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Non Solicitation and Non Compete Agreement template
Non Solicitation and Non Compete Agreement sample


What is Non Solicitation and Non Compete Agreement?

Non Solicitation and Non Compete Agreement A Non-Solicitation and Non-Compete Agreement restricts solicitation of clients or competition by employees or parties, specifying non-solicitation and non-compete terms, duration, and geographic limitations.



Sample template:



Non-Solicitation and Non-Compete Agreement


1. Definitions and Interpretation

1.1. Definitions


For the purposes of this Agreement, the following terms shall have the following meanings:


"Affiliate" means any entity that directly or indirectly controls, is controlled by, or is under common control with another entity.


"Business" means the business of the Company, including but not limited to the development, marketing, distribution, or provision of goods or services provided by the Company.


"Company" means [Insert Company Name], a [Insert State of Incorporation] corporation, its subsidiaries, and affiliates.


"Confidential Information" means any and all non-public information that is a trade secret under applicable law or information related to the Company's Business, including but not limited to, customer information, supplier information, know-how, trade secrets, financial information, and proprietary information of the Company.


"Employee" means the individual who is party to this Agreement and is an employee, contractor, or agent of the Company.


"Effective Date" means the date first set forth above.


"Restricted Period" means the period commencing on the Effective Date and continuing for the [Insert Time Duration] following the termination of the Employee's relationship with the Company for any reason whatsoever.


"Territory" means the geographic area within which the Employee conducted or supervised the conduct of the Company's Business during the last twelve (12) months of the Employee's relationship with the Company.



2. Non-Solicitation

2.1. Prohibition on Solicitation of Clients


During the Restricted Period, the Employee shall not, directly or indirectly, solicit business from, or attempt to sell, license, or provide, competitive products or services to, any Client of the Company, whether for themselves or on behalf of any other person, business, or entity, where such solicitation relates to the Business.


2.2. Prohibition on Solicitation of Employees and Contractors


During the Restricted Period, the Employee shall not, directly or indirectly, (a) hire or attempt to hire any person who was an employee or contractor of the Company at any time during the twelve (12) months immediately preceding the termination of the Employee's relationship with the Company, or (b) solicit, induce, or attempt to induce any person who was an employee or contractor of the Company during such period to terminate or modify their relationship with the Company.



3. Non-Competition

3.1. Prohibition on Competing with the Company


During the Restricted Period, the Employee shall not, directly or indirectly, own, manage, operate, control, be employed by (whether as an employee, consultant, independent contractor or otherwise, and whether or not for compensation), engage, or participate in any capacity in any Competitive Business (as defined below) within the Territory. For purposes of this section, "Competitive Business" means any business that is engaged in a business that is directly or indirectly competitive with the Business.



4. Exceptions to Non-Compete and Non-Solicitation Provisions

4.1. Passive Investment


Notwithstanding any of the provisions of Sections 2 and 3, the Employee may hold not more than a one percent (1%) ownership interest in any entity engaged in a Competitive Business, provided that such ownership shall be solely as a passive investment and the Employee shall not participate in the management or control of the Competitive Business in any capacity.


4.2. Prior Written Consent


The non-solicitation and non-compete restrictions set forth in Sections 2 and 3 shall not apply to any activity that has been approved in writing by the Company prior to the commencement of such activity.



5. Confidentiality

The Employee agrees that, during the Employee's employment or engagement with the Company and at all times following the termination of such employment or engagement, the Employee shall not disclose, release, transfer, or use any Confidential Information for any purpose whatsoever, other than as necessary to perform services for the Company or as required by law.



6. Remedies

6.1. Injunctive Relief


In the event of any actual or threatened breach of any provision of Sections 2, 3, or 5 of this Agreement by the Employee, the Company shall be entitled to seek and obtain immediate injunctive relief, in addition to any other remedies at law or in equity, without the necessity of posting bond or other security.


6.2. Liquidated Damages


In the event that the Employee breaches any provision of Sections 2 or 3, the Company shall be entitled to recover from the Employee as liquidated damages, and not as a penalty, the amount of [Insert Amount] Dollars ($[Insert Amount]) for each such breach, in addition to any other remedies at law or in equity.



7. Governing Law and Dispute Resolution

This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the United States and the State of [Insert State]. Any disputes arising out of, relating to, or connected with this Agreement, shall be resolved by final and binding arbitration administered by the American Arbitration Association, under its Commercial Arbitration Rules in [Insert City and State]. The parties hereby waive any right to a trial by jury for the resolution of any dispute arising out of, relating to, or connected with this Agreement.



8. Severability

If any provision of this Agreement is held by a court of competent jurisdiction or arbitrator to be unenforceable for any reason, the remaining provisions hereof shall be unaffected and shall remain in full force and effect as if such unenforceable provision had not been included herein.



9. Entire Agreement

This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof, and supersedes all prior and contemporaneous agreements, understandings, negotiations, and discussions, whether oral or written, of the parties in connection with the subject matter hereof.



10. Amendments

This Agreement may not be amended, modified, or supplemented, in whole or in part, except by an agreement in writing signed by the parties hereto.



11. Counterparts"

This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument."



[Insert Execution Block and Signature Lines for Company and Employee]

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Main Sections of a Non Solicitation and Non Compete Agreement


In this Non Solicitation and Non Compete Agreement, you will see the following sections:

  1. Definitions and Interpretation
  2. Non-Solicitation
  3. Non-Competition
  4. Exceptions to Non-Compete and Non-Solicitation Provisions
  5. Confidentiality
  6. Remedies
  7. Governing Law and Dispute Resolution
  8. Severability
  9. Entire Agreement
  10. Amendments
  11. Counterparts


About each Section - Analysis and Summary:

  1. Definitions and Interpretation: This section explains the meaning of specific terms used throughout the agreement, such as "Affiliate," "Business," "Company," "Confidential Information," "Employee," "Effective Date," "Restricted Period," and "Territory." Think of it as a glossary to help you understand the rest of the document.

  2. Non-Solicitation: This section prohibits the Employee from trying to steal the Company's clients or employees during the Restricted Period. It's like telling someone they can't steal your friends or teammates after a breakup.

  3. Non-Competition: This section prevents the Employee from working for or starting a competing business within the Territory during the Restricted Period. It's like telling someone they can't join the rival team or start their own team to compete against you after a breakup.

  4. Exceptions to Non-Compete and Non-Solicitation Provisions: This section outlines specific situations where the Employee is allowed to bypass the non-compete and non-solicitation restrictions, such as owning a small, passive investment in a competing business or obtaining written consent from the Company. It's like saying there are certain exceptions to the "no competing" rule if specific conditions are met.

  5. Confidentiality: This section requires the Employee to keep the Company's confidential information secret, both during and after their employment. It's like swearing someone to secrecy about your personal life and not allowing them to share your secrets with others.

  6. Remedies: This section explains the consequences if the Employee breaks the rules in the agreement, such as the Company being able to seek immediate legal action or monetary damages. It's like outlining the punishments for breaking the rules in a game.

  7. Governing Law and Dispute Resolution: This section states that any disputes related to the agreement will be resolved through arbitration and governed by specific laws. It's like agreeing to play by a certain set of rules and having a referee to resolve any disputes that arise during the game.

  8. Severability: This section explains that if any part of the agreement is found to be unenforceable, the rest of the agreement will still be valid. It's like saying that if one rule in a game is found to be unfair, the rest of the rules still apply.

  9. Entire Agreement: This section states that this agreement is the complete and final understanding between the parties regarding the subject matter. It's like saying that this document is the final word on the topic, and no previous discussions or agreements matter.

  10. Amendments: This section explains that the agreement can only be changed if both parties agree to the changes in writing. It's like saying that the rules of a game can only be changed if everyone playing agrees to the new rules.

  11. Counterparts: This section allows the agreement to be signed in multiple copies, each considered an original. It's like having multiple copies of a contract, each one just as valid as the others.

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