A business company and an organization become successful because of the hard work and the perseverance of their members or employees. However, the concern of most companies centers on how they can protect their assets and tactics once an employee who knows their confidential properties leaves their premises. This is when various documents that revolve around keeping a company protected from their competitors must be made such as a non-competition agreement contract form.

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What Is a Non-Competition Agreement Contract Form?

A non-competition agreement contract form is a document that is often used by business companies for their employees and staff. This document ensures that the company’s trade secrets and confidential information will not be used by outside of the company especially after an employment contract is being terminated. Aside from employees and staff, members of a business partnership or a joint venture agreement also use this form to protect the assets of the company. Providing this contract form before accepting anyone to be a part of the company is a necessity since presenting the form after the acceptance can often imply that options of whether to sign or to decline can be up for a consideration.

Confidentiality Non-Compete Agreement Contract Form

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Top Reasons Why Non-Competition Agreement Contract Form Is Important

Every legal agreement and contract form is important and must be taken seriously by the users of the form. And, although it is common that non-competition agreement contract forms are created for protecting the company, there are also other reasons that are more relevant to the users of this contract. Below are two other reasons why non-competition agreement contract forms are significantly used:

1. Protects Training Investments – Companies nowadays accept employees and have them undergo an employee training assessment program to determine the abilities and the suitability of a new hire for the job that he is planning to take over. However, it is also common that there are newly hired employees who will leave the company days after the training session has been conducted. This action must not be taken for granted by any company since this can risk their business if the employee will deliver what he acquired to the company’s competing organization. But, if the employee has signed a non-competition agreement contract before he was presented to an employment contract, then the employee will be informed about the laws and his mandated obligations to leave what he learned after he leaves the company.

2. Limits Competitors – In connection to the aforementioned training investment protection, a non-competition agreement contract also serves as a tool that limits the competitors of a company to accept the company’s former employees in order for them to avoid lawsuits and cases. Basically, a former employee can be hired by the competitor after a period of two or more years, which ensures that the knowledge obtained by the employee will not be used for the competitor’s benefits and advantages.

Employee Non-Competition Agreement Contract Form

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What’s in a Non-Competition Agreement Contract Form?

Non-competition agreement contract forms are documents that must tackle and discuss the intent of a company to keep its details and information private and confidential. This form must also be able to enlist the restrictions of the company adequately with provisions and clauses. Additionally, it is essential that a non-competition agreement contract will be created to address different job positions or be created separately depending on what sort of data and information is being used by the employee during his employment in the company. This helps in securing that every employee will understand their roles in keeping the company’s secrets and maintaining the company’s phase in leaning toward success.

Employee Non-Disclosure Non-Compete Agreement Contract Form

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Other inclusions found in a non-competition agreement contract forms are the details of the contract’s execution such as the period or length of the employee’s responsibilities and liabilities, and the dispute resolutions that will serve as a guide for the company to determine what penalties will be faced by the employee if he will cause a breach or will fail to do what he is required to do.

General Employee Non-Compete Agreement Contract Form

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The Role of Non-Competition Agreement Contract Forms in Educational Institutions

The most common place where a non-competition agreement contract form is used is in an office; however, this document is not limited to be used by companies only but also educational institution members and their faculty staff. You may also see non-compete agreement form samples.

With a non-competition agreement contract form, a school administration will be certain that their teaching strategies, their curriculum, and school activities will not be copied by other schools or institutions. For instance, a soccer coach who will sign a non-competition agreement contract will be restricted to interact with other coaches of the competing universities which will then allow the coach to focus on planning for his team. Additionally, the contract also prohibits former coaches and workers to solicit or engage current players or students from a university for them to play with other teams outside the campus.

Coach Non-Compete Agreement Contract Form

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Tips for Creating Non-Competition Agreement Contract Forms

Non-competition agreement contract forms are significant to be created by companies for their employees who manage restricted data and information. But, when creating this type of contract, it is important that a company acknowledges the tips below:

1. Know the rules of the court. This refers to determining what specific laws will govern and will promote the execution of the contract since there are different laws in every state and country. Also, a company must take note if the state that they are residing in bans the use of non-competition agreement contracts to avoid a conflict with the government or the legal authorities of the state. You may also see employment agreement samples.

2. Be reasonable and indicate a consideration. Although there are varieties of contract agreements related to employees and confidentiality online, it is essential that the statements and the provisions that a company incorporates in the contract are all based on what they deem necessary and know that it is required by the state. Reasonability is significant for this contract especially when determining the length of time that the employee will be prohibited to apply for competing companies.

On the other hand, an employee consideration clause must also be incorporated into the contract. This consideration clause will state what the company will give in order to have the employee’s approval and signature on the form such as an additional payment to the employee’s salary or other rewards that can engage employees and have them become interested in the contract. You may also see employment agreement form samples.

3. Use simple and understandable terms. Significant words used in the contract must be defined properly, especially those that have more than a single definition. These terms must be stated in the contract’s definition section on the first part of the whole agreement. This allows the parties, the employees, the management, and the authority in the state, to know what each statement means and how the words are used for executing the contract. You may also see general agreement sample forms.

Independent Contractors Non-Compete Agreement Contract Form

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How to Create a Non-Competition Agreement Contract Form

Follow the steps below while keeping in mind the aforementioned tips of creating a simple non-competition agreement contract form for company employees, staff, and workers:

Step 1: Have a preamble. This is where the name of the employee, his job position, and the name of the employer or company will be stated in a paragraph form. Following this is a clause or statement that indicates the objective and the intent of making the contract. You may also see independent contractor agreement forms.

Step 2: State the covenants against the competition. This refers to the rules and regulations of the company that must be followed by the employee about the competing companies in the industry. Specifically, the radius or the locations that are prohibited for the employee to be hired once he ceased his employment will be indicated in this section along with the prohibition period or length and a non-disclosure statement. You may also see sample independent contractor agreements.

Step 3: Indicate an “at will” clause. This clause implies that the employee signed the contract based on his own preference and will. This is essential for acknowledging and proving that the employee was not threatened by the company or provoked in some way for him to sign the non-competition agreement contract. You may also see sample subcontractor agreement forms.

Step 4: Describe the penalties. This section will inform the employee about the possibilities of penalties if he will violate any section of the contract. For instance, the company or the employer may require the employee to provide a repayment of the profit and compensation that the employee acquired during his employment if he indeed has violated the contract’s clauses and provisions. You may also see business agreement forms.

Vendor Non-Competition Agreement Contract Form

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Step 5: Incorporate a “reasonableness of restrictions.” Although there are some parts of the contract that some employees deem unreasonable or inappropriate, once they sign the form, they are implying that they find the terms and the contract provisions reasonable enough to be executed. This is why it is important that employees must read and review the terms of the contract to avoid getting involved in matters that they did not intend to be involved with. You may also see personal agreement form samples.

Step 6: Have a governing law statement. This defines what laws of the state will protect the contract and will legalize the agreement.

Step 7: Include a severability clause. This type of clause allows the company to execute the rest of the contract regardless if one of the terms and clauses are invalidated and revoked by the state. You may also see basic agreement form samples.

Step 8: Add a signature block. This serves as the last section of the contract which will contain the signatures of the employee and the company’s representative with the date of when they agreed to sign the contract. You may also see sample disclosure agreement forms.

Proprietary Information and Non-Compete Agreement Contract Form

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The Different between Non-Competition Agreement Contracts from Non-Disclosure Agreement Contracts

A non-competition contract and a non-disclosure contract are two documents that are necessary to be used by companies and businesses. However, these two documents are often misinterpreted as similar types of paperwork, but they really are two separate forms. When a company creates a non-disclosure agreement contract, it implies that they require their employees to keep confidential information by themselves only, while in a non-competition contract, they will limit the employees to use their confidential information and work with their competitors for a specified period of time.

With this, companies must require employees and their staff to sign both documents, the non-compete, and the non-disclosure, with their employment contract during the day of the employee’s acceptance and welcoming in the company. And although creating these forms add up to the work and the process of hiring employees, companies must always provide these documents since it provides tons of benefits other than protecting the business from losing its valuable assets.

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