Non Compete Non Solicitation Agreement Template for Indonesia

A Non Compete Non Solicitation Agreement is a crucial legal document that protects your business interests when employees have access to sensitive information, client relationships, or proprietary knowledge. Under Indonesian law, these agreements must balance legitimate business protection with employee rights as outlined in Law No. 13 of 2003 on Manpower and the Indonesian Civil Code.

When do you need this document?

You need this agreement when hiring employees who will have access to confidential business information, trade secrets, customer databases, or specialized knowledge that could harm your company if shared with competitors. It's particularly important for senior management positions, sales representatives with direct client contact, technical specialists with proprietary knowledge, and employees working on sensitive projects or strategic initiatives. The agreement should be signed before employment begins or when an employee receives access to confidential information.

Key legal considerations

Indonesian courts generally favor employee rights, so your non-compete clauses must be reasonable and proportionate. The restrictions must be limited in time, typically not exceeding two years for most positions, and geographically confined to areas where your business actually operates. You must provide adequate consideration, such as enhanced compensation, training opportunities, or severance benefits, to make the restrictions enforceable. The agreement should clearly define prohibited activities, specify what constitutes confidential information, and outline the consequences of breach. Include provisions for return of company property and deletion of confidential data upon termination.

Legal requirements in Indonesia

Under Indonesian Manpower Law No. 13 of 2003, employment agreements cannot contain provisions that harm workers' rights or violate labor protection principles. Your non-compete agreement must comply with Minister of Manpower Regulation No. 150 of 2000 regarding employment termination and worker rights. The Indonesian Civil Code requires clear contractual terms and mutual consent for enforceability. Law No. 5 of 1999 on Prohibition of Monopolistic Practices ensures that non-compete restrictions don't create unfair business competition or harm market dynamics. Include dispute resolution mechanisms and specify Indonesian law as the governing jurisdiction. The agreement must be written in Bahasa Indonesia or accompanied by a certified translation, and consider involving independent legal advisors to ensure both parties understand their obligations fully.