This form is a Post-Employment Restrictions on Competition for use with exiting employees exposed to commercial trade secrets or other confidential information as part of their job. This form includes a Noncompetition Covenant as well as other relevant clauses, such as a Savings Clause, a Consulting Option, and an Assignment Clause, that can be integrated into any agreement with the former employee.
Delaware Post-Employment Restrictions on Competition, also known as non-compete agreements or restrictive covenants, are contractual agreements that restrict an employee's ability to compete with their former employer after ending their employment. These agreements are aimed at protecting employers from losing valuable information, trade secrets, and client relationships to competitors through the actions of former employees. Under Delaware law, post-employment restrictions on competition are generally enforceable if they are reasonable in scope, duration, and geographic limitation. However, it is important to note that such agreements must not unduly restrict an employee's ability to seek employment or create a hardship for them. There are primarily three types of Delaware post-employment restrictions on competition: 1. Non-competition agreements: These agreements prevent former employees from engaging in activities or working in a similar capacity that directly competes with their former employer's business. The restrictions typically include limitations on working within a certain geographic area and for a defined period, usually ranging from months to a few years. 2. Non-solicitation agreements: These agreements prohibit former employees from soliciting or contacting the employer's clients or customers, as well as soliciting other employees to leave the company and join a new employer. This helps protect the employer's relationships with its clients and prevents the circumvention of business opportunities. 3. Non-disclosure agreements: Although not strictly considered a post-employment restriction on competition, non-disclosure agreements (NDAs) play a crucial role in protecting an employer's proprietary information, trade secrets, and other confidential data. These agreements prevent former employees from disclosing or using any confidential information obtained during their employment for personal or competitive gain. It is important to ensure that any post-employment restrictions on competition in Delaware are reasonable and geographic scope to be enforced by courts. Courts closely scrutinize these agreements to prevent unfair limitations on employees' ability to secure gainful employment. Overall, Delaware post-employment restrictions on competition are intended to strike a balance between protecting an employer's legitimate business interests and ensuring the rights of employees to pursue their careers. Employers should seek legal advice and draft agreements carefully to ensure compliance with Delaware laws and maximize the enforceability of these agreements.
