How to Write a Non-Compete Agreement

Upon signing a non-compete agreement, an employee or contractor agrees in writing not to compete with the company who hired him. This can mean that the person cannot solicit his employer's clients or it may mean he cannot go into the same business as his employer. Write a non-compete agreement to protect your company.

Decide what terms you want the employee to agree to before you begin to write the non-compete agreement. Use a template form you find at or write your own agreement from scratch.

Define what the employee or contractor can or cannot do. For example, you may state, "Employees may not engage in the plumbing business for a period of one year after termination for whatever reason from ABC Plumbers".

Write appropriate additional clauses to your non-compete agreement. For example, "In addition to not opening or otherwise engaging in the business of plumbing, employee or contractor also agrees to not solicit freelance plumbing work from any clients of ABC Plumbing".

Include a non-consulting clause as well for better protection. For example, "The employee or contractor further agrees not to give consultation on the business of plumbing nor will the employee or contractor reveal to anyone at anytime trade secrets learned at ABC Plumbers".

End the non-compete agreement with the penalty the employee or contractor will incur if he violates the agreement. For example, "If the employee or contractor knowing or unknowingly violates this agreement he shall pay restitution of whatever amount is determined by an arbitrator or court for injuries resulting from breach of this agreement".

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