Non-Compete Agreement

Restricts ex-employee from joining competitors for a defined period after termination.

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NON-COMPETE AGREEMENT

This Non-Compete Agreement ("Agreement") is entered into on May 4, 2026 between Acme Corporation ("Company") and Jordan Taylor ("Employee").

WHEREAS, Employee will or does hold a position with the Company that provides access to confidential information, customer relationships, and goodwill that the Company has substantial legitimate interest in protecting; and

WHEREAS, in consideration of Employee's employment, access to confidential information, and the compensation set forth herein, Employee agrees to the following restrictions;

NOW THEREFORE, the parties agree:

1. NON-COMPETITION

   For a period of 12 months following the termination of Employee's employment with the Company (whether termination is voluntary or involuntary, with or without cause), Employee shall not, directly or indirectly:

   (a) Own, manage, operate, control, or be employed by any business that competes with the Company in cloud-based collaboration software for enterprise teams, within the geographic area of United States and Canada.
   (b) Solicit any customer of the Company with whom Employee had material contact during the 12 months preceding termination.
   (c) Solicit, recruit, or hire any employee of the Company who was employed during the 6 months preceding Employee's termination.

2. CONSIDERATION

   In consideration of Employee's compliance with the restrictions in Section 1, the Company will pay Employee: 50% of last base salary, paid monthly during the restricted period. Payment is contingent upon Employee's continued compliance and may be ceased upon material breach.

3. SCOPE

   The restrictions in Section 1 are limited to the specific industry described and the geographic area listed. Employee remains free to work in any business outside the defined competitive scope, including non-competing roles at competitors (e.g. an internal recruiter at a competitor in a non-overlapping product line).

4. ACKNOWLEDGEMENT OF REASONABLENESS

   Employee acknowledges that the duration, geography, and scope of these restrictions are reasonable and necessary to protect the Company's legitimate business interests. Employee further acknowledges that Employee has had the opportunity to consult independent counsel before signing this Agreement.

5. JUDICIAL MODIFICATION

   If a court finds any restriction in this Agreement to be unenforceable as written, the parties agree the court may modify the restriction to the minimum extent necessary to make it enforceable, and the modified restriction shall be enforced.

6. INJUNCTIVE RELIEF

   Employee acknowledges that breach of this Agreement would cause irreparable harm to the Company. The Company is entitled to seek injunctive relief in addition to any other available remedies.

7. EXISTING OBLIGATIONS

   Employee represents that signing this Agreement does not breach any other obligation Employee owes to a prior employer or other third party.

8. GOVERNING LAW & VENUE

   This Agreement is governed by the laws of New York, without regard to conflict of laws. Any dispute arising from this Agreement shall be brought exclusively in the state or federal courts located in New York.

9. SEVERABILITY

   If any provision is held invalid, the remainder of the Agreement shall remain in full effect.


COMPANY:                                     EMPLOYEE:


_______________________________              _______________________________
Acme Corporation                                Jordan Taylor

By: __________________________               Date: _______________
Title: _______________________
Date: ________________________

About this template

A non-compete agreement is one of the most-litigated and most-restricted documents in employment law. The 2024 FTC ruling attempted a near-total ban on non-competes nationwide, partially blocked by federal courts but signaling the regulatory direction. As of 2026, non-competes are entirely unenforceable in California, North Dakota, Oklahoma, Minnesota, and Washington DC; significantly restricted in many other states (banned for low-wage workers, limited duration, requires garden-leave pay); and broadly enforceable only in a shrinking set of jurisdictions including New York, Florida, and Texas โ€” with strict reasonableness review. The three pillars of an enforceable non-compete in remaining jurisdictions are: limited duration (6-12 months typical, 24+ months almost always rejected), narrow geographic scope, and a precisely defined competitive business. Adding garden-leave pay (continuing to pay the employee during the restricted period) materially increases enforceability across all jurisdictions and is now mandatory in some states.

When to use it

  • Hiring an executive or senior employee with access to strategic information.
  • Engaging a sales professional with deep customer relationships.
  • Acquiring a company where the seller becomes an employee.
  • Roles where the employee will develop or have access to trade secrets.

What to include

  • Defined competitive business (specific product/service category).
  • Geographic scope (state / region / where business operates).
  • Duration (typically 6โ€“24 months).
  • Customer non-solicit + employee non-solicit.
  • Consideration / garden-leave pay (often required).
  • Acknowledgement of reasonableness.
  • Judicial modification clause.
  • Governing law.

Frequently asked

Effectively no โ€” California Business and Professions Code ยง16600 voids almost all employment non-competes, and California courts have repeatedly refused to enforce non-competes signed under another state's law if the employee resides and works in California. Even sale-of-business non-competes are narrowly construed. Use customer non-solicits and trade-secret protection instead.
โš  Legal disclaimer. This template is provided for informational purposes only and is not a substitute for legal advice from a qualified attorney. Always consult a licensed professional before using this document for any binding agreement.

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