Non-compete clause: Copy, customize, and use instantly
Introduction
A non-compete clause restricts one party (usually an employee or contractor) from engaging in business activities that directly compete with the other party (often an employer or business partner) for a specified period and within a defined geographic area after the termination of the relationship. This clause is designed to protect confidential information, trade secrets, and business interests.
Below are templates for non-compete clauses tailored to different scenarios. Copy, customize, and insert them into your agreement.
General non-compete clause
This variation applies to a broad non-compete agreement.
The [Employee/Contractor] agrees that during the term of this Agreement and for a period of [specific timeframe, e.g., 1 year] following the termination of this Agreement, they will not engage in any business or work for any company that competes directly with [Company] within [geographic area, e.g., the United States, specific state or city]. This restriction applies to any work related to [specific industry or sector] or other business activities that could harm the [Company]'s competitive position.
Non-compete clause with restricted industries
This variation applies when the non-compete is limited to specific industries.
The [Employee/Contractor] agrees not to engage in or work for any business that operates in the same industry as [Company], specifically in [describe industry, e.g., software development, healthcare, etc.], for a period of [specific timeframe, e.g., 6 months] following the termination of this Agreement. This restriction applies within the geographic area of [specific location, e.g., within 50 miles of [Company]].
Non-compete clause with exception for investments
This variation allows for investments in competing companies, with restrictions on active roles.
The [Employee/Contractor] agrees that they will not work for, consult for, or otherwise assist any company that competes directly with [Company] for a period of [specific timeframe, e.g., 2 years] following the termination of this Agreement. However, the [Employee/Contractor] may hold an investment in a competing company, provided that their ownership does not exceed [percentage, e.g., 5%] and they do not actively participate in the management of the competing company.
Non-compete clause for executives and senior employees
This variation applies to executives or employees in leadership positions.
The [Executive/Employee] agrees that for a period of [specific timeframe, e.g., 2 years] following the termination of their employment with [Company], they will not engage in or work for any business that competes with [Company] in [specific area, e.g., the technology, financial services] industry within [geographic area, e.g., the United States or within 100 miles of [Company]].
Non-compete clause with geographical limitations
This variation applies when the non-compete is limited to specific geographic areas.
The [Employee/Contractor] agrees that for a period of [specific timeframe, e.g., 1 year] following the termination of this Agreement, they will not engage in any business that competes directly with [Company] within [geographic area, e.g., the state of New York]. This restriction is based on the need to protect the [Company]'s goodwill and confidential information within this specific geographic area.
Non-compete clause with consideration for severance
This variation applies when the non-compete is tied to severance or benefits.
The [Employee/Contractor] agrees that during the term of this Agreement and for [specific timeframe, e.g., 12 months] following termination, they will not compete with [Company] in any business or industry related to [Company]'s business. In return for agreeing to this non-compete, [Company] will provide [Employee/Contractor] with a severance package or other consideration of [specific terms, e.g., salary continuation, bonus, etc.].
Non-compete clause with restricted duration
This variation applies when the duration is intentionally limited.
The [Employee/Contractor] agrees that for a period of [specific timeframe, e.g., 6 months] following the termination of this Agreement, they will not engage in or work for any business that competes directly with [Company] within [geographic area]. After the [specific timeframe], this restriction will no longer apply.
Non-compete clause with additional post-termination restrictions
This variation applies additional restrictions after the non-compete period.
The [Employee/Contractor] agrees that for a period of [specific timeframe, e.g., 12 months] after the termination of this Agreement, they will not compete with [Company]. Additionally, the [Employee/Contractor] shall refrain from soliciting any current employees or customers of [Company] for [specific timeframe, e.g., 1 year] following termination.
Non-compete clause for contractors and freelancers
This variation applies to contractors or freelancers who may have limited interaction with the company.
The [Contractor/Freelancer] agrees that during the term of this Agreement and for a period of [specific timeframe, e.g., 1 year] following the completion of their work with [Company], they will not engage in any business or provide services to any company that competes with [Company] within [geographic area, e.g., the same city or region].
Non-compete clause with clause enforcement
This variation applies to the enforcement of the non-compete clause.
The [Employee/Contractor] acknowledges that any violation of this non-compete clause will cause irreparable harm to [Company]. In the event of such a breach, [Company] shall have the right to seek injunctive relief, as well as monetary damages, to enforce the non-compete and recover any losses incurred due to the violation.
Non-compete clause for employees with access to sensitive information
This variation applies to employees with access to sensitive company information.
The [Employee] agrees that for a period of [specific timeframe, e.g., 18 months] after the termination of their employment, they will not work for or consult with any business that competes with [Company] in [specific industry, e.g., technology, finance]. This restriction is necessary to protect the [Company]'s sensitive and proprietary information that the [Employee] had access to during their employment.
Non-compete clause with carve-out for specific roles
This variation provides a carve-out for employees in certain roles.
The [Employee] agrees that for a period of [specific timeframe, e.g., 12 months] following the termination of this Agreement, they will not engage in any competing business activities. However, this restriction does not apply to roles that are not directly competitive with the business of [Company], as agreed upon by both parties in writing.
Non-compete clause for franchisees
This variation applies to franchisees who may be restricted from opening competing franchises.
The [Franchisee] agrees that for a period of [specific timeframe, e.g., 2 years] following the termination or expiration of this franchise agreement, they will not open, operate, or become involved in a business that competes with [Franchisor] within [specific geographic area, e.g., 50 miles from the franchised location].
Non-compete clause with exception for pre-existing businesses
This variation allows an exception for businesses the employee was involved in prior to employment.
The [Employee] agrees that for [specific timeframe, e.g., 12 months] following the termination of their employment, they will not engage in any competing business. However, this restriction does not apply to businesses the [Employee] was involved with prior to joining [Company], provided such business was not disclosed to [Company] as a conflict of interest.
Non-compete clause with limited client contact
This variation restricts competition related only to clients previously worked with.
The [Employee] agrees that for a period of [specific timeframe, e.g., 6 months] following the termination of their employment, they will not directly engage with any clients or customers of [Company] that the [Employee] worked with during the last [specific timeframe, e.g., 1 year] of employment. This restriction applies within the geographic area of [specific area, e.g., the state of California].
Non-compete clause with focus on proprietary products
This variation applies to competition related to specific products or services.
The [Employee] agrees not to engage in any business that competes with [Company]'s proprietary products or services for a period of [specific timeframe, e.g., 1 year] after the termination of employment. The restriction applies only to products or services the [Employee] worked on directly during their tenure with [Company].
Non-compete clause with limited application to new business ventures
This variation applies the non-compete to new business ventures.
The [Employee] agrees that for a period of [specific timeframe, e.g., 12 months] following the termination of their employment, they will not start, invest in, or become involved in a new business venture that directly competes with [Company] in [specific area of business].
Non-compete clause for employees with business development roles
This variation applies to employees in business development or sales roles.
The [Employee] agrees that for [specific timeframe, e.g., 18 months] following their departure from [Company], they will not solicit or engage with any clients or businesses that they helped develop during their employment, and will not join or work for any competitor in a business development capacity in the same market.
Non-compete clause with optional renewal period
This variation applies to an option to renew the non-compete period.
The parties agree that the non-compete clause will apply for a period of [specific timeframe, e.g., 1 year] after the termination of the Agreement. At the end of this period, the parties may mutually agree to extend the non-compete period for an additional [specific timeframe, e.g., 6 months], subject to renegotiation of terms.
Non-compete clause for employees leaving for a competitor
This variation applies when an employee leaves to work for a direct competitor.
The [Employee] agrees that for a period of [specific timeframe, e.g., 1 year] following the termination of their employment with [Company], they will not work for or consult with any business that competes directly with [Company] in the same geographic area, specifically in [industry or service]. This clause is intended to protect the [Company]'s confidential information and market position.
Non-compete clause with a focus on technological expertise
This variation applies to employees with specialized technical skills.
The [Employee] agrees that for [specific timeframe, e.g., 18 months] after the termination of their employment, they will not engage in any business that develops or utilizes similar technology, software, or intellectual property related to [Company]'s products, within [geographic area]. This restriction applies to prevent the unauthorized use or transfer of technical knowledge acquired during employment.
Non-compete clause for consulting roles
This variation applies to consultants who may be restricted from working with competitors.
The [Consultant] agrees not to provide consulting services to any company that competes with [Company] for [specific timeframe, e.g., 1 year] after the termination of this Agreement. This restriction applies within [geographic area] and only to businesses in the same industry as [Company].
Non-compete clause for independent contractors
This variation applies to independent contractors engaged with the company.
The [Contractor] agrees that for a period of [specific timeframe, e.g., 12 months] following the completion of this Agreement, they will not engage in, assist, or work for any competitor of [Company] within the [specific geographic area, e.g., 100-mile radius]. The non-compete is applicable only to work directly related to the [Company]'s business.
Non-compete clause with reduced duration for senior employees
This variation shortens the duration for senior employees.
The [Senior Employee] agrees that for a period of [specific timeframe, e.g., 6 months] following the termination of their employment, they will not engage in any competitive business activities in the [specific industry] within [geographic area]. This term is shortened due to the seniority of the employee’s role and the level of their involvement with sensitive business operations.
Non-compete clause with provision for breach penalties
This variation includes penalties for breaching the non-compete clause.
The [Employee] agrees that, for a period of [specific timeframe, e.g., 12 months] following termination of their employment, they will not work for or start a business that competes with [Company]. In the event of a breach of this non-compete clause, the [Employee] agrees to pay [Company] liquidated damages of [specific amount], in addition to any actual damages caused by the breach.
Non-compete clause for multi-state operations
This variation applies when a company operates in multiple states.
The [Employee] agrees that for [specific timeframe, e.g., 1 year] after the termination of their employment, they will not engage in business activities that directly compete with [Company] in any state where [Company] operates. This restriction applies to the states of [list states or regions].
Non-compete clause for key employees with specific responsibilities
This variation applies to key employees who hold unique or sensitive positions.
The [Employee], as a key member of [Company]'s leadership team, agrees that for [specific timeframe, e.g., 18 months] following the termination of their employment, they will not engage in or accept employment with any competitor in the [specific industry]. This restriction applies to all roles similar to the employee’s prior position with [Company] in [geographic area].
Non-compete clause for employees with customer-facing roles
This variation applies to employees who interact directly with customers.
The [Employee] agrees that for [specific timeframe, e.g., 12 months] after the termination of their employment with [Company], they will not solicit, engage, or work for any business that competes with [Company] in [specific geographic area], especially targeting the customer base with whom the [Employee] had direct contact during their tenure with [Company].
Non-compete clause with broader industry restrictions
This variation applies to a broader range of industries to prevent competition.
The [Employee] agrees that for [specific timeframe, e.g., 2 years] after the termination of their employment with [Company], they will not engage in any business, whether directly or indirectly, that competes with any aspect of [Company]'s business, in [specific industry]. This restriction covers any competitive activities within the defined geographic area of [specific location].
Non-compete clause for employees transitioning to a competitor
This variation applies to employees leaving for a competing company.
The [Employee] agrees that for a period of [specific timeframe, e.g., 12 months] following the termination of their employment, they will not engage in any business activities that compete directly with [Company] in the same industry and geographic area. This restriction is intended to prevent the employee from using confidential information gained during their employment to the detriment of [Company].
Non-compete clause for employees in critical operational roles
This variation applies to employees in critical operational or strategic roles.
The [Employee] agrees that for a period of [specific timeframe, e.g., 18 months] after their departure from [Company], they will not engage in any business or employment in the [specific industry] within [specific geographic area]. This restriction is to protect the unique knowledge, trade secrets, and operational strategies acquired during the course of their employment.
Non-compete clause for contractors in competitive industries
This variation applies to contractors who may engage in competitive business practices.
The [Contractor] agrees that for [specific timeframe, e.g., 1 year] after the completion of their work with [Company], they will not provide services or assist any competitor in [specific industry] within [geographic area]. This provision is to ensure that the [Contractor] does not use proprietary information learned during the contract to benefit a competing business.
Non-compete clause for sales representatives
This variation applies to sales personnel who have direct contact with customers.
The [Sales Representative] agrees that for a period of [specific timeframe, e.g., 1 year] after the termination of their employment, they will not solicit or work for any business that directly competes with [Company] in [geographic area], particularly targeting customers or markets they had direct contact with while employed.
Non-compete clause with a geographical exception
This variation allows for limited competition in specific areas.
The [Employee] agrees that for [specific timeframe, e.g., 6 months] after their employment with [Company] ends, they will not engage in any business that competes directly with [Company] within [specific geographic area, e.g., within 50 miles of the business’s primary location]. However, they may engage in such business activities outside this defined area.
Non-compete clause for key executives
This variation applies to high-level executives.
The [Executive] agrees that for a period of [specific timeframe, e.g., 2 years] following the termination of their employment, they will not engage in, assist, or consult for any company that competes with [Company] in [industry] within [specific geographic area]. The [Executive] acknowledges that their position within [Company] involves access to strategic, confidential information.
Non-compete clause with specific business segments
This variation applies to non-compete restrictions in specific business segments.
The [Employee] agrees that for [specific timeframe, e.g., 12 months] after the termination of their employment, they will not work for or assist in the development of any business that competes with [Company] in the specific segment of [business segment, e.g., cloud computing] within [specific geographic area]. This provision ensures that [Company] maintains its competitive edge in this sector.
Non-compete clause for non-disclosure of business relationships
This variation applies to the protection of business relationships after employment ends.
The [Employee] agrees that for [specific timeframe, e.g., 6 months] after leaving [Company], they will not solicit or engage with any of [Company]'s clients, vendors, or business partners that they interacted with during their employment. This restriction is in place to protect the relationships that were developed while working at [Company].
Non-compete clause for freelance professionals
This variation applies to freelance professionals who may work for competitors.
The [Freelancer] agrees that for [specific timeframe, e.g., 1 year] after the completion of their contract with [Company], they will not provide freelance services to any business in the same industry that competes directly with [Company] within [specific geographic area, e.g., city or region]. This provision is to prevent the freelancer from utilizing proprietary knowledge to benefit a competitor.
Non-compete clause for former employees starting a competing business
This variation applies to employees who start their own competing business.
The [Employee] agrees that for a period of [specific timeframe, e.g., 12 months] after the termination of their employment, they will not start or operate a business that competes directly with [Company] in [specific industry or sector]. This restriction is designed to protect [Company] from losing competitive advantage to a former employee who has inside knowledge of its operations.
Non-compete clause for former partners in business
This variation applies to former business partners.
The [Partner] agrees that for a period of [specific timeframe, e.g., 1 year] following the termination of this Agreement, they will not engage in or assist any business that competes directly with [Company] in [industry] within [specific geographic area]. This clause is designed to protect the goodwill and business relationships established during the partnership.
Non-compete clause with confidentiality agreement
This variation ties the non-compete to a confidentiality agreement.
The [Employee] agrees that for [specific timeframe, e.g., 18 months] after the termination of their employment, they will not engage in any business that competes with [Company] in [specific industry or market]. This non-compete is conditioned upon the continued confidentiality of the information provided to the [Employee] during the term of employment, as outlined in the confidentiality agreement.
Non-compete clause for technical staff
This variation applies to technical staff with specialized knowledge.
The [Employee], having worked in a technical capacity at [Company], agrees that for a period of [specific timeframe, e.g., 1 year] following the termination of their employment, they will not engage in or assist any business in developing or providing similar [products, services] related to [Company]'s technological offerings within [specific geographic area].
Non-compete clause with restrictions on hiring former employees
This variation extends the non-compete to hiring former employees.
The [Employee] agrees that for a period of [specific timeframe, e.g., 1 year] after termination, they will not solicit, hire, or attempt to hire any of [Company]'s employees or contractors who were involved in any way with [Company]'s [specific business area]. This provision aims to prevent the loss of valuable talent from [Company] to a direct competitor.
Non-compete clause for businesses in the same supply chain
This variation applies to businesses operating in the same supply chain.
The [Employee] agrees not to engage in, or assist with, any business that competes with [Company] in any part of the supply chain or distribution network for [specific product or service], for [specific timeframe, e.g., 1 year] following the termination of their employment. This includes working for or investing in businesses that operate within the same supply chain as [Company].
Non-compete clause for employees in customer service roles
This variation applies to employees in customer-facing roles.
The [Employee] agrees that for a period of [specific timeframe, e.g., 6 months] following the termination of their employment with [Company], they will not provide customer service, sales, or support to any competitor of [Company] that operates in the same [industry or region]. This restriction ensures the protection of [Company]'s customer relationships.
Non-compete clause for service-based businesses
This variation applies to employees in service-based industries.
The [Employee] agrees that for [specific timeframe, e.g., 12 months] following the termination of their employment, they will not engage in providing services that directly compete with [Company] in the service sector, including but not limited to [specific services offered by Company], within [geographic area].
Non-compete clause with right to review after specified period
This variation applies when the non-compete clause is subject to a review after a set period.
The [Employee] agrees that for [specific timeframe, e.g., 1 year] following termination, they will not engage in any competing business. After [specific timeframe, e.g., 6 months], the parties agree to review the necessity of continuing this restriction, taking into account changes in the market or [Company]'s position.
Non-compete clause for employees transitioning to a new role
This variation applies when the employee is transitioning to a new job.
The [Employee] agrees that for [specific timeframe, e.g., 6 months] following the termination of their employment, they will not work in any capacity for a competitor of [Company] in [specific market, e.g., the marketing, sales, or technology sector] within [geographic area]. This restriction allows the [Employee] to transition without engaging in direct competition.
Non-compete clause with carve-out for consulting work
This variation provides an exception for consulting work.
The [Employee] agrees not to work for, consult with, or provide services to any business that competes with [Company] for [specific timeframe, e.g., 1 year] following termination of their employment. However, the [Employee] may engage in consulting work for businesses outside [Company]'s competitive range, subject to prior written approval from [Company].
Non-compete clause for employees in creative roles
This variation applies to employees in creative positions.
The [Employee] agrees that for [specific timeframe, e.g., 12 months] after the termination of their employment, they will not work for or create content for any business in the same industry that competes directly with [Company], specifically in [creative field, e.g., marketing, design, etc.], within [specific geographic area].
Non-compete clause with modification option after review
This variation allows modification of the non-compete clause after a review.
The [Employee] agrees not to work for any competitor of [Company] for a period of [specific timeframe, e.g., 1 year] after termination of employment. After [specific timeframe, e.g., 6 months], the non-compete clause may be reviewed by both parties to assess its necessity based on changes in the industry, market conditions, and [Company]'s competitive position.
Non-compete clause with exception for related business areas
This variation provides an exception for related but not directly competing businesses.
The [Employee] agrees that for [specific timeframe, e.g., 12 months] after leaving [Company], they will not engage in any business that competes directly with [Company] in [specific industry]. However, this restriction does not apply to businesses that are related but do not directly compete with the [Company]'s primary offerings, such as [specific examples].
Non-compete clause with geographical adjustment based on market size
This variation adjusts the geographic scope of the non-compete based on market conditions.
The [Employee] agrees that for [specific timeframe, e.g., 12 months] after termination of employment, they will not work for any competitor of [Company] within [geographic area, e.g., the United States, specific city, etc.]. The scope of this geographic area may be reduced or adjusted based on the market size and competition within the [specific industry].
Non-compete clause for remote employees
This variation applies to remote workers.
The [Employee], working remotely for [Company], agrees that for [specific timeframe, e.g., 12 months] after termination of their employment, they will not engage in any business that competes directly with [Company] within [specific geographic area, e.g., the United States]. This restriction applies regardless of the [Employee]'s location and ensures that [Company]'s intellectual property and market position are protected.
Non-compete clause for contract-based work
This variation applies to contractors working with the company.
The [Contractor] agrees that for [specific timeframe, e.g., 12 months] after the completion of their contract with [Company], they will not work with or provide services to any competitor of [Company] within [specific geographic area, e.g., the technology sector]. This restriction ensures that any proprietary knowledge gained during the contract period is not used to the detriment of [Company].
Non-compete clause with a specific industry focus
This variation applies to a non-compete focused on a particular sector or industry.
The [Employee] agrees that for [specific timeframe, e.g., 12 months] after leaving [Company], they will not work in or assist any company that operates within the [specific industry, e.g., tech, manufacturing] sector in the same geographic area. This provision is designed to protect [Company] from competition in its core market areas.
Non-compete clause for individuals holding equity in a competing company
This variation restricts individuals from holding equity in competing businesses.
The [Employee] agrees that for a period of [specific timeframe, e.g., 1 year] following the termination of their employment with [Company], they will not hold any equity or ownership in any company that competes directly with [Company] in [specific industry or market] within [specific geographic area].
Non-compete clause with clear exception for passive investments
This variation allows passive investments but restricts active participation.
The [Employee] agrees not to participate in any competing business for a period of [specific timeframe, e.g., 18 months] after the termination of their employment. However, the [Employee] may hold passive investments (not exceeding [specific percentage, e.g., 5%]) in competing companies, provided that they do not actively participate in the management or decision-making of the business.
Non-compete clause with specific client restrictions
This variation restricts employees from working with specific clients.
The [Employee] agrees that for [specific timeframe, e.g., 12 months] after leaving [Company], they will not solicit, work with, or provide services to any client or customer of [Company] with whom they had direct interaction during their employment. This restriction ensures that [Company]'s client relationships remain secure.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.