Non Compete Agreement for Philippines

Non Compete Agreement Template for Philippines

This document is a Non-Compete Agreement governed by Philippine law, designed to protect legitimate business interests while complying with local employment regulations and constitutional rights. It establishes restrictions on an individual's ability to compete with their former employer or business partner for a specified period and within a defined geographic area. The agreement must adhere to Philippine jurisprudence requiring reasonable limitations in scope, duration, and territory, while providing adequate consideration to the restricted party. It includes provisions for enforcement under Philippine courts and considers local labor law protections.

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What is a Non Compete Agreement?

The Non-Compete Agreement is essential for businesses operating in the Philippines seeking to protect their legitimate interests, trade secrets, and competitive advantage. This document is typically used when onboarding key employees, during business acquisitions, or in partnership arrangements where parties gain access to sensitive business information. It must comply with Philippine constitutional principles protecting the right to work, Civil Code provisions on contracts, and relevant Supreme Court decisions on restrictive covenants. The agreement includes specific terms on duration, geographic scope, and prohibited activities, carefully balanced against the individual's right to earn a living. Given the Philippine courts' scrutiny of such restrictions, the document must demonstrate reasonable limitations and provide fair compensation for the non-compete obligations.

What sections should be included in a Non Compete Agreement?

1. Parties: Identifies and defines the parties to the agreement - typically the employer/company and the employee/contractor

2. Background: Explains the context of the agreement, including the nature of the employment/business relationship

3. Definitions: Defines key terms used throughout the agreement, including 'Confidential Information', 'Competing Business', and 'Restricted Territory'

4. Scope of Non-Compete: Details the specific activities and types of business the individual is restricted from engaging in

5. Duration: Specifies the time period during which the non-compete restrictions will apply

6. Geographic Restrictions: Defines the geographical areas where the restrictions apply

7. Consideration: Specifies the compensation or benefits provided in exchange for the non-compete obligations

8. Acknowledgments: Contains employee's acknowledgment of the reasonableness of restrictions and receipt of consideration

9. Remedies: Outlines the consequences of breach and available remedies, including injunctive relief

10. Governing Law: Specifies that Philippine law governs the agreement and jurisdiction for disputes

11. Severability: Provides that if any provision is found invalid, the remainder of the agreement remains enforceable

12. Entire Agreement: Confirms this document represents the complete agreement between parties on this matter

What sections are optional to include in a Non Compete Agreement?

1. Non-Solicitation: Additional restrictions on soliciting employees, customers, or suppliers - used when protecting business relationships is crucial

2. Garden Leave: Provisions for paid leave during notice period - used for senior executives or when immediate competition risk is high

3. Return of Property: Requirements for returning company property - used when employee has access to physical or digital assets

4. Survival: Specifies which provisions survive termination - used in complex relationships with ongoing obligations

5. Assignment: Rights to assign the agreement - used when company anticipates potential restructuring or sale

6. Modification of Restrictions: Mechanism for modifying restrictions if circumstances change - used in long-term or senior employment relationships

What schedules should be included in a Non Compete Agreement?

1. Schedule A - Restricted Territory: Detailed map or list of geographical areas covered by the non-compete restrictions

2. Schedule B - Competing Businesses: Specific list of competitors or types of businesses considered competitive

3. Schedule C - Consideration Details: Breakdown of compensation or benefits provided in exchange for the non-compete

4. Appendix 1 - Confidential Information: Detailed description of what constitutes confidential information

5. Appendix 2 - Key Business Relationships: List of key customers, suppliers, or business partners covered by non-solicitation (if applicable)

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Philippines

Publisher

Genie AI

Document Type

Agreement Contract

Cost

Free to use
Relevant legal definitions
Relevant Industries

Technology

Financial Services

Healthcare

Pharmaceutical

Professional Services

Manufacturing

Telecommunications

Consumer Goods

Retail

Energy

Business Process Outsourcing

Research and Development

Engineering

Consulting

Relevant Teams

Executive Leadership

Sales

Research & Development

Information Technology

Product Development

Business Development

Customer Success

Operations

Engineering

Finance

Strategic Planning

Marketing

Relevant Roles

Chief Executive Officer

Chief Technology Officer

Sales Director

Research Scientist

Senior Software Engineer

Business Development Manager

Product Manager

Account Executive

Technical Lead

Regional Manager

Senior Consultant

Department Head

Executive Vice President

Chief Financial Officer

Operations Manager

Key Account Manager

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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