Employment and people
Non-compete agreement
A promise not to do competing work for a period after a relationship ends — sometimes in an employment contract, sometimes in a business sale, sometimes standing on its own. It is the most jurisdiction-dependent paper in this catalogue: some legal systems will not enforce one against an employee at all, some require payment for the restricted period, and others test it against what is reasonable in scope, area and length. The document records what was agreed; whether it holds is decided elsewhere.
- In the catalogue
- Employment and people
- Where it can live
- Any of the 184 governing laws
Who uses one
- Employers asking senior staff or founders to agree a restricted period.
- Buyers of a business who do not want the seller opening the same shop next door.
- A person being asked to sign one and wanting to know what it actually restricts.
What you are deciding
- What activity is restricted, described narrowly enough to be checked
- Where the restriction applies
- How long it runs after the relationship ends
- Whether anything is paid during the restricted period
- Which businesses count as competitors
- Whether it survives if the person is dismissed
- Whether local law permits a restriction of this kind at all
Blanks you leave stay blank and wait in the room. Nothing is filled in from a guess.
The sections a draft usually has
- 1The parties
- 2Definitions of the restricted activity
- 3The restricted period
- 4The restricted area
- 5Consideration
- 6Carve-outs
- 7Severability
- 8Governing law and jurisdiction
A general outline, not a required one. What turns up in a draft follows what you described. A contract is written in the order a contract is read.
What people call it
The names this kind of paper goes by. They are here because people search for them. They also filter the catalogue. They are not a wordlist the door matches. At the composer you describe the deal in your own words instead.
- non compete agreement
- noncompete
- restrictive covenant
- non competition clause
- covenant not to compete
- restraint of trade agreement
Questions people ask
- Are non-competes enforceable?
- It depends entirely on where you are. Some jurisdictions treat employee non-competes as void, some enforce them only if narrow and paid for, and some apply a general reasonableness test. Ask a lawyer before relying on one.
- How is a non-compete different from a non-solicit?
- A non-compete restricts working in a field or area; a non-solicit restricts approaching particular customers or staff. The second is narrower and is more often upheld where the first is not.
- Why do these clauses name a governing law so carefully?
- Because the answer changes with the system deciding it. The choice of law and the place a dispute is heard are among the most consequential lines in this kind of paper.
General answers about the document. Not advice about your situation. Not written about any one country.
Where it lives
A contract names the legal system it is governed by. That is a separate decision from which paper it is. You pick it at the door, from any of the 184 units in Governing law, including England and Wales, Delaware, California and New York.
You do not start from this page. Describe the deal in one sentence at the door. Read the draft back in plain language, in the order a contract is read.
Start it at the door →Related kinds