Non-Compete Agreement Template for United States

A Non-Compete Agreement stops employees from working for competing businesses after leaving their job. When you sign one, you promise not to start a similar business or work for competitors within specific time limits and geographic areas. These agreements help companies protect their trade secrets, customer relationships, and competitive edge.

Courts across the U.S. look closely at these agreements to make sure they're fair. Most states require them to be reasonable in length (often 1-2 years), location, and scope. California notably bans most non-competes, while other states enforce them as long as they protect legitimate business interests without unfairly limiting someone's ability to earn a living.

Use a Non-Compete Agreement when hiring employees who will access sensitive business information or develop close relationships with your customers. These agreements are especially valuable for protecting trade secrets, customer lists, and proprietary processes in industries like technology, sales, and professional services.

The timing matters - introduce the non-compete during initial hiring or alongside a promotion, when you're offering something of value in exchange. Key situations include bringing on senior executives, technical experts, or sales professionals who could harm your business by taking insider knowledge to competitors. Make sure to tailor the agreement's scope and duration to your specific industry and state laws.

• Not To Compete Agreement: Basic version used for general employment relationships, covering core competition restrictions
• Non Compete Non Solicitation Agreement: Expanded protection that prevents both competing and poaching customers or employees
• Non Compete Shareholders Agreement: Specialized version for business owners and investors to protect company interests
• Non Compete Letter: Simplified format for quick implementation or temporary arrangements
• Non Compete Agreement After Resignation: Post-employment agreement often tied to severance or separation benefits

• Employers: Companies and business owners who need to protect trade secrets, customer relationships, and competitive advantages from departing employees
• Executives: Senior leaders and C-suite officers who commonly sign these as part of their employment contracts
• Sales Professionals: Representatives with deep customer relationships and market knowledge who could impact business if they leave
• Technical Experts: Engineers, developers, and specialists with access to proprietary information or processes
• Legal Counsel: Attorneys who draft, review, and ensure agreements comply with state-specific requirements and remain enforceable
• HR Managers: Professionals who implement and maintain these agreements as part of employment documentation

• Business Scope: Define your industry, competitive landscape, and specific activities you need to protect
• Geographic Boundaries: Map out reasonable territorial limits based on your market presence and state laws
• Time Duration: Determine appropriate restriction period, typically 1-2 years in most states
• Employee Details: Gather role descriptions, access levels to sensitive information, and customer relationships
• State Requirements: Review local enforcement rules, as they vary significantly across states
• Consideration: Document what valuable benefits the employee receives in exchange for signing
• Documentation: Collect relevant business records showing legitimate interests needing protection

• Identification: Full legal names and addresses of both employer and employee
• Consideration: Clear statement of what employee receives in exchange for signing (job, promotion, bonus)
• Scope of Restrictions: Specific prohibited activities and competitors
• Duration: Clear time period for restrictions, typically 1-2 years
• Geographic Area: Precise description of restricted territory
• Protected Information: Definition of confidential information and trade secrets
• Enforcement Terms: Remedies and consequences for violations
• Severability Clause: Provision keeping rest of agreement valid if one part is struck down
• Signatures: Dated signatures of all parties with acknowledgment of terms

A Non-Compete Agreement is often confused with a Non-Disclosure Agreement, but they serve distinct purposes. While both protect business interests, they operate differently and are often used together for comprehensive protection.

• Scope of Protection: Non-competes prevent working for competitors or starting competing businesses, while NDAs specifically protect confidential information from being shared or used
• Duration and Enforcement: Non-competes typically last 1-2 years and face stricter court scrutiny, while NDAs can remain effective indefinitely and are more readily enforced
• Geographic Limits: Non-competes must specify reasonable territorial restrictions, but NDAs apply regardless of location
• Legal Requirements: Non-competes require valid consideration and face varying state restrictions (some states ban them), while NDAs generally face fewer regulatory hurdles