EMPLOYEE NON-COMPETE AGREEMENT
(State of Utah)
[// GUIDANCE: This template is drafted to comply with Utah’s Post-Employment Restrictions Act, Utah Code Ann. § 34-51-101 et seq. Utah generally limits employee non-compete covenants to 12 months post-employment and requires “additional consideration” for incumbent employees. Customize all bracketed terms and verify factual inputs.]
TABLE OF CONTENTS
- Document Header
- Definitions
- Operative Provisions
3.1 Consideration
3.2 Covenant Not to Compete
3.3 Non-Solicitation Covenant (Optional)
3.4 Confidential Information - Representations & Warranties
- Covenants & Restrictions
- Default & Remedies
- Risk Allocation
- Dispute Resolution
- General Provisions
- Execution Block
1. DOCUMENT HEADER
This Employee Non-Compete Agreement (this “Agreement”) is entered into as of [EFFECTIVE DATE] (the “Effective Date”) by and between:
• [EMPLOYER LEGAL NAME], a [STATE OF FORMATION] [ENTITY TYPE] with its principal place of business at [ADDRESS] (“Employer”); and
• [EMPLOYEE LEGAL NAME], an individual residing at [ADDRESS] (“Employee”).
Employer and Employee are sometimes referred to herein individually as a “Party” and collectively as the “Parties.”
Recitals
A. Employer is engaged in the business of [DESCRIBE BUSINESS].
B. Employee will receive access to Employer’s Confidential Information (as defined below) and valuable relationships.
C. Employer desires to protect its legitimate business interests, and Employee desires to accept reasonable post-employment restrictions on competitive activities, subject to Utah law and the terms set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants herein and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the Parties agree as follows:
2. DEFINITIONS
For purposes of this Agreement, the following terms have the meanings set forth below. Capitalized terms used but not defined shall have the meanings attributed to them in context.
“Affiliate” – any entity that directly or indirectly controls, is controlled by, or is under common control with Employer.
“Cause” – [DEFINE “Cause” OR CROSS-REFERENCE TO EMPLOYMENT AGREEMENT].
“Confidential Information” – information (whether oral, written, electronic, or otherwise) relating to Employer’s business that is not generally known to the public, including trade secrets, customer lists, pricing, financial data, marketing plans, product designs, and other proprietary information.
“Restricted Activities” – (a) owning, managing, operating, joining, controlling, or participating in the ownership, management, operation, or control of; (b) being employed by or providing services to; or (c) assisting (financially or otherwise) any Competitive Business.
“Competitive Business” – any business that competes, directly or indirectly, with Employer in the Territory with respect to [SPECIFY PRODUCTS/SERVICES].
“Restricted Period” – the period beginning on the Separation Date and ending on the earlier of (a) twelve (12) months thereafter or (b) any shorter period required by applicable law. [// GUIDANCE: Utah Code Ann. § 34-51-201(1) caps non-competes at 12 months.]
“Separation Date” – the date Employee’s employment with Employer terminates for any reason.
“Territory” – [DEFINE GEOGRAPHIC SCOPE—e.g., “within a fifty (50) mile radius of any location in which Employer maintained an office or generated at least 5% of its gross revenue during the 12-month period preceding the Separation Date”]. [// GUIDANCE: Under Utah law, geographic scope must be no broader than necessary to protect legitimate business interests.]
3. OPERATIVE PROVISIONS
3.1 Consideration
(a) New Hires. For an Employee hired contemporaneously with this Agreement, the offer of employment, access to Confidential Information, and eligibility to participate in Employer’s bonus and benefit plans constitute adequate consideration.
(b) Existing Employees. If Employee is currently employed, Employee acknowledges receipt of additional consideration consisting of [SPECIFY — e.g., “a retention bonus of $_, a promotion to _, and enhanced equity eligibility”], the sufficiency of which is hereby acknowledged.
[// GUIDANCE: Utah requires “new consideration” (beyond continued employment) for incumbent employees.]
3.2 Covenant Not to Compete
Employee shall not, during the Restricted Period, engage in any Restricted Activities within the Territory on behalf of a Competitive Business. The Parties acknowledge that (i) the Restricted Period does not exceed twelve (12) months post-employment, (ii) the Territory is reasonable and proportionate to protect Employer’s legitimate interests, and (iii) the scope of Restricted Activities is narrowly tailored.
3.3 Non-Solicitation Covenant (Optional)
[OPTIONAL CLAUSE — delete if not desired] Employee shall not, during the Restricted Period, directly or indirectly solicit or induce (a) any customer, supplier, or business partner to cease doing business with Employer or (b) any employee or independent contractor to terminate or alter his or her relationship with Employer.
3.4 Confidential Information
Employee agrees to hold all Confidential Information in strict confidence and to use such information solely for Employer’s benefit. The obligations in this Section 3.4 are independent of and survive any termination of the non-compete covenant.
4. REPRESENTATIONS & WARRANTIES
4.1 Mutual Authority. Each Party warrants that it has full power and authority to execute and perform this Agreement.
4.2 Employee’s Representations. Employee represents that:
(a) Employee is not a party to any agreement that conflicts with the obligations hereunder;
(b) Employee has had an opportunity to consult independent counsel regarding this Agreement; and
(c) Employee’s performance hereunder will not infringe any third-party rights.
4.3 Survival. The representations and warranties in this Article 4 survive execution and, where context requires, the termination of this Agreement.
5. COVENANTS & RESTRICTIONS
5.1 Notice of Employment. During the Restricted Period, Employee shall provide Employer with written notice within five (5) business days after accepting employment or engagement with any entity that could reasonably be considered a Competitive Business, identifying the entity and describing Employee’s role.
5.2 Tolling. If Employee breaches Section 3.2 or 3.3, the Restricted Period shall be tolled during the period of breach and resume upon cessation of the breach, not to exceed the maximum duration permitted by law.
5.3 Blue-Pencil/Reformation. If any provision is deemed overbroad or unenforceable, a court of competent jurisdiction may reform such provision to the maximum extent permissible to render it valid and enforceable consistent with Utah Code Ann. § 34-51-201(3).
6. DEFAULT & REMEDIES
6.1 Events of Default. Any breach of Articles 3, 4, or 5 constitutes a material default.
6.2 Notice and Cure. Upon discovery of an alleged breach, Employer shall provide written notice to Employee. Where the breach is curable, Employee has five (5) calendar days to cure. Breaches involving disclosure of trade secrets or competing employment are deemed incurable.
6.3 Injunctive Relief. Employee agrees that monetary damages would be inadequate and irrevocably consents to temporary, preliminary, and permanent injunctive relief in any court of competent jurisdiction, without the necessity of posting bond, to prevent or remedy any breach.
6.4 Cumulative Remedies. Injunctive relief is in addition to, not in lieu of, any other rights or remedies, including damages, disgorgement of compensation, and equitable accounting.
6.5 Attorneys’ Fees. Pursuant to Utah Code Ann. § 34-51-301, if a court finds this Agreement unenforceable in whole or in part, Employer shall pay Employee’s reasonable attorneys’ fees and court costs. Otherwise, the prevailing Party in any enforcement action is entitled to recover reasonable attorneys’ fees and costs.
7. RISK ALLOCATION
7.1 Indemnification by Employee. Employee shall indemnify, defend, and hold Employer and its Affiliates harmless from and against any losses, liabilities, damages, costs, and expenses (including reasonable attorneys’ fees) arising out of or relating to Employee’s breach of this Agreement.
7.2 Limitation of Liability. No liability cap applies to Employee’s breach of Articles 3, 4, or 5.
7.3 Insurance. [OPTIONAL — insert if Employee is required to maintain professional liability insurance.]
7.4 Force Majeure. Neither Party is liable for failure or delay in performance (other than payment or non-compete obligations) due to causes beyond its reasonable control, including natural disasters, acts of God, or governmental actions.
8. DISPUTE RESOLUTION
8.1 Governing Law. This Agreement is governed by and construed in accordance with the laws of the State of Utah, without regard to its conflict-of-laws principles.
8.2 Forum Selection. The state courts located in [COUNTY], Utah have exclusive jurisdiction over any proceeding arising out of this Agreement, subject to Section 8.3. Each Party irrevocably submits to and waives objections to such jurisdiction and venue.
8.3 Arbitration (Optional). [ALTERNATE CLAUSE — delete if not elected] Any dispute not resolved informally shall be submitted to binding arbitration before a single arbitrator under the Commercial Arbitration Rules of the American Arbitration Association. Judgment on the award may be entered in any court of competent jurisdiction.
8.4 Jury Trial Waiver (Optional). [OPTIONAL CLAUSE] EACH PARTY HEREBY WAIVES ITS RIGHT TO A TRIAL BY JURY IN ANY ACTION ARISING OUT OF THIS AGREEMENT.
8.5 Preservation of Injunctive Relief. Notwithstanding Section 8.3, Employer may seek provisional injunctive relief in a court of competent jurisdiction to enforce Articles 3, 4, or 5.
9. GENERAL PROVISIONS
9.1 Amendment; Waiver. No amendment or waiver is effective unless in writing and signed by the Parties. A waiver on one occasion is not a waiver on any subsequent occasion.
9.2 Assignment; Delegation. Employee may not assign any rights or delegate any duties under this Agreement without Employer’s prior written consent. Employer may assign this Agreement to any successor or Affiliate.
9.3 Successors and Assigns. This Agreement is binding upon and inures to the benefit of the Parties and their respective heirs, personal representatives, successors, and permitted assigns.
9.4 Severability. If any provision is held invalid, such invalidity does not affect other provisions; the Agreement shall be construed as if the invalid provision were omitted or reformed to the extent necessary for enforceability.
9.5 Integration. This Agreement, together with [LIST OTHER RELEVANT AGREEMENTS], constitutes the entire agreement between the Parties regarding the subject matter and supersedes all prior understandings.
9.6 Counterparts; Electronic Signatures. This Agreement may be executed in counterparts (including by electronic signature or PDF), each of which is deemed an original and together constitute one instrument.
10. EXECUTION BLOCK
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date.
[EMPLOYER LEGAL NAME]
By: ____
Name: ____
Title: _____
Date: _________
[EMPLOYEE LEGAL NAME]
Signature: ____
Date: ________
[// GUIDANCE: Utah does not require notarization of non-compete agreements, but notarization may aid evidentiary authenticity. Include a notary acknowledgment if desired.]
END OF DOCUMENT