Non-Compete Sample Clauses

Non-Compete. Except as otherwise provided in this Agreement, during the Employment Term and during the Restriction Period, the Executive shall not directly or indirectly, alone or in association with any other Person, manage, operate, join, control, be employed by, or participate in the partnership, management, operation or control of, or be connected in any manner with, including but not limited to as a director, officer, partner, member, lender, vendor, consultant, employee, advisor, agent, independent contractor or a controlling shareholder of an entity that engages in the exploration or development activities for oil and gas, molybdenum or renewable resource development (the “Business”). For purposes of this Section 8, the Executive covenants not to compete with the Company in its established or anticipated businesses. To remedy the competition provision of this contract the Executive must bring in writing any prospective opportunities he learns of and desires to participate in to the Board of Directors and make such opportunity available to the Company. In the event that the Company advises the Executive in writing that it has no interest in the prospect, or business opportunity the Executive is free to move forward however he chooses. Such written notice will not be unreasonably withheld.
Non-Compete. During the term of this Agreement and for a period of twelve (12) months following the Director’s removal or resignation from the Board of Directors of the Company or any of its subsidiaries or affiliates (the “Restricted Period”), the Director shall not, directly or indirectly, (i) in any manner whatsoever engage in any capacity with any business competitive with the Company’s current lines of business or any business then engaged in by the Company, any of its subsidiaries or any of its affiliates (the “Company’s Business”) for the Director’s own benefit or for the benefit of any person or entity other than the Company or any subsidiary or affiliate; or (ii) have any interest as owner, sole proprietor, stockholder, partner, lender, director, officer, manager, employee, consultant, agent or otherwise in any business competitive with the Company’s Business; provided, however, that the Director may hold, directly or indirectly, solely as an investment, not more than one percent (1%) of the outstanding securities of any person or entity which is listed on any national securities exchange or regularly traded in the over-the-counter market notwithstanding the fact that such person or entity is engaged in a business competitive with the Company’s Business. In addition, during the Restricted Period, the Director shall not develop any property for use in the Company’s Business on behalf of any person or entity other than the Company, its subsidiaries and affiliates.
Non-Compete. Employee hereby agrees that for a period commencing on the date hereof and ending on the Termination Date, and thereafter, through the later of (a) the period ending on the first anniversary of the Termination Date or (b) the period ending at the conclusion of the Severance Period (collectively, the “Restrictive Period”), he shall not, directly or indirectly, as employee, agent, consultant, stockholder, director, co-partner or in any other individual or representative capacity, own, operate, manage, control, engage in, invest in or participate in any manner in, act as a consultant or advisor to, render services for (alone or in association with any person, firm, corporation or entity), or otherwise assist any person or entity (other than the Company) that engages in or owns, invests in, operates, manages or controls any venture or enterprise that directly or indirectly engages or proposes to engage in any element of the Business anywhere within a 100-mile radius of the Chicago metropolitan area or within a 100-mile radius of any area (or in the event such area is a major city, the metropolitan area relating to such city) in which the Company on the Termination Date engages in any element of the Business (the “Territory”); provided, however, that nothing contained herein shall be construed to prevent Employee from investing in the stock of any competing corporation listed on a national securities exchange or traded in the over-the-counter market, but only if Employee is not involved in the business of said corporation and if Employee and his associates (as such term is defined in Regulation 14(A) promulgated under the Securities Exchange Act of 1934, as in effect on the date hereof), collectively, do not own more than an aggregate of 3% of the stock of such corporation. With respect to the Territory, Employee specifically acknowledges that the Company intends to expand the Business into and throughout the United States.
See more samples of Non-Compete

Non-Compete: Everything you need to know

The non-compete agreement is used to avoid competition between two parties, typically an employee and an employer. The agreement puts a prohibition on the employee from working for or becoming a competitor for a certain period. The non-compete agreement also puts restrictions on the party (employee here) from working for a competitor in the same market or starting up another business in the same field.

The agreement, also known as a non-compete covenant, comes with a certain set of features. some key features of such an agreement are:

  • Duration: The agreement has a finite time duration till which it remains active. The agreement, in most cases, is valid till the completion of the period of employment. The agreement is a part of the Contract Act that operates in our country.
  • Legality: A non-compete agreement comes with statutory or legal backing. It is regulated by respective acts of each of the states in the US; for example, the Fla. Stat. § 542.335, Section 542.335(1)(b) provides for enforceability in Florida. The section also provides for the protection of the other party's (Employer) interests under the agreement.
  • Leave Clause: The agreement also carries a leave clause, also known as the garden leaves clause. As per it, the employer is required to pay salaries to the employees during the period of the agreement. The clause allowing for the salaries post-termination of the contract is, however, something not seen in most of such agreements generally.
  • Unilateral Obligation: The non-compete type of agreements come with a unilateral obligation. Such agreements are the ones where one party shares confidential information with the other. Thus, the obligation is on the other party to keep the promise. In this case, the obligation is on the employees to keep the agreement.
  • The Clause of Exception: Non-compete agreement, like most legal agreements, carries an exception clause. This calls for the breach of agreement on the part of the employee in certain exceptional cases. In that case, the employee would not be charged guilty for breaking the agreement.
  • Compensation Clause: The compensation clause comes into effect in case of willful default of the agreement by the 2nd party, that is, an employee. It calls the employee to reimburse the employer for the breach of contract causing the damage to the business of the employee.

Furthermore, the non-compete agreement can have additional clauses and features. However, the above-mentioned ones are the basic or core of the features that are common to all such agreements. The addition of features of more clauses and conditions is also based on the mutual understanding and agreement of the parties involved.

How It Works

Having understood the features of the non-compete agreement, it's important to know how it is put to work or what enforceability.

  • The agreement has a specified date from which it comes into effect. That date is usually the date on which both parties sign the given agreement.
  • The agreement also has a specific location that would be covered under its ambit. Say, for example, if the agreement is signed in Florida, then the obligations under the agreement may be applicable for that very region only. That is, the 2nd party or employee is free to compete in any other region.
  • Jurisdiction is another important part of the enforceability of the agreement. That is, in case of the breach of the agreement, judicial authorities of which region would be reached first by the aggrieved party. Taking the example of New York again, we would say that the jurisdiction of such an agreement would be New York County Supreme Court and other lower judicial authorities in the state.
  • The amount of compensation in case of breach of the contract to be provided by the 2nd party (Employee) is also a part of the working of the agreement. Further, it also provides for how compensation would be provided to the aggrieved party.
  • In case the agreement is signed for an employing company that is a part of a group and employs, the employment agreement does not need to be applicable for all firms. That is, the agreement can apply to the firm employing the employee in actuality and providing for the salary. It would not be applicable for the other firms of the group generally. However, as a special clause or extension, this can be made possible. Provided if both parties agree.

Read more on the implementation of non-compete clauses in US labor markets here.

Benefits of Non-Compete Agreement

The non-compete agreement comes with its own sets of benefits for party 1, that is, the employee. As by now, we have seen that it prevents the business competition for the employers by its very nature it brings in other benefits too. somese benefits include:

  • One major benefit of the agreement is that it safeguards the secrets of business to be utilized by the employer. That is, it prevents the exploitation of employers by safeguarding trade secrets.
  • Another benefit of the agreement for the employer is that it incentivizes providing specialized training to the employer as the agreement comes with an obligation period which can sync with a minimum service period post-training for the employees.
  • The agreement also prevents unfair competition, which ultimately has an effect on the consumers in the market.

Learn why companies use non-compete agreements in this article.

Drawbacks of Non-Compete Agreement

Along with its benefits (which are in favor of the employer as per the nature of the agreement), the non-compete agreement carries some drawbacks. These are mostly from the perspective of the employee. some drawbacks include:

  • One major drawback is that the agreement reduces the bargaining capacity of the employee. Further, it reduces the scope of exploration of opportunities for them.
  • The agreement kind of puts restrictions on the employee, which doesn't go well with them. An employee likes to work with free will without any restrictions. Making them sign an agreement as compulsion can be a turn-off for them. This can hinder performance as well.
  • The agreement is costly to enforce. For a firm, it might be manageable to manage the legal expenses for enforcement. However, most of the time, an employee can't manage it. Thus, it is a burden from an employee's perspective.
  • Geography, or what is called location for enforcement, is a limitation of the agreement that surely affects the employers. The agreement carries its enforceability and jurisdiction for a particular location. Thus, there is a threat to business even if the agreement's terms are not breached. This article details the enforceability of non-compete agreements in different US states.

A non-compete agreement carries its pros and cons. One set of features gives an edge to the employee while others tilt it in favor of the employer. However, the overall nature of the agreement keeps the employer's perspective in front.

More Samples of Non-Compete

Non-Compete. During the Restricted Period (as hereinafter defined), the Executive shall not in the United States of America, or in any foreign country, directly or indirectly, (i) engage in the Restricted Activity for the benefit of any person or entity other than the Company, Thomson and their affiliated companies; (ii) be an employee or consultant of, or provide services to, Factiva or Lexus/Nexis or any of their respective direct or indirect subsidiaries; (iii) have an interest in any person engaged in the Restricted Activity in any capacity, including, without limitation, as a partner, shareholder, officer, director, principal, agent, employee, trustee or consultant or any other relationship or capacity; provided, however, the Executive may own, directly or indirectly, solely as an investment, securities of any person which are publicly traded if the Executive (a) is not a controlling person of, or a member of a group which controls, such person, and (b) does not, directly or indirectly, own 1% or more of any class of securities of such person; or (iv) interfere with business relationships (whether formed heretofore or hereafter) between the Company or any of its affiliates and customers or suppliers of the Company or any of its affiliates. The term "Restricted Period" shall mean the period ending on the date that is (x) with respect to clause (ii) of this Section 5(A), eighteen (18) months following the end of the Executive's employment by the Company (or any affiliate of the Company) whether or not pursuant to this Agreement and (y) with respect to clauses (i), (iii) and (iv) of this Section 5(A), twelve (12) months following the end of the Executive's employment by the Company (or any affiliates of the Company) whether or not pursuant to this Agreement.
Non-Compete. You agree that for the period commencing on the date of this Agreement and ending upon the date of the last severance payment hereunder, Employee shall not, directly or indirectly, as employee, agent, consultant, stockholder, director, partner or in any other individual or representative capacity, own, operate, manage, control, engage in, invest in or participate in any manner in, act as a consultant or advisor to, render services for (alone or in association with any person, firm, corporation or entity), or otherwise assist, for compensation or otherwise, any person or entity that engages in or owns, invests in, operates, manages or controls any venture or enterprise that is a direct competitor of DTS; provided, however, that nothing contained in this Agreement shall be construed to prevent you from investing in the stock of any competing corporation listed on a national securities exchange or traded in the over-the-counter market, but only if: (1) you are not involved in the business of said corporation, and (2) if you and your affiliates collectively do not own more than an aggregate of 5% of the stock of such corporation, and (3) such investment does not violate the Company’s Insider Trading Policy.
Non-Compete. During the period of Executive’s employment and for a period of one (1) year following termination of this Agreement and Executive’s employment for any reason (the “Restricted Period”), Executive will not directly or indirectly, on his behalf, or as a partner, officer, director, trustee, member, employee, or otherwise, within the United States or in any foreign market in which Executive was engaged in activities on behalf of the Company or any of its subsidiaries, own, engage in or participate in, in any way, any business that is similar to or competitive with any actual or planned business activity engaged in or planned by the Company or any of its subsidiaries at the time the employment under this Agreement was terminated. However, this Agreement shall not prohibit ownership by Executive of up to 2% of the shares of stock of any corporation the stock of which is listed on a national securities exchange or is traded in the over-the-counter market.
Non-Compete. The Director agrees that during the Directorship Term and for a period of Three (3) years thereafter, he shall not in any manner, directly or indirectly, through any person, firm or corporation, alone or as a member of a partnership or as an officer, director, stockholder, investor or employee of or consultant to any other corporation or enterprise; engage in the business of developing, marketing, selling or supporting technology to or for businesses in which the Company engages in or in which the Company has an actual intention, as evidenced by the Company's written business plans, to engage in, within any geographic area in which the Company is then conducting such business. Nothing in this Section 6 shall prohibit the Director from being (i) a stockholder in a mutual fund or a diversified investment company or (ii) a passive owner of not more than three percent of the outstanding stock of any class of securities of a corporation, which are publicly traded, so long as the Director has no active participation in the business of such corporation.
Non-Compete. The grantee agrees that during the term of grantee’s employment and for a period of two years thereafter (the “Coverage Period”) the grantee will not engage in, consult with, participate in, hold a position as shareholder, director, officer, consultant, employee, partner or investor, or otherwise assist any business entity (i) in any State of the United States of America or (ii) in any other country in which the Company has business activities, in either case, that is engaged in any activities which are competitive with the business of providing healthcare or other personnel on a temporary basis to hospitals, healthcare facilities or other entities and any and all business activities reasonably related thereto in which the Company or any of its divisions, affiliates or subsidiaries are then engaged.
Non-Compete. (i) During the Employment Period and for a period of one year thereafter, the Employee expressly shall not, directly or indirectly, without the prior written consent of the CEO and the Board, own, manage, operate, join, control, franchise, license, receive compensation or benefits from, or participate in the ownership, management, operation, or control of, or be employed or be otherwise connected in any manner with, a Competitive Business (as hereinafter defined); provided, however, that the foregoing shall not prohibit the Employee from acquiring, solely as a passive investment and through market purchases, securities of any entity which are registered under Section 12(b) or 12(g) of the Securities Exchange Act of 1934 and which are publicly traded, so long as the Employee is not part of any control group of such entity and such securities, alone or if converted, do not constitute more than 10% of the outstanding voting power of that entity. For purposes of this Section 7(c), “Competitive Business” means any enterprise (other than the Corporation and its affiliates) in the business of manufacturing and/or selling coconut- based products, natural energy drinks or sustainable water.
Non-Compete. Moylan hereby covenants and agrees that Moylan will not, during the Term or for a period of two (2) years immediately after the Term, without the prior written consent of the Company, directly or indirectly, on his own behalf or in the service or on behalf of others, whether or not for compensation, engage in any business activity, or have any interest in any person, firm, corporation or business, through a subsidiary or parent entity or other entity (whether as a shareholder, agent, joint venturer, security holder, trustee, partner, consultant, creditor lending credit or money for the purpose of establishing or operating any such business, partner or otherwise) with any Competing Business in the Covered Area. For the purpose hereof “Competing Business” means any provider of memory products or memory performance solutions other than Dataram Memory if Moylan is providing services to Dataram Memory as set forth herein, any other business engaged in or planned by the Company on the date hereof and within a period of two (2) years prior to the date hereof, and any mining or resource business conducted by or similar to the business of U.S Gold and its subsidiaries and (ii) “Covered Area” means all geographical areas of the United States and foreign jurisdictions where Company then has offices and/or sells its products directly or indirectly through distributors and/or other sales agents. Notwithstanding the foregoing, Moylan may own shares of companies whose securities are publicly traded, so long as ownership of such securities do not constitute more than one (1%) percent of the outstanding securities of any such company.