A non-competition clause, also known as a non-compete agreement or covenant not to compete, is a common provision included in employment contracts. This clause prohibits an employee from working for a competing company for a certain period of time after leaving their current employer.

Employers include this clause in their contracts to protect their business interests, including trade secrets, confidential information, and customer relationships. When an employee leaves a company, they may have knowledge of sensitive information that could be used to benefit a competing business. The non-competition clause aims to prevent this from happening.

Here is an example of a non-competition clause in an employment contract:

Non-Competition Covenant: Employee agrees that during the term of this Agreement and for a period of twelve (12) months following the termination of this Agreement, whether voluntary or involuntary, Employee will not engage in any business or employment that competes with the Company’s business.

This clause is brief and straightforward. It specifies that the non-competition provision will last for 12 months after the employee leaves the company. It also prohibits the employee from working in any business or employment that competes with the company.

It is important to note that non-competition agreements are not always enforceable in all states and countries. The legality of these clauses varies by jurisdiction, and courts may strike them down if they are overly restrictive. Employers should consult with legal counsel when drafting non-competition clauses to ensure they comply with applicable laws.

In addition to non-competition clauses, employers may also include non-solicitation clauses or confidentiality clauses in their employment contracts. Non-solicitation clauses prohibit employees from soliciting the company’s clients or customers after leaving their job. Confidentiality clauses prohibit employees from sharing sensitive information with anyone outside of the company.

Overall, non-competition clauses are a common provision in employment contracts that aim to protect employers’ business interests. Employers should consult with legal counsel to ensure that their non-competition clauses comply with applicable laws and are reasonable in scope.