EMPLOYEE NON-COMPETE AGREEMENT
(Vermont – Comprehensive Template)
[// GUIDANCE: Drafted for use with Vermont employees. Carefully review all bracketed language and state-specific notes before finalizing. Non-competes are scrutinized closely in Vermont; tailor the Restricted Period, Restricted Territory, and Scope of Restricted Activities to the narrowest protection necessary to safeguard the Employer’s legitimate business interests.]
TABLE OF CONTENTS
- Document Header
- Definitions
- Consideration & Acknowledgements
- Covenant Not to Compete
- Confidentiality & Proprietary Rights
- Non-Solicitation & Non-Interference
- Representations & Warranties
- Remedies; Injunctive Relief
- Indemnification; No Liability Cap
- Dispute Resolution
- General Provisions
- Execution Block
1. DOCUMENT HEADER
This EMPLOYEE NON-COMPETE AGREEMENT (“Agreement”) is entered into as of [EFFECTIVE DATE] (the “Effective Date”), by and between [EMPLOYER LEGAL NAME], a [STATE OF ORGANIZATION] [ENTITY TYPE] with its principal place of business at [ADDRESS] (“Employer”), and [EMPLOYEE FULL LEGAL NAME], residing at [ADDRESS] (“Employee,” and together with Employer, the “Parties,” and each a “Party”).
WHEREAS, Employer is engaged in the business of [BRIEF BUSINESS DESCRIPTION] (the “Business”);
WHEREAS, Employer desires to employ (or continue to employ) Employee in the position of [TITLE/POSITION], giving Employee access to Employer’s Confidential Information and goodwill; and
WHEREAS, Employer requires, and Employee is willing to provide, reasonable post-employment covenants under the terms and conditions set forth herein as a condition of [initial employment / continued employment / compensation set forth herein].
NOW, THEREFORE, in consideration of the mutual promises and covenants herein and for 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, the following capitalized terms have the meanings set forth below. All definitions apply equally to singular and plural forms and to any gender.
2.1 “Affiliate” means, with respect to any person or entity, any other person or entity that directly or indirectly controls, is controlled by, or is under common control with such person or entity.
2.2 “Competing Business” means any person or entity that, during the Restricted Period, directly or indirectly engages in [SPECIFIC LINES OF BUSINESS OR SERVICES] that are identical or substantially similar to the Business in the Restricted Territory.
2.3 “Confidential Information” has the meaning assigned in Section 5.1.
2.4 “Restricted Period” means the period commencing on the Effective Date and ending [NUMBER ≤ 2] years after the Termination Date.
2.5 “Restricted Territory” means [DESCRIBE – e.g., “the State of Vermont and any other state in which Employer conducts the Business and in which Employee had material business contact on Employer’s behalf during the one-year period preceding the Termination Date.”]
2.6 “Termination Date” means the date on which Employee’s employment with Employer terminates for any reason.
[// GUIDANCE: Vermont courts weigh duration, geography, and scope together for reasonableness. A period greater than two (2) years or a territory broader than the area actually served by Employee is unlikely to be enforced.]
3. CONSIDERATION & ACKNOWLEDGEMENTS
3.1 Adequate Consideration. Employee acknowledges that (a) contemporaneously with the execution of this Agreement, Employee is [entering into employment / receiving a promotion / receiving the consideration identified in Section 3.2], which constitutes adequate and mutually agreed consideration under Vermont law; and (b) such consideration is in addition to anything of value to which Employee is already entitled.
3.2 Additional Consideration. In further consideration of Employee’s covenants herein, Employer shall provide Employee with [e.g., a signing bonus of $____; access to specialized training; equity incentives].
3.3 Voluntary Execution; Opportunity to Consult Counsel. Employee affirms that Employee has read this Agreement carefully, understands its terms, and has had adequate opportunity to consult with independent legal counsel before signing.
4. COVENANT NOT TO COMPETE
4.1 Non-Competition. During the Restricted Period, Employee shall not, directly or indirectly, for Employee’s own benefit or on behalf of any other person or entity, within the Restricted Territory:
(a) Own, manage, operate, join, control, or participate in the ownership, management, operation, or control of a Competing Business;
(b) Serve as an employee, consultant, officer, director, partner, or agent of, or advisor to, a Competing Business; or
(c) Otherwise engage in any activity that is in competition with the Business and that is the same as or substantially similar to the duties Employee performed for Employer during the twelve (12) months preceding the Termination Date.
4.2 Reasonableness; Reformation. The Parties agree that the covenants in this Section 4 are reasonable in duration, territory, and scope and are necessary to protect Employer’s legitimate business interests, including its Confidential Information and goodwill. If, however, a court of competent jurisdiction finds any provision of this Section 4 overly broad or otherwise unenforceable, the court shall reform such provision to the minimum extent necessary to render it enforceable.
4.3 Exceptions. Nothing in this Agreement prohibits Employee from (a) owning, solely as a passive investment, up to two percent (2%) of the outstanding equity of a publicly traded entity that constitutes a Competing Business, or (b) working in a capacity wholly unrelated to the Business for any entity that may also have divisions that constitute a Competing Business, provided Employee’s duties do not involve those competing divisions.
5. CONFIDENTIALITY & PROPRIETARY RIGHTS
5.1 Confidential Information. “Confidential Information” means all non-public information in any form that Employer designates as confidential or that should reasonably be understood to be confidential given the nature of the information and the circumstances of disclosure, including without limitation trade secrets, pricing, customer lists, supplier information, methods, processes, techniques, software, and business plans.
5.2 Non-Disclosure. Employee shall hold all Confidential Information in strict confidence and shall not, without Employer’s prior written consent, disclose, use, copy, or permit the disclosure or use of Confidential Information other than as required in the ordinary course of Employee’s employment.
5.3 Return of Materials. Upon termination of employment or at any earlier request by Employer, Employee shall promptly return (or destroy, at Employer’s election) all tangible materials containing Confidential Information and certify such return or destruction in writing.
5.4 Proprietary Rights. Employee agrees that all inventions, works of authorship, developments, improvements, and other intellectual property that Employee conceives or reduces to practice during employment and that relate to the Business (“Inventions”) are and shall remain the sole and exclusive property of Employer. Employee shall execute all documents necessary to vest such rights in Employer.
[// GUIDANCE: Vermont has adopted the Uniform Trade Secrets Act. The confidentiality provisions herein complement, and do not replace, statutory protections.]
6. NON-SOLICITATION & NON-INTERFERENCE
6.1 Customers and Prospects. During the Restricted Period, Employee shall not, directly or indirectly, solicit or attempt to solicit business from any person or entity (a) that is or was a customer of Employer within the twelve (12) months preceding the Termination Date and (b) with whom Employee had material business contact on Employer’s behalf.
6.2 Employees and Independent Contractors. During the Restricted Period, Employee shall not, directly or indirectly, solicit, recruit, hire, or encourage to leave the employ of Employer any person who is or was employed or engaged by Employer during the six (6) months preceding such solicitation.
6.3 Suppliers. Employee shall not, during the Restricted Period, induce or attempt to induce any supplier or vendor of Employer to terminate or adversely modify its relationship with Employer.
7. REPRESENTATIONS & WARRANTIES
7.1 Employee’s Authority. Employee represents and warrants that Employee is not a party to any agreement, and is not subject to any restriction, that would prevent Employee from entering into or fully performing this Agreement.
7.2 No Conflicting Obligations. Employee represents that Employee’s execution and performance of this Agreement will not breach any obligation owed to any former employer or other third party.
7.3 Survival. The representations and warranties in this Section 7 shall survive the execution of this Agreement and the termination of Employee’s employment.
8. REMEDIES; INJUNCTIVE RELIEF
8.1 Acknowledgement of Irreparable Harm. Employee acknowledges that a breach of Sections 4, 5, or 6 would cause Employer irreparable harm for which money damages alone would be an inadequate remedy.
8.2 Injunctive Relief. Accordingly, Employer shall be entitled to seek immediate injunctive relief (temporary, preliminary, and permanent) and any other equitable remedies without the necessity of posting bond or proving actual damages, in addition to any other remedies available at law or in equity.
8.3 Cumulative Remedies. All rights and remedies provided in this Agreement are cumulative and not exclusive, and the exercise by Employer of any right or remedy shall not preclude the exercise of any other right or remedy.
8.4 Tolling. The Restricted Period shall be tolled and shall not run during any time Employee is in breach of Sections 4, 5, or 6.
9. INDEMNIFICATION; NO LIABILITY CAP
9.1 Indemnification by Employee. Employee shall indemnify, defend, and hold harmless Employer and its Affiliates, and their respective officers, directors, employees, and agents, from and against any and all losses, damages, liabilities, deficiencies, claims, actions, judgments, settlements, interest, awards, penalties, fines, costs, and expenses (including attorneys’ fees) arising out of or resulting from Employee’s breach of this Agreement.
9.2 No Limitation of Liability. The Parties expressly agree that no limitation of liability or liability cap shall apply to any breach of this Agreement by Employee.
10. DISPUTE RESOLUTION
10.1 Governing Law. This Agreement and any dispute arising hereunder shall be governed by and construed in accordance with the laws of the State of Vermont, without regard to its conflict-of-laws rules.
10.2 Forum Selection. Each Party irrevocably submits to the exclusive jurisdiction of the state courts located in [COUNTY], Vermont, and waives any objection based on improper venue or forum non conveniens.
10.3 Arbitration. [OPTIONAL] The Parties may, by separate written agreement executed after the Effective Date, elect to submit any dispute arising out of this Agreement to final and binding arbitration administered by [ARBITRATION PROVIDER] in accordance with its rules then in effect. Unless and until such written agreement is executed, all disputes shall be resolved in accordance with Section 10.2.
10.4 Jury Trial Waiver. [OPTIONAL] EACH PARTY HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.
11. GENERAL PROVISIONS
11.1 Amendment; Waiver. No amendment to or waiver of any provision of this Agreement shall be effective unless in writing and signed by both Parties. No waiver shall constitute a waiver of any subsequent breach.
11.2 Assignment. This Agreement is personal to Employee and may not be assigned by Employee. Employer may assign this Agreement to any Affiliate or successor by merger, consolidation, or sale of substantially all of its assets.
11.3 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns.
11.4 Severability. If any provision of this Agreement is held invalid or unenforceable, such provision shall be reformed to the minimum extent necessary to render it valid and enforceable, and the remaining provisions shall remain in full force and effect.
11.5 Integration. This Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous understandings, agreements, and representations, whether oral or written.
11.6 Counterparts; Electronic Signatures. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together constitute one and the same instrument. Signatures delivered by electronic means (e.g., PDF, DocuSign) shall be deemed original signatures for all purposes.
11.7 Notices. All notices, requests, consents, claims, demands, waivers, and other communications under this Agreement must be in writing and addressed to the Parties at their respective addresses set forth above (or such other address designated in writing). Notices shall be delivered by personal delivery, nationally recognized overnight courier, certified mail (return receipt requested), or email with confirmation of receipt.
11.8 Headings. Headings are for reference purposes only and shall not affect the interpretation of this Agreement.
12. EXECUTION BLOCK
IN WITNESS WHEREOF, the Parties hereto have executed this Employee Non-Compete Agreement as of the Effective Date.
EMPLOYER:
[EMPLOYER LEGAL NAME]
By: ____
Name: ____
Title: _____
Date: _________
EMPLOYEE:
[EMPLOYEE FULL LEGAL NAME]
Date: _____
[// GUIDANCE: Vermont does not mandate notarization for non-compete agreements, but notarization can strengthen enforceability. Add a notarization block below if desired.]
END OF DOCUMENT