Sample Noncompetition and Nonsolicitation Agreement
What is this form?
The Sample Noncompetition and Nonsolicitation Agreement is a legal document that outlines the obligations of an employee to refrain from competing against their employer after their employment ends. This agreement is particularly important in protecting a corporation's business interests by preventing former employees from taking proprietary knowledge to competitors. Unlike standard employment contracts, this agreement specifically addresses competition and solicitation issues over specified periods.
Form components explained
- Parties involved: Identifies the corporation and the employee entering into the agreement.
- Non-compete clause: Prohibits the employee from working with competing entities for a specified time after the end of employment.
- Non-solicitation clause: Prevents the employee from soliciting business or employees from the company for a defined duration.
- Payment terms: Specifies compensation for the employee in exchange for their agreement not to compete.
- Severability clause: Addresses the enforcement of the agreement's provisions if part of the agreement is found invalid.
When this form is needed
This form is utilized when a corporation seeks to protect its business interests by ensuring that departing employees do not leverage proprietary information or customer relationships against the company. It is particularly useful during mergers, acquisitions, or when an employee in a key position leaves the company.
Who this form is for
- Corporations and businesses looking to safeguard their market position.
- Employees who are in leadership roles or have access to sensitive corporate information.
- Employers wanting to clearly outline the expectations and limitations placed on departing employees.
Steps to complete this form
- Identify the parties involved: Fill in the names of the corporation and the employee.
- Specify the dates: Enter the dates relevant to the agreement and the end of employment.
- Outline the non-compete and non-solicitation terms: Clearly define what actions the employee is prohibited from taking post-employment.
- Detail the payment terms: State the compensation the employee will receive for agreeing to the terms.
- Include signatures: Ensure all parties sign the document to make it legally binding.
Is notarization required?
This form usually doesn’t need to be notarized. However, local laws or specific transactions may require it. Our online notarization service, powered by Notarize, lets you complete it remotely through a secure video session, available 24/7.
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Make edits, fill in missing information, and update formatting in US Legal Forms—just like you would in MS Word.
Download a copy, print it, send it by email, or mail it via USPS—whatever works best for your next step.
Sign and collect signatures with our SignNow integration. Send to multiple recipients, set reminders, and more. Go Premium to unlock E-Sign.
If this form requires notarization, complete it online through a secure video call—no need to meet a notary in person or wait for an appointment.
We protect your documents and personal data by following strict security and privacy standards.
Common mistakes
- Failing to specify the time duration for non-compete and non-solicitation clauses.
- Not clearly defining what constitutes competition or solicitation.
- Using vague language that may be challenged in court.
Advantages of online completion
- Convenient access to customizable templates drafted by legal professionals.
- Easy to complete and download from any device.
- Reliability of legal content tailored to meet specific business needs.
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FAQ
Voiding a non-compete contract is possible in certain circumstances. For instance, if you can prove that you never signed the contract, or if you can demonstrate that the contract is against the public interest, you may be able to void the agreement.
Roughly half of businesses use noncompete agreements Roughly half, 49.4%, of responding establishments indicated that at least some employees in their establishments were required to enter into a noncompete agreement.
California - Non-compete clauses are not enforceable under California law. However, LegalNature's non-compete agreement may still be used to prohibit the employee from soliciting customers and other employees away from the employer.Non-compete clauses are generally not enforceable.
Non-solicitation agreements prevent a departing employee from soliciting the old employer's customers or workforce to do business or work with a new employer. These clauses are less burdensome than non-competes that prohibit any work for a competitor or bar any service to a former employer's customers.
1Study your competition.2Write up the agreement.3Have your agreement reviewed by a legal professional.4Present the non-compete contract to your employee.5If everyone is satisfied, sign and date the agreement.
Study your competition. Write up the agreement. Have your agreement reviewed by a legal professional. Present the non-compete contract to your employee. If everyone is satisfied, sign and date the agreement.
1Don't sign.2Build your book independently.3Carve out pre-existing relationships.4Require for cause termination as the trigger.5Provide for a payoff.6Turn clients into friends.7Don't treat clients as trade secrets.8Invest in your own business.
A traditional non-compete stops an employee from working for a competitor in a certain geographical area for a certain amount of time after leaving the company. A non-solicitation agreement prevents an employee from poaching customers, contracts or other employees from the company that first hired them.
In contrast, in many industries, a Non-Compete with a duration of 6-months will be considered reasonable, and therefore enforceable. The general rule is that the duration of the agreement should not exceed the time reasonably necessary to protect the employer's legitimate business interests.
