An employee non-compete agreement is a legal document that an employer will ask their employee to sign to prevent them from directly competing with the business following the termination of their business relationship and during their employment term. The exact restrictions that the employer wishes to place on their employees can be relayed in the document as can the length of the term for which the agreement stands following termination. Not all non-compete agreements hold up in a court of law as it is possible that the document may be deemed injurious to the public, or broader than necessary to protect the employer’s business interests.

Employee Non-Disclosure Agreement (NDA) – To prohibit an employee from revealing trade secrets or proprietary information to a 3rd party.

Is a Non-Compete Enforceable?

Depends on the State (View State-by-State Laws). There has been a recent push in most States to restrict or limit the use of non-compete clauses and agreements. For example, the States of California, Montana, North Dakota, and Oklahoma prohibit the use of a non-compete.

Using an NDA to Protect Trade Secrets

Use a Non-Disclosure Agreement (“NDA”) if a company is seeking to protect its trade secrets and proprietary information from employees.

  • Primary Purpose: Prohibits an employee from using trade secrets learned with a company and apply them to a competitor or for themselves.
  • Legal: All 50 States.

Employee Non-Compete Agreement