYER and/or its Counsel, to obtain and maintain Letters of Patent and to vest the entire right, title and interest thereto in or in such subsidiary corporation as it may designate.

(d) I hereby acknowledge and agree that all works of authorship, included in the Inventions, shall be considered "works made for hire" and that all ownership of patent and/or copyright in such works shall vest entirely in EMPLOYER. To the extent that the foregoing does not convey all rights in such works of authorship to EMPLOYER, and in the event that the Inventions are not subject to copyright law, I agree to assign, and do hereby assign to EMPLOYER, all of my entire right, title and interest in and to all such Inventions and all copyrights, copyright registrations, patent applications filed, and patents granted thereon.

(4) Records of Confidential Information prepared by me or which come into my possession during my employment by Employer are and shall remain the property of EMPLOYER, and if and when my employment by EMPLOYER shall terminate, all such records and all copies thereof, shall be left with EMPLOYER.

(5) I will at no time hereafter assert any rights under any Invention as having been made or acquired by me prior to my employment by EMPLOYER, except as follows:

IF THERE ARE NO EXCEPTIONS LISTED, IT IS UNDERSTOOD THERE ARE NONE.

Exceptions:

(6) In addition to and independent of the other provisions of this Agreement, I further agree that I will not, for a period of two (2) years from the date of termination of my employment, render services directly or indirectly to ANY Competitor in connection with the sale, research, development, merchandizing or promotion of Competitive Products to any customer of EMPLOYER.

(7) In addition to the other provisions of this Agreement, I further agree that, if my employment with EMPLOYER has been directly connected with a commercial product of EMPLOYER, I will not, for a period of two (2) years from the date of termination of my employment, render services, directly or indirectly, to ANY Competitor, except that I may accept employment with a Competitor whose business is diversified, and which, as to part of its business, is not a Competitor, provided EMPLOYER shall receive, prior to my employment, reasonable assurance that I will not be expected or required to render services directly or indirectly to any part of such organization which is a Competitor, and/or, if my work for EMPLOYER has not been directly connected with a commercial product, I agree that I will not for such two (2) year period render services, directly or indirectly, to any person or organization wherein my duties would be directly related to the work assigned to me by EMPLOYER as evidenced by records of EMPLOYER, e.g. notebooks, reports and sale records; provided however, that in the event that I am unable to obtain employment consistent with my technical qualifications solely because of the provisions of this Paragraph 7 and not because of any restrictions otherwise imposed by law, the provisions of this Paragraph shall be binding upon me only for so long as EMPLOYER shall make payments to me equal to eighty percent (80%) of my monthly base pay at termination (exclusive of extra compensation or other employee benefits) for each month in which I shall notify EMPLOYER in writing setting forth my efforts to obtain such employment and advising that although I conscientiously sought such employment, I have been unable to obtain the same SOLELY because of the provisions of this Paragraph 7.

EMPLOYER'S obligation to make or continue monthly payments herein specified shall terminate upon my obtaining employment, and I will promptly give written notice of such employment to EMPLOYER.

EMPLOYER may at anytime relieve itself of the obligation to make or continue the payments herein provided:

(a) By giving me written permission to accept available employment with a specific prospective EMPLOYER, or

(b) By giving me a written release from all obligations under this Paragraph 7.

EMPLOYER'S obligation to make the monthly payments herein specified shall in no event continue for more than 24 months immediately following termination of my employment with EMPLOYER, and in no event shall the EMPLOYER be liable, under this Agreement, or any action relating thereto, for any amount greater than the aggregate of said monthly payments.

All payments due me hereunder shall be made in accordance with EMPLOYER'S established regular procedures.

(8) Paragraph (6) and (7) hereof are separate and divisible, one from the other. Upon written notice by me to EMPLOYER that I desire to accept employment with a Competitor, naming him or it, EMPLOYER will promptly advise me whether it will waive the requirements of either paragraph 6 or paragraph 7, or both of them (without waiving other paragraphs or provisions of this Agreement).

(9) I agree that I will not, during the period of my employment and for a period of two (2) years thereafter, interfere with or attempt to impair the relationship between EMPLOYER and any person or firm that is a customer of EMPLOYER at the time of the termination of my employment, nor will I attempt, directly or indirectly to solicit, entice, hire or to otherwise induce any customer or employee of EMPLOYER to terminate such customer or employee relationship with EMPLOYER.

(10) I agree to provide EMPLOYER with thirty (30) days' written notice of my intention to terminate my employment.

(11) I agree that the damages which would be suffered by EMPLOYER by reason of my breach of this Agreement would be difficult if not impossible to ascertain and, accordingly, I expressly agree that my violation of said covenants shall entitle EMPLOYER to seek and obtain a temporary, preliminary, or permanent injunction without bond to enjoin and restrain me from the continuation of such breach. Notwithstanding the foregoing, it is further agreed that the remedies herein provided shall not be exclusive and EMPLOYER may seek and obtain such other remedies, at law or in equity, which may be available by reason of such breach. If one party defaults upon its obligations under this Agreement, in addition to all other remedies provided in this Agreement, at law or in equity, the other party shall be entitled to all costs and expenses reasonably incurred as a result of said breach, including court costs and attorney's fees.

(12) It is understood that if any provision of this Agreement is declared to be invalid by a court of competent jurisdiction, such provision shall be severed from this Agreement and the other provisions hereof shall remain in full force and effect.

(13) It is understood that this Agreement contains the entire understanding of the parties with respect to the subject matter contained herein. There are no promises, covenants or understandings other than those expressly set forth herein. This Agreement may not be modified except by a writing signed by authorized representatives of EMPLOYER and me.

(14) It is understood that I may not assign any rights under this Agreement. Subject to the foregoing sentence, this Agreement shall be binding upon EMPLOYER, its successors and assigns, as well as upon my heirs, executors and administrators.

(15) It is understood that no delay or omission in exercising any right or remedy identified herein shall constitute a waiver of such right or remedy, and shall not be construed as a bar to or a waiver of any such right or remedy on any other occasion.

(16) This Agreement shall be governed by and construed in accordance with the laws of the State of . In the event of any dispute under this Agreement, a suit may be brought only in a court of competent jurisdiction in the State of . Any dispute or controversy arising from or relating to this Agreement and its resolution shall be conducted, insofar as possible, in the utmost secrecy; and in the event of litigation, subject to a protective order where all documents, testimony, and records shall be received, heard, and maintained by the court sealed, available for inspection only by EMPLOYER or by me, and by their respective attorneys and experts who shall agree, in advance and in writing, to receive all such information confidentially, and to maintain such information in secrecy until such information shall become generally known.

(17) It is understood that upon acceptance by EMPLOYER as above provided, this instrument supersedes any former written agreement heretofore executed relating to the subject matter of this Agreement.

IN WITNESS WHEREOF I agree that I have carefully read and understand the terms of this Agreement and have signed this Agreement on the date written below. I agree the provisions of this Agreement shall be applicable commencing with the date of my signing of this Agreement.

BY:

TITLE:

DATE:

EMPLOYEE

PRINTED NAME:

ADDRESS:

DATE:

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What a Non-Compete Agreement Is and When It Applies

A Non-Compete Agreement is a contract that restricts a party—typically a departing employee or seller—from engaging in specified competitive activities for a defined period and within defined geographic or customer boundaries. It sets the employer's or buyer's expectations about post-termination conduct, identifies the protected business interests, and describes remedies for breaches. While common in employment and business sale contexts, enforceability depends on reasonableness, state law, consideration provided, and clear drafting that limits time, scope, and geography to what is necessary to protect legitimate business interests.

Why a Clear Non-Compete Matters for Your Organization

A well-drafted Non-Compete protects trade secrets, client relationships, and goodwill while providing predictable remedies if an ex-employee or seller competes improperly. Reasonable limits on duration and scope increase the likelihood the agreement will be enforced.

Why a Clear Non-Compete Matters for Your Organization

Who Typically Uses Non-Compete Agreements

Non-Compete Agreements are used by employers, buyers in business sales, and service providers who need to protect confidential information or customer relationships after a business relationship ends.

  • Employers hiring executives, sales staff, or technical employees with access to trade secrets.
  • Businesses buying or selling assets where former owners might compete post-closing.
  • Professional services firms protecting client lists and specialized processes.

Use the agreement selectively, tailored to the role and jurisdiction, to balance enforceability with business protection.

Typical Signatories and Their Roles

Employer — HR or Legal

Human resources or in-house counsel is usually responsible for deploying the Non-Compete Agreement, ensuring the language aligns with business interests, and confirming consideration is documented to support enforceability.

Employee / Seller

The departing employee or seller must sign and receive consideration; the agreement should identify the signer's legal name, capacity, and provide clear notice of post-termination restrictions and remedies.

Core Components to Include in a Professional Non-Compete Agreement

Draft each component with precision: vague or overly broad clauses invite challenges. The following six elements form the backbone of enforceable, defensible agreements when balanced against state law.

Parties

Identify the contracting parties with full legal names, capacities (individual or entity), and addresses so the agreement unambiguously binds the correct parties and supports service and enforcement.

Consideration

Describe the consideration provided (hire, continued employment, severance, purchase price allocation) and the timing; adequate, documented consideration is essential for enforceability in most states.

Restricted Activities

Specify prohibited activities with concrete terms—sales to named customers, solicitation of clients, or performing specified services—avoiding catch-all language that courts may strike down as overbroad.

Duration

Set a definite time limit tied to legitimate business needs; many jurisdictions view multi-year restrictions skeptically, so match duration to the role and protectable interest.

Geographic & Customer Scope

Limit restriction to geographic areas and customer classes where the employer actually does business; overly broad territorial limits increase risk of invalidation.

Remedies and Severability

Describe injunctive relief, liquidated damages (if appropriate), and a severability clause allowing courts to narrow or 'blue-pencil' invalid provisions rather than void the entire agreement.

Step-by-Step: Drafting and Executing a Non-Compete

Follow these sequential steps to prepare, review, and finalize a Non-Compete Agreement that aligns with business needs and state law constraints.

  • 01
    Draft core terms: Define parties, scope, duration, geography and consideration clearly.
  • 02
    Legal review: Have counsel confirm compliance with applicable state restrictions and reasonableness standards.
  • 03
    Deliver consideration: Document and provide the agreed consideration before or at signing.
  • 04
    Execute and retain: Collect signatures, date the document, and store a signed copy in the personnel file.

Typical Digital Workflow Settings for Online Completion

Configure your e-signature workflow to capture intent, authentication, and an audit trail required for legal validity under ESIGN and UETA.

Field Configuration
Signature Type Typed, drawn, or certified digital signature
Authentication Email link + optional SMS code or ID verification
Reminder/Expiry Set automatic reminders and a document expiration date
Bulk Send Enable for mass onboarding when role and terms are identical

Typical Execution Flow for an Electronically Signed Non-Compete

Electronic execution follows established steps to demonstrate intent, consent, attribution, and retention consistent with ESIGN/UETA requirements.

  • Upload document: Sender uploads final PDF or DOCX version to the e-sign platform.
  • Place fields: Add signature, date, and initial fields and mark required entries.
  • Invite signer: Send to signer's email; include consumer disclosure if required.
  • Capture audit trail: Platform records timestamps, IP, and actions for evidentiary support.

Digital Signing and Platform Considerations

Choose platform settings that preserve the agreement's integrity and evidentiary trail while meeting regulatory needs such as HIPAA or 21 CFR Part 11 where applicable.

  • Integrations: Salesforce | NetSuite | Microsoft 365 | Google Workspace
  • File formats: PDF, DOCX, HTML, Excel
  • Authentication options: Email link, SMS code, KBA, SSO

eSignature Pricing and Feature Comparison — signNow First

Compare common capability and pricing dimensions across providers. Pricing reflects annual billing where available and plan-level differences can affect feature access.

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 trial Varies by plan Varies by plan Varies by plan Varies by plan
Bulk Send Yes Yes Yes Yes No
Audit Trail Yes Yes Yes Yes Yes
HIPAA Compliant Yes Yes Yes No No

Recordkeeping and Security for Signed Non-Compete Agreements

Encryption in transit: TLS 1.2/1.3
Encryption at rest: AES-256
Compliance standards: SOC 2 Type II, ISO 27001
Health data: HIPAA support (BAA required)
Signature law: ESIGN and UETA compliant
Audit trail: Detailed timestamps and IP logging

Common Risks and Consequences of Poorly Drafted Non-Competes

Unenforceability: Agreement may be voided
Litigation costs: High defense or enforcement expenses
Injunction denial: No immediate relief available
Monetary damages: Possible compensatory awards
Employee turnover: Overbroad terms can harm retention
Regulatory risk: State laws may impose penalties

Frequent Drafting Errors to Avoid

  • Using indefinite durations or vague territorial language that courts may reject.
  • Failing to document consideration or tying consideration to unenforceable promises.
  • Applying identical restrictions across dissimilar roles without role-specific tailoring.
  • Not accounting for state-specific restrictions or statutory limitations on non-competes.

Real-World Examples of Non-Compete Use

These examples illustrate common situations where Non-Compete Agreements play a role in protecting business interests.

Optica Ventures — COO

Optica used a role-specific non-compete for senior hires to protect proprietary deal pipelines.

  • The clause limited competition to named market segments.
  • The result provided clarity during transitions and supported enforcement where scope correlated directly with the company’s protected business interests.

Fertility Centers of Illinois — Founder

A healthcare provider implemented a narrowly scoped non-compete paired with a HIPAA-sensitive addendum.

  • It excluded patient transfers to avoid care interruption.
  • Combining confidentiality with limited post-term restrictions helped balance patient access concerns and legitimate business protection.

Timing Considerations and Typical Deadlines

Non-Compete Agreements do not require state filing in most jurisdictions, but timing affects enforceability and related obligations — document dates clearly.

Effective Date:

Date obligations begin; enter as MM/DD/YYYY

Consideration Timing:

Document when consideration was provided relative to signing

Notice to Employee:

Provide any required pre-signing notice per company policy

Challenge Period:

Statute of limitations varies; preserve records early

Record Retention:

Retain signed copy for the agreement term plus retention period

Key Milestones from Draft to Enforcement

Track milestones to ensure enforceability, from initial drafting through any enforcement action, with clear responsibility at each stage.

01

Drafting Complete

Agreement finalized and tailored to role and jurisdiction

02

Legal Review

In-house or outside counsel confirms compliance

03

Execution

Signatures collected and dated; audit trail stored

04

Enforcement

Injunction or damages sought if breach occurs

Common Questions About Non-Compete Agreements

Answers to frequent practical and legal questions encountered when drafting, executing, or enforcing Non-Compete Agreements.


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