Free Employee Non-Compete Agreement Template

An employee non-compete agreement is a contract in which an employee agrees not to work for a competitor, or set up in competition, for a defined period after leaving.

It is the most contested form of restrictive covenant. Courts scrutinise employee non-competes more closely than those between businesses, because the person restricted is usually the weaker party and the restriction affects their livelihood.

That scrutiny is the starting point rather than a footnote. Whether such an agreement is enforceable at all depends entirely on where the employee works, and in some places it is limited or not permitted.

The document is usually presented at the start of employment, alongside the contract. Existing staff are sometimes asked to sign one later, which raises its own questions.

There is no responsible way for a template page to tell you whether an employee non-compete agreement will hold.

The position varies by jurisdiction and by circumstance. Some places restrict these agreements heavily, some prohibit them for certain workers or below certain earnings levels, and some will not enforce them against employees at all. Others allow them within limits that a court assesses case by case.

The law has also been moving. Employee non-competes have been the subject of legislation, regulation, and litigation in several jurisdictions in recent years, and what was true when an agreement was signed may not be true when someone tries to rely on it.

This page therefore states no rule on enforceability, no permitted duration, no geographic limit, and no earnings threshold anywhere.

Employers should take advice from an employment lawyer before using a standard form. Employees asked to sign, or considering a move while bound by one, should take advice on their specific agreement before acting.

This is where employee non-competes most often fail on their own terms, and it is worth understanding regardless of jurisdiction.

A restriction is a real cost to the person accepting it, and the question of what they get in return matters. Signing at the point of a job offer is one situation; being handed a non-compete two years into a role, with continued employment as the only thing offered, is quite another.

In some places continued employment is sufficient. In others it is not, and something additional — a payment, a promotion, or a genuine benefit — is required for the restriction to hold.

Treat that as a question to ask your lawyer rather than an assumption to make. If the honest answer is that the employee received nothing identifiable, the agreement may be weaker than it appears.

Tip: If you are introducing non-competes to existing staff, get advice on timing and consideration before circulating anything. Asking everyone to sign at once and discovering afterwards that the restrictions do not hold is an expensive way to learn.

Breadth is the enemy here. The wider the restriction, the more likely it is to be narrowed or struck out entirely.

Restrict the activity, not the industry. Preventing someone doing the specific work they did for you, for a specific type of competitor, is defensible in a way that barring them from an entire sector is not.

Match the geography to where you actually compete. A restriction covering territory the business does not operate in invites the argument that it protects nothing.

Keep the duration short and justifiable. The relevant question is how long your information stays commercially valuable, not how long you would prefer the person stayed out.

Apply it selectively. Giving every employee the same non-compete regardless of role is a common failure; a warehouse operative and a sales director do not present the same risk, and a blanket approach undermines the agreements you actually need.

Tip: Consider whether confidentiality and non-solicitation clauses would do the job. They are narrower, more likely to hold, and address most of what employers genuinely worry about.

Subject to what is permitted where you are, these agreements address the same points.

The Parties and Role

Employer, employee, and the position held, which frames what needs protecting.

The Restricted Activity

What the employee may not do, described specifically.

Geographic Scope

Where the restriction applies.

Duration

How long it runs after employment ends.

Consideration

What the employee receives in exchange for accepting it.

Definition of Competitor

Described by activity rather than by a list of names that will date.

Carve-Outs

Roles, sectors, or activities expressly permitted.

Severability

What happens if a court finds part of it unenforceable.

Governing Law and Signatures

Which law applies, plus signature blocks and dates.

An employee non-compete agreement should be drafted narrowly and reviewed before use. Document Genius walks you through each section with simple questions.

1. Confirm It Is Permitted

Check with an employment lawyer for the jurisdiction and the role.

2. Identify the Protectable Interest

Name what you are actually protecting, not competition in general.

3. Limit Activity, Geography, and Duration

Each to what you could justify to a court.

4. Address Consideration Explicitly

Say what the employee receives.

5. Decide Which Roles Need It

Apply it selectively rather than across the workforce.

6. Have It Reviewed Before Anyone Signs

Do not reuse a form across jurisdictions. Start yours now and have a draft ready for your lawyer.

How a departure is handled affects what happens next more than most employers expect.

Remind the employee what applies, in writing and neutrally. Someone who leaves unaware of a restriction they signed three years ago may breach it without intending to.

Consider whether you want to enforce at all. Enforcement is expensive, uncertain, and public, and many employers conclude that a departing employee poses less risk than they first feared.

Be aware that how someone leaves can matter. In some places the circumstances of a termination affect whether a restriction can be relied on, which is another question for your lawyer rather than an assumption.

If you are the employee, do not simply assume the agreement is void because you have heard non-competes are unenforceable. Take advice on your specific document before you resign or accept an offer, because acting on a general impression is how people end up in litigation they could have avoided.

Nothing on this page is legal advice, and no rule on enforceability, consideration, duration, geography, or termination is stated anywhere on it.