[DRAFT] EMPLOYEE NON-COMPETE AGREEMENT
(Virginia – Comprehensive Template)
[// GUIDANCE: Carefully review and tailor all bracketed, bold-capitalized placeholders before release to client. Remove GUIDANCE comments in final execution version.]
TABLE OF CONTENTS
- Document Header
- Definitions
- Operative Provisions
- Representations & Warranties
- Covenants & Restrictions
- Default & Remedies
- Risk Allocation
- Dispute Resolution
- General Provisions
- Execution Block
1. DOCUMENT HEADER
EMPLOYEE NON-COMPETE AGREEMENT (this “Agreement”) is entered into as of [EFFECTIVE DATE] (the “Effective Date”), by and between [COMPANY LEGAL NAME], a [STATE OF ORGANIZATION] [ENTITY TYPE] having its principal place of business at [COMPANY ADDRESS] (“Company”), and [EMPLOYEE LEGAL NAME], an individual residing at [EMPLOYEE ADDRESS] (“Employee”). Company and Employee are sometimes referred to herein individually as a “Party” and collectively as the “Parties.”
1.1 Recitals
A. Company provides [DESCRIPTION OF PRODUCTS/SERVICES] and has invested substantial resources in developing Confidential Information (defined below) and goodwill.
B. Employee will receive or has received specialized training, access to Company’s Confidential Information, and the opportunity to develop relationships with Company’s customers and employees.
C. Employee’s [initial employment/continued employment/promotion], and the compensation and benefits provided in connection therewith, constitute sufficient consideration for the covenants set forth herein.
D. The Parties desire to protect Company’s legitimate business interests in accordance with Virginia law, including Va. Code Ann. § 40.1-28.7:8, and therefore agree as follows:
NOW, THEREFORE, in consideration of the mutual covenants herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
2. DEFINITIONS
For purposes of this Agreement, capitalized terms shall have the meanings set forth below:
“Affiliate” means any entity that, directly or indirectly, controls, is controlled by, or is under common control with a Party.
“Confidential Information” means information (whether written, oral, electronic, or otherwise) relating to Company or its Affiliates that is not generally known to the public and that gives Company a competitive advantage, including, without limitation, customer lists, pricing, marketing strategies, business plans, trade secrets as defined under the Virginia Uniform Trade Secrets Act, financial data, software, inventions, research, and personnel information.
“Competitive Business” means any business or activity that, directly or indirectly, engages in [SPECIFIC BUSINESS DESCRIPTION] or any other business that competes with the products or services offered by Company during the last twelve (12) months of Employee’s employment.
“Customer” means any Person who purchased, licensed, or received products or services from Company within the twenty-four (24) months preceding the Termination Date.
“Person” means any individual, corporation, partnership, limited liability company, trust, association, governmental authority, or other entity.
“Restricted Period” means the period commencing on the Termination Date and ending [NUMBER] months thereafter; provided, that such period shall not exceed a maximum of twelve (12) months unless otherwise permitted under applicable law.
“Restricted Territory” means [DESCRIBE GEOGRAPHIC AREA – e.g., “the Commonwealth of Virginia and any other state in which Company conducted material business during the twelve (12) months preceding the Termination Date”]. The Restricted Territory shall be limited to areas where Employee performed services or had a material presence or influence on behalf of Company.
“Termination Date” means the last day of Employee’s employment with Company for any reason.
3. OPERATIVE PROVISIONS
3.1 Employment Status
Employee acknowledges that:
(a) Employment with Company is [at will/until DATE or EVENT]; and
(b) Nothing herein shall be construed as a guarantee of continued employment.
3.2 Consideration
Employee acknowledges and agrees that Employee is NOT a “low-wage employee” as defined under Va. Code Ann. § 40.1-28.7:8 and that the following constitute adequate consideration for this Agreement:
1. [INITIAL EMPLOYMENT OFFER / PROMOTION / RAISE / BONUS], and
2. Continued access to Confidential Information and Company goodwill.
[// GUIDANCE: If Employee is already employed, describe concrete, contemporaneous consideration such as a promotion or additional compensation.]
3.3 Acknowledgment of Legitimate Interests
Employee acknowledges that the restrictions contained herein are reasonable and necessary to protect Company’s legitimate business interests, including its Confidential Information, customer goodwill, and investment in employee training.
4. REPRESENTATIONS & WARRANTIES
4.1 Mutual Authority. Each Party represents that it has full power and authority to enter into and perform this Agreement.
4.2 Non-Contravention. Employee represents that execution of this Agreement does not violate any existing contractual or legal obligation to any third party.
4.3 Compliance with Law. Each Party warrants that it shall comply with all applicable federal, state, and local laws in connection with its performance of this Agreement.
4.4 Survival. The representations and warranties in this Section shall survive termination of this Agreement to the extent necessary to enforce the covenants herein.
5. COVENANTS & RESTRICTIONS
5.1 Non-Competition
During employment and throughout the Restricted Period, Employee shall not, within the Restricted Territory, directly or indirectly (whether as owner, partner, shareholder, employee, consultant, or otherwise), engage in or assist any Competitive Business; provided, however, that passive ownership of less than two percent (2%) of a class of securities of a publicly traded company shall not, by itself, constitute a breach of this Section.
5.2 Non-Solicitation of Customers
Employee shall not, during employment and the Restricted Period, solicit or attempt to solicit any Customer for the purpose of providing products or services that are competitive with those provided by Company.
5.3 Non-Solicitation of Employees
Employee shall not, during employment and for twelve (12) months thereafter, recruit, induce, or encourage any employee or independent contractor of Company to terminate or alter his, her, or its relationship with Company.
5.4 Confidentiality
Employee agrees to hold all Confidential Information in trust and confidence and not to disclose, use, or permit its disclosure or use except as may be necessary in the ordinary course of performing Employee’s duties for Company.
5.5 Return of Property
Upon the earlier of Company’s request or the Termination Date, Employee shall promptly return all Company property, including documents and electronic files containing Confidential Information.
6. DEFAULT & REMEDIES
6.1 Events of Default
A “Default” occurs if Employee breaches or threatens to breach any covenant in Section 5.
6.2 Notice; Opportunity to Cure
Company shall provide written notice of any alleged Default. If curable, Employee shall have five (5) business days to cure the breach. No cure period applies to breaches that by their nature are incapable of cure (including disclosure of trade secrets).
6.3 Injunctive Relief
Employee acknowledges that monetary damages alone would be an inadequate remedy for any Default. Accordingly, Company shall be entitled to immediate injunctive relief (temporary, preliminary, and/or permanent) in any court of competent jurisdiction, in addition to all other remedies available at law or in equity, without the necessity of posting bond or proving actual damages.
6.4 Damages; Accounting
Company may recover actual, consequential, and incidental damages, and may require Employee to disgorge any profits realized from activities constituting a breach.
6.5 Attorneys’ Fees
In any action to enforce this Agreement, the prevailing Party shall be entitled to recover its reasonable attorneys’ fees, costs, and expenses.
7. RISK ALLOCATION
7.1 Indemnification by Employee
Employee shall indemnify, defend, and hold harmless Company and its Affiliates, and their respective officers, directors, employees, and agents, from and against any and all claims, liabilities, damages, losses, costs, and expenses (including reasonable attorneys’ fees) arising out of or relating to Employee’s breach of this Agreement.
7.2 No Liability Cap
The Parties agree that no contractual limitation of liability shall apply to Employee’s obligations under this Agreement.
7.3 Insurance
[OPTIONAL – COMPANY REQUIREMENT] Employee shall maintain, at Employee’s sole cost, appropriate professional or other insurance coverage naming Company as an additional insured, in minimum coverage amounts of [$AMOUNT].
7.4 Force Majeure
Neither Party shall be liable for failure to perform any obligation (other than payment or restrictive covenants) if such failure results from causes beyond the Party’s reasonable control, including acts of God, war, epidemic, or governmental action; provided, that the affected Party gives prompt notice and uses commercially reasonable efforts to resume performance.
8. DISPUTE RESOLUTION
8.1 Governing Law
This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Virginia, without regard to its conflict-of-laws principles.
8.2 Forum Selection
The state courts located in [COUNTY/CITY], Virginia shall have exclusive jurisdiction over any action arising out of or relating to this Agreement, except as provided in Section 8.3.
8.3 Arbitration (Optional)
[OPTIONAL – STRIKE IF NOT USED] Any controversy or claim arising out of or relating to Sections 5 or 6 of this Agreement shall, at Company’s sole election, be settled by binding arbitration administered by [ARBITRATION ADMINISTRATOR] under its commercial rules, with the arbitral seat in [CITY], Virginia. Judgment on the award may be entered in any court of competent jurisdiction. This provision shall not preclude either Party from seeking provisional injunctive relief in court pursuant to Section 6.3.
8.4 Jury Trial Waiver (Optional)
[OPTIONAL – STRIKE IF NOT USED] EACH PARTY IRREVOCABLY WAIVES ANY RIGHT TO A JURY TRIAL IN ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT.
8.5 Equitable Relief Preservation
Nothing in this Section shall limit Company’s right to seek injunctive or other equitable relief under Section 6.3.
9. GENERAL PROVISIONS
9.1 Amendment and Waiver. No amendment or waiver of any provision of this Agreement shall be effective unless in writing and signed by both Parties.
9.2 Assignment. This Agreement is personal to Employee and may not be assigned by Employee. Company may assign this Agreement to any Affiliate or successor in interest.
9.3 Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the Parties and their respective heirs, executors, administrators, successors, and permitted assigns.
9.4 Severability; Reformation. If any provision of this Agreement is held unenforceable, such provision shall be reformed to the minimum extent necessary to render it enforceable, and the remaining provisions shall remain in full force and effect.
9.5 Entire Agreement. This Agreement constitutes the entire understanding between the Parties with respect to the subject matter hereof and supersedes all prior or contemporaneous agreements, whether oral or written.
9.6 Counterparts; Electronic Signature. This Agreement may be executed in counterparts (including by electronic signature and PDF exchange), each of which shall be deemed an original and all of which together shall constitute one and the same instrument.
9.7 Headings. Section headings are for convenience only and shall not affect interpretation.
9.8 Notices. All notices shall be in writing and delivered to the addresses first set forth above (or such other address as a Party may designate) by personal delivery, certified mail (return receipt requested), or nationally recognized overnight courier, and shall be deemed given upon receipt.
10. EXECUTION BLOCK
IN WITNESS WHEREOF, the Parties have executed this Employee Non-Compete Agreement as of the Effective Date.
| COMPANY | EMPLOYEE |
|---|---|
| [COMPANY LEGAL NAME] | [EMPLOYEE LEGAL NAME] |
| By: ______ | ______ |
| Name: [PRINTED NAME] | |
| Title: [TITLE] | |
| Date: ____ | Date: _______ |
[// GUIDANCE: Determine whether notarization or witness signatures are required under Company policy or specific transaction circumstances. Virginia law generally does not mandate notarization for non-compete agreements, but it may enhance evidentiary value.]
[// GUIDANCE: After customization, have local Virginia counsel confirm compliance with any newly enacted statutory amendments or judicial interpretations affecting non-compete enforceability, including evolving compensation thresholds under Va. Code Ann. § 40.1-28.7:8.]