Employment Agreement Non Compete Clause Sample: What You Need to Know
As an employee, it`s important to understand the terms and conditions of your employment agreement. One crucial aspect is the non-compete clause, which restricts your ability to work for a competitor or start a similar business after leaving your current employer. But what should you look for in a non-compete clause, and what does a sample clause look like?
Here`s everything you need to know about employment agreement non-compete clause sample:
What is a Non-Compete Clause?
A non-compete clause is a contractual agreement between an employer and an employee that limits the employee`s ability to compete with the employer`s business. This typically includes working for a competitor, starting a similar business or soliciting clients or employees from the employer. Non-compete clauses are designed to protect the employer`s business interests and intellectual property.
What to Look for in a Non-Compete Clause:
When reviewing a non-compete clause in your employment agreement, here are some factors to consider:
1) Scope: The non-compete clause should clearly define what type of competition is prohibited, and for how long. For example, it may specify a geographic radius or a time period after employment ends.
2) Consideration: A non-compete clause must include some form of consideration, such as compensation or access to trade secrets, to be enforceable.
3) Reasonableness: Courts will typically scrutinize the reasonableness of a non-compete clause, including its scope and duration, to ensure it doesn`t unfairly restrict an employee`s ability to find work.
4) Exemptions: Some employment agreements may include exemptions, such as allowing an employee to work for a competitor if they don`t use any confidential information or trade secrets from their former employer.
Sample Non-Compete Clause:
Here`s a sample non-compete clause that could be included in an employment agreement:
"During the term of employment and for a period of one year after termination of employment for any reason, Employee agrees that they shall not directly or indirectly engage in any Competitive Activity within a radius of 25 miles from the Company`s location. Employee acknowledges that this covenant is necessary to protect the legitimate business interests of the Company and that the Company would suffer irreparable harm if Employee were to breach this covenant."
Conclusion:
A non-compete clause can be a valuable tool for protecting an employer`s business interests, but it can also limit an employee`s future career options. When reviewing your employment agreement, make sure to carefully consider the terms and conditions of any non-compete clause included, and consult with an attorney if you have any questions or concerns.