An agreement is an arrangement between two or more parties who come into terms with the same thing at the same time. The agreement is made more reliable and trustworthy when a written document about it is created, signed, witnessed and sworn under oath.

Employers and employees are just some of the many examples of the parties that make up an agreement, specifically an employment agreement. The main topic of this article is an employee non-compete agreement. We will find out what it is, what its uses are, and other related details. Sample agreement templates are also provided for your reference.

Sample Non-Compete and Non-Solicitation Agreement Template

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Employee Non-Compete Sample Agreements

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Simple Employee Non-Compete Agreement Template

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Employee Confidentiality, non-competition, and Non-Solicitation Agreement Template

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Officers Confidentiality Non-Solicit and Non-Compete Agreement Template

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Printable Employee Non-Disclosure and Non-Compete Agreement

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Employee Non-Compete Agreement Form

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What is a Employee Non-Complete Agreement?

Two parties are involved in an employee non-compete agreement, namely the employer and the employee. The agreement takes place when both parties agree to the provisions of the agreement, wherein the employee agrees not to use the skills and information that they have learned during their employment with a particular employer and enter into competition with that employer directly or indirectly. Entering into direct competition means starting a business that is the same or similar to that of one’s previous employer and entering into an indirect competition means working in the same company that does the business as one’s previous employer.

The purpose of the agreement is to prevent employees from transferring what the company has imparted to them to their competitors. Of course, no company wouldn’t want that as because they invested their time, money and offered training so that employees can work properly for them, not for their competitors or other companies. Employees who sign the agreement agrees not to directly and indirectly enter a market or business for a specified duration of time or within a geographical location. The agreement also prevents employees from sharing the trade secrets of their employer, client list, jobs or projects handled, processes in production, etc.

We need jobs to sustain our everyday needs and it’s no surprise that a lot of people would grab open opportunities when they see one even if it means breaking a promise. But with a non-complete agreement in place, employees will think twice before actually grabbing that opportunity as they no longer made a promise that can be forgotten. Other related topics you may be interested in are Sample Business Non-Compete AgreementsMarketing Agreement Samples and Templates, and Reseller Agreement Samples and Templates.

Benefits of a Non-Compete Agreement

A lot of companies use employee non-compete agreements for a reason and they are protecting confidential and proprietary information from disclosure, and the prevention of unfair competition. Companies invest in their employees by providing them training and allowing them enough time to learn the  many ways on how the business operates. A great deal of resources are spent on these employees to help them become productive within the company. As an employee, it is also natural that you gain access to certain information to help you with the job. However, even if this information has been shared by the company to their employees, this does not mean that they can freely share it with outsiders, especially their competition. A non-compete agreement restricts the employee from disclosing these sensitive and confidential information and are obligated to protect it even after they terminate their employment.

Another benefit that non-compete agreements offer is the prevention of unfair competition. What is unfair competition. A good example is a selling a business to earn profit and then starting another business of the same nature in the same market just across the sold business. How is this unfair competition? The newly started business obviously has an unfair advantage over their competition as they have direct access to their old customer’s information. This allows them to market directly to them. A non-compete agreement legally prevents this situation from happening by preventing the seller of the business from opening the same business for a particular duration of time after the sale and within a specific distance from the sold business.

Without a non-compete agreement, you and your business may just be caught into something that may ruin your business or drag it down. Also check out other related topics, like Business Sale Agreement Samples and TemplatesNondisclosure Agreement Samples and Examples, and General Employment Agreement Samples & Templates.

Components of a Non-Compete Agreement

The provisions in a non-compete agreement varies from on company to other because of the fact these agreements are specifically created according the preferences of the employer that are allowed under the law, as well as the nature of the job. However, that doesn’t stop them from having a common components or parts. The list below are the components that you can find in a non-compete agreement.

Duration

This component refers to the length of time the limiting conditions may apply to an employee. Non-compete agreements often lasts for a span of one to two years. A realistic period of time must be set in the agreement so that the employee can still further their careers. Employers may not bind employees to the agreement for a lifetime as that is against the law and such agreements tend to lose in court cases.

Scope

All of the things that an employee is allowed and not allowed to do should be part of the scope of the agreement and must be clearly stated in it. This way the employee will not wander into the wrong side of things.

Geography

The restrictions of the non-compete agreement includes the location where business cannot be done. Covered in a non-compete agreement where restrictions are applied are in local areas and within a specific radius around the employers business. The employee under the non-compete agreement may not conduct business within the specified location for a specific period of time as agreed.

Compensation

This component of the agreement provides the details on how much the employee must pay their employee for violating the agreement. It is similar to the remedies of contract breaches in some way.

Competition

Here, the specific industries and the type of businesses that an employee is restricted from joining must be specified. They are often those companies or businesses that directly competes with the employer and employees must be blocked from joining them.

Those are the list of the components that you can commonly see in different types of non-compete agreements of different employers. If you want to check out more about agreements and other related topics, then you may check them out on our website. Some of the articles that you will find there include Employment Agreement Executive TemplatesSample Apartment Rental Agreement Templates, and Month-To-Month Rental Agreement Template.

Contractor Non-Compete Agreement Template

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Employer/Company Non-Compete Agreement Template

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Attorney Non-Compete Agreement

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Editable Confidentiality and Non-Compete Agreement Template

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Vendor Non-Compete Agreement Template

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Independent Contractors Non-Compete Agreement Template

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Employment Non-Compete Agreement Template

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How Is a Non-compete Agreement Different from a Non-disclosure Agreement?

One of the benefits of a non-complete agreement is that it helps protect proprietary and confidential information and prevents them from further disclosure. That just sounds like a non-disclosure agreement. Well, now you are definitely confused. While there are similarities between the two agreements, they are undoubtedly different and one should not be mistaken for the other.

Protecting sensitive information is just one of the provisions included in a non-disclosure agreement, but it is not entirely its main purpose or goal. However, it has been included because it is a logical thing to do. If employees transfer to the competition because a non-compete agreement wasn’t around to stop them, chances are they’ll leak out trade secrets and everything that they have learned from the previous employer to their new employer. This is regardless if they are aware of it or not. And this is what makes them seem the same.

So how are they different? What sets the two agreements apart has to do with their main purpose or main use. As mentioned, a non-compete agreement is used to prevent or stop an employee from transferring skills and information that they have gained from their employer to another employer who is in direct competition with them. This is very different from what a non-disclosure agreement is used for. This agreement is used solely to protect proprietary and confidential information and nothing else. And this is where they are different.

It is important to be able to determine what an agreement is for and differentiate them from all other existing agreements. You may find other related articles interesting, like Office Lease Agreement TemplateMaster Professional Services Agreement, and Real Estate Partnership Agreement Templates.

Advantages of Using Agreement Templates

What are agreement templates? Agreement templates are incomplete documents that includes all of the necessary details, sections and parts that make up an agreement. It can be completed by supplying the required information specific to the transaction or agreement at hand. Think of it as a fill in the blanks type of sheet that you are required to answer to get points, except that you don’t actually get points with an agreement. This document is very useful because of its many advantages and they are as follows:

  • It can be used easily and conveniently. There is no need for anyone to have special skills or in depth knowledge about templates to be able to use one. You just simply need the important details and fill in the blanks. It’s that easy and convenient so definitely won need a template expert.
  • It can be edited and printed. The downside with not having a template is that you cannot edit or change anything in it. You need to rewrite the entire document and make the changes from there. Since templates are editable, you can make the necessary changes right after you download and open the template document. Another cool thing is you can have your changes printed. How neat is that?
  • Templates are available online. Scarcity of resources has always been a problem when it comes to important documents such as an agreement. But thanks to the internet, you will not have any problems looking for an agreement template. And it’s not just an agreement template that you can find there but you can also get agreement samples, including those that were actually used by real companies and real people.
  • They won’t cost you a fortune. Most of the time templates are offered for free so you really won’t have to spend a single penny. But since it has also become a business, if you come across a paid template you can guarantee that it won’t break your budget as it would be worth a small fee.
  • It allows the user to save. You can have a great deal of savings with just the use of a template. You can save money with it as mentioned above, but it doesn’t stop there. The template eliminates the need for you to recreate the document every time you need it so that allows you to save time. Since all you will be doing it filling in the blanks with the information you already have, that saves you brainpower, too.

With all those advantages, what more can you ask for in a template? Whether you need help in creating your own or simply need one for your job, then this is just what you need.

We hope that you are able to learn about non-compete agreements and agreements in general in this article. Other related articles you may just find useful and interesting can be found on our website. To name a few are Outsourcing Services Agreement TemplatesExecutive Employment Agreement, and Dealership Agreement Templates.

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