Non-Compete Non-Disclosure Agreement Template for the United States

A Non Compete Non Disclosure Agreement combines two powerful legal protections into a single contract that safeguards your business from both information theft and competitive harm. This dual-purpose agreement creates binding obligations for confidentiality while restricting the other party's ability to compete against your business during and after your working relationship.

When do you need this document?

You need this agreement when hiring key employees who will access sensitive business information, engaging contractors for proprietary projects, or entering partnerships that require sharing trade secrets. The document is particularly important during mergers and acquisitions when due diligence involves exchanging confidential data, or when onboarding sales representatives who will learn customer lists and pricing strategies. Technology companies frequently use these agreements when developers access source code, and manufacturing businesses rely on them when sharing production processes with suppliers or distributors.

Key legal considerations

The confidentiality provisions must clearly define what constitutes confidential information, including trade secrets, customer data, financial information, and proprietary processes. You should specify security measures required to protect this information and outline permitted uses. The non-compete clauses require careful attention to duration, geographic scope, and restricted activities to ensure enforceability. These restrictions must be reasonable and necessary to protect legitimate business interests without unduly burdening the restricted party. Consider including carve-outs for general skills and knowledge gained during employment. The agreement should address remedies for breach, including injunctive relief and monetary damages, while ensuring the contract includes severability clauses to preserve enforceability if specific provisions are deemed invalid.

Legal requirements in United States

Non-compete enforceability varies dramatically across states, with California, North Dakota, and Oklahoma generally prohibiting such agreements, while other states impose specific limitations on duration, geography, and scope. Recent state-level reforms have further restricted non-compete use, particularly for low-wage workers and in healthcare settings. Federal law governs trade secret protection through the Defend Trade Secrets Act, which provides uniform standards for misappropriation claims and whistleblower protections. The FTC has proposed rules to ban non-compete clauses nationwide, though implementation remains pending. Your agreement must comply with state employment laws, including wage and hour regulations that may affect enforceability. Some states require consideration beyond continued employment to support non-compete provisions, while others mandate disclosure of such agreements during the hiring process. Ensure your contract includes choice of law and jurisdiction clauses that favor enforceability while considering the locations where parties will work and compete.