Define Non-Compete Clause Agreement

A non-compete clause agreement (NCCA) is a legal document that outlines the terms and conditions under which an employee agrees not to compete with their employer for a certain period after leaving the job.

This type of agreement is often used to protect the employer`s interests and assets, and to prevent their employees from sharing confidential information with competitors or starting a similar business in the same industry.

A non-compete clause agreement typically includes the following information:

1. The duration of the non-compete clause: This specifies the length of time that the employee must wait before they can compete with the employer.

2. The geographic scope of the non-compete clause: This outlines the geographical area where the employee agrees not to compete with the employer.

3. The specific activities covered by the non-compete clause: This defines the types of activities that the employee agrees not to engage in.

4. Indemnification clause: This clause will protect the employer against any legal action taken against the employee by a third-party due to the employee engaging in activities that go against the non-compete clause.

5. Consideration: In return for the employee agreeing to the non-compete agreement, there must be some form of consideration given to them. This may include a severance package, additional compensation, or other benefits.

It is essential for an NCCA to be reasonable in scope and duration to be enforceable. Courts may strike down an NCCA if it is too restrictive or imposes an undue hardship on the employee.

In summary, an NCCA is a useful tool for employers to protect their business interests and assets. However, it is important to ensure that the agreement is reasonable and fair to both parties to avoid any legal challenges in the future.