Free Non-Compete Agreement Template — Philippines
A Non-Compete and Non-Solicitation Agreement drafted in line with Philippine jurisprudence — particularly the reasonableness test established by the Supreme Court of the Philippines in Tiu v. Platinum Plans Phil., Inc. (G.R. No. 163512). Use this template to protect trade secrets, client relationships, and key staff when engaging executives, professionals, contractors, or commercial partners. Generate a professional PDF in minutes — fully compliant with the Civil Code of the Philippines, the IP Code (RA 8293), and the Data Privacy Act 2012.
Geographic Scope: Metro Manila (the National Capital Region)
Restricted Activities: During the period of employment or contract engagement, the Restricted Party shall not, directly or indirectly:
During employment, the Restricted Party shall not:
1. Engage in or assist any enterprise in the development, marketing, or sale of SaaS products that directly compete with the Employer's product offerings
2. Accept employment or consulting engagements from listed direct competitors of the Employer
3. Solicit or divert the Employer's clients to a competitor
4. Use or disclose the Employer's technical or business Confidential Information for any competing purpose
The Parties acknowledge that these during-engagement restrictions are necessary to protect the Employer's legitimate business interests and are consistent with the Restricted Party's duty of loyalty and good faith under Civil Code Articles 19 and 1170.
For the period stated above following the date of separation, the Restricted Party shall not, within Metro Manila (the National Capital Region), directly or indirectly carry on or be engaged in any business that competes with the Employer in respect of the activities listed in Clause 2 above. The Parties expressly acknowledge that this restriction is reasonable in duration, scope, and territory, and is supported by the Employer's legitimate proprietary interest in its confidential information, client relationships, and goodwill, consistent with the reasonableness test applied by the Supreme Court in Tiu v. Platinum Plans Phil., Inc., G.R. No. 163512 (February 28, 2007). If a court of competent jurisdiction finds the duration, scope, or territory unreasonable in any respect, the Parties intend that the court reduce or "blue-pencil" the unreasonable element to the maximum extent enforceable, rather than strike the clause in its entirety.
Client Non-Solicitation (12 months post-separation): For a period of 12 months following the date of separation, the Restricted Party shall not, directly or indirectly, solicit, contact, or induce any Restricted Client to reduce or terminate their business relationship with the Employer, or to engage with any competing enterprise for services similar to those provided by the Employer.
Definition of Restricted Clients: "Restricted Clients" means all clients and prospective clients of the Employer with whom the Restricted Party had direct personal contact, or about whom the Restricted Party received material confidential information, in the 12 months preceding the date of separation.
Employee Non-Solicitation (12 months post-separation): For a period of 12 months following the date of separation, the Restricted Party shall not directly or indirectly solicit, recruit, hire, or attempt to solicit any employee, consultant, or contractor of the Employer with whom the Restricted Party had material professional contact during the engagement, without the Employer's prior written consent.
Trade Secret Protection: The Restricted Party acknowledges that the Employer's source code, algorithms, proprietary SaaS architecture, and client database constitute trade secrets. The Restricted Party shall not use or disclose these trade secrets during or after the engagement, consistent with Civil Code Art. 19, 20, 26 and Air Philippines Corp. v. Pennswell, Inc., G.R. No. 172835.
Data Privacy Act of 2012 (RA 10173): To the extent the Restricted Party processes personal data of the Employer's employees, customers, or other data subjects in the course of the engagement, the Restricted Party shall comply with all applicable obligations under the Data Privacy Act of 2012 (RA 10173), including the lawful processing requirements of Sections 11 to 13, security safeguards under Section 20, and breach notification under NPC Circular 16-03. Upon termination of the engagement, the Restricted Party shall not retain any personal data except as required by applicable law. Unauthorised processing or disclosure may give rise to criminal liability under Sections 25 to 32 of RA 10173.
Permitted Disclosures: Disclosure required by a court order or applicable Philippine law, provided the Employer is given prompt written notice and a reasonable opportunity to seek a protective order, is permitted.
Return of Materials: Upon termination, the Restricted Party shall immediately return all Company property, including laptop, access credentials, and any copies of Confidential Information in any medium. Personal data of the Employer's customers and employees must be deleted in accordance with the Data Privacy Act of 2012 (RA 10173) and NPC Circular 16-01.
What is a Non-Compete Agreement?
A Non-Compete Agreement is a contract by which one party — typically an executive, professional, key employee, contractor, shareholder, or seller of a business — undertakes not to engage in activities that compete with a Company's business for a defined period and within a defined territory after the engagement ends. In the Philippines, such agreements are anchored in Article 1306 of the Civil Code (Republic Act 386), which gives parties freedom to stipulate any terms not contrary to law, morals, good customs, public order, or public policy. The Civil Code's Article 1409 declares void any contract whose cause, object, or purpose is contrary to public policy — and unreasonable restraints of trade fall squarely within this prohibition.
The leading Philippine authority is Tiu v. Platinum Plans Phil., Inc., G.R. No. 163512 (February 28, 2007), where the Supreme Court of the Philippines held that a post-employment non-compete is enforceable only when it is reasonable in (a) duration, (b) territory, and (c) scope of restricted activities, and is supported by valuable consideration. The Court reaffirmed this framework in Avon Cosmetics, Inc. v. Luna, G.R. No. 153674, and Daisy's Home & Auto Supply v. Court of Appeals. A clause that bans a Filipino professional from working in the entire industry, for many years, across the whole archipelago, with no separate consideration, will be struck down as restraint of trade contrary to public policy.
Non-compete provisions in the Philippines are commonly used in five contexts: (1) senior executive and managerial employment contracts, where the employer protects strategic knowledge and client relationships; (2) sale of business or sale of shares, where the buyer protects the goodwill purchased; (3) shareholder or partnership agreements, restraining founders from setting up rival ventures; (4) independent contractor and consulting engagements; and (5) franchise and distribution agreements. Although the Labor Code (Presidential Decree 442) does not directly regulate post-employment non-competes, the National Labor Relations Commission (NLRC) and the Regional Trial Courts (RTC) of the Philippines apply the Civil Code reasonableness test to balance the employer's legitimate proprietary interests against the worker's constitutional right to gainful employment under Article XIII, Section 3 of the 1987 Constitution.
What this template covers
The Doxuno Non-Compete Agreement template includes every clause needed to satisfy the Tiu v. Platinum Plans reasonableness test, plus optional Expert sections for trade secret protection, non-solicitation, and RTC injunctive relief.
Parties and engagement context
Company, restricted person, and the underlying engagement (employment, contract, sale)
Purpose and legitimate proprietary interest
Trade secrets, client goodwill, and confidential information being protected
During-engagement restrictions
No competing activities while the engagement is in force
Post-engagement non-compete
Reasonable duration (typically 6-24 months) and defined territory
Defined territory (city, region, ASEAN)
Geographic scope tailored to the Company's actual market in the Philippines
Defined restricted activities
Specific competing services or products, not the entire industry
Non-solicitation of clients
12-month prohibition on poaching customers under Tiu reasonableness test
Non-solicitation of employees
12-month prohibition on hiring away Company staff
Confidentiality and trade secrets (RA 8293)
Indefinite protection of trade secrets per Air Philippines v. Pennswell
Consideration and severability
Valuable consideration required by Tiu v. Platinum Plans; partial enforcement
Remedies and RTC injunction
Damages under Civil Code Arts. 2199-2235 and Rule 58 preliminary injunction
Governing law and jurisdiction
Philippine law, RTC venue, and optional PDRCi arbitration under RA 9285
How to create your Non-Compete Agreement
No prior legal training required. The Doxuno generator walks you through every section with Philippine-specific drafting guidance.
- 1
Identify the Company and the restricted person
Provide the registered name, SEC registration under the Revised Corporation Code (RA 11232), TIN issued by the BIR, and principal office address of the Company. For the restricted person, indicate full legal name, civil status, citizenship, TIN, and current Philippine address. Specify the underlying engagement: employment contract, independent contractor agreement, sale of shares, partnership, or franchise. Philippine courts examine the engagement context to determine whether sufficient consideration exists for the non-compete.
- 2
Articulate the legitimate proprietary interest
A non-compete will only be enforced when it protects a legitimate proprietary interest of the Company — typically trade secrets under the IP Code (RA 8293) and Article 28 of the Civil Code, confidential customer information, specialized training, or goodwill purchased in a sale. State this interest clearly in the recitals, with reference to the actual confidential information or relationships at stake. Generic clauses ("the Company has confidential information") are routinely set aside by the Regional Trial Courts of the Philippines as inadequate.
- 3
Set a reasonable duration and territory
Under Tiu v. Platinum Plans (G.R. No. 163512), Philippine courts evaluate the reasonableness of duration and territory together. Typical enforceable periods: 6 to 12 months for mid-level professionals, 12 to 24 months for senior executives, up to 36 months for sellers of a business with significant goodwill. Territory must match the Company's actual market — for example, "Metro Manila and Mega Cebu" for a regional retailer, "the Philippines" for a national brand, "ASEAN" only for businesses with verifiable regional operations. Worldwide non-competes for ordinary Filipino employees are routinely struck down as unreasonable.
- 4
Define restricted activities precisely and add non-solicitation
Describe the restricted activities specifically rather than banning the entire industry. For example, restrict "engaging in the development of cloud-based logistics software for SMEs in the Philippines" rather than "any IT activity". Add 12-month non-solicitation of clients (the Company's customers with whom the restricted person had material contact) and of employees (Company staff at supervisor level or above). Non-solicitation clauses are generally easier to enforce than full non-competes because they are less restrictive of employment freedom and align with Article 28 of the Civil Code on unfair competition.
- 5
Provide consideration, set venue, and download
Tiu v. Platinum Plans requires valuable consideration for a post-engagement non-compete in the Philippines: a sign-on bonus, additional severance pay, an equity vesting award, retention bonus, or — for sale of business — the purchase price itself. State the consideration explicitly. Choose the venue for disputes (commonly the RTC of Makati, Taguig BGC, Quezon City, Pasig Ortigas, Manila, or Cebu City) and optionally elect arbitration before the Philippine Dispute Resolution Center, Inc. (PDRCi) under the Alternative Dispute Resolution Act 2004 (RA 9285). Doxuno produces a clean PDF — sign and notarize before a Notary Public commissioned by the Executive Judge of the RTC for stronger evidentiary weight.
Legal considerations in the Philippines
Philippine law balances employer protection against the constitutional right to gainful employment. The four areas below decide most non-compete disputes.
This template is provided for informational purposes only and does not constitute legal advice. For high-value executive or M&A non-competes, please consult a licensed Philippine lawyer admitted to the Integrated Bar of the Philippines (IBP).
Reviewed by legal professionals. The clauses have been reviewed against the Civil Code of the Philippines, the IP Code (RA 8293), Tiu v. Platinum Plans (G.R. No. 163512), and the Data Privacy Act 2012, ensuring legal soundness for ordinary Philippine engagements.
The Tiu v. Platinum Plans reasonableness test
In Tiu v. Platinum Plans Phil., Inc., G.R. No. 163512 (February 28, 2007), the Supreme Court of the Philippines confirmed that post-employment non-compete clauses are valid only when reasonable. The Court applies a multi-factor test: (a) duration must not exceed what is necessary to protect the Company's legitimate interest — typically 6 to 24 months; (b) territory must match the Company's actual market presence in the Philippines; (c) scope of restricted activities must be limited to genuinely competing work, not the entire industry; (d) the restraint must protect a legitimate proprietary interest — trade secrets, customer goodwill, specialized training; and (e) the restricted person must receive valuable consideration. Avon Cosmetics, Inc. v. Luna (G.R. No. 153674) and Daisy's Home & Auto Supply v. Court of Appeals reinforced this framework. A clause failing any prong is void as restraint of trade contrary to public policy under Article 1409 of the Civil Code.
Trade secret protection under the IP Code (RA 8293)
Trade secret protection in the Philippines stands separately from contractual non-compete and is generally easier to enforce. The Intellectual Property Code (RA 8293), Article 28 of the Civil Code on unfair competition, and the landmark case Air Philippines Corp. v. Pennswell, Inc. (G.R. No. 172835, December 13, 2007) protect undisclosed business information that has commercial value because of its secrecy and is the subject of reasonable measures to keep it secret. The non-compete agreement should explicitly identify the categories of information considered trade secrets — pricing algorithms, customer lists, manufacturing processes, source code, supplier networks — and impose perpetual confidentiality obligations on those items, even after the contractual non-compete period expires. Where trade secret misappropriation occurs, the Company may seek injunctive relief from the Regional Trial Court, damages under Articles 2199-2235 of the Civil Code, and criminal liability under Article 168 of the IP Code (unfair competition) carrying fines and imprisonment in the Philippines.
Non-compete in employment vs in sale of business
Philippine courts apply different levels of scrutiny depending on context. In employment cases, the Tiu v. Platinum Plans test is applied strictly because the Constitution protects the employee's right to gainful employment under Article XIII, Section 3 of the 1987 Constitution; non-competes longer than 24 months are routinely cut down. In sale-of-business cases, courts are far more permissive: the seller has received the purchase price as consideration for the goodwill, so longer durations (24-36 months) and broader territories are upheld — see Daisy's Home & Auto Supply v. Court of Appeals. In shareholder agreements among partners building a business together, Philippine courts examine reasonableness alongside the partners' bargaining equality. The Doxuno template adapts duration and scope automatically based on the engagement type selected.
Remedies, RTC injunction, and dispute resolution
Where a non-compete is breached, the Company in the Philippines may seek (1) a writ of preliminary injunction from the Regional Trial Court under Rule 58 of the Rules of Court to immediately stop the competing activity — this is the most effective remedy and may be granted ex parte for 72 hours pending hearing under Section 5 of Rule 58; (2) damages under Articles 1170, 2199-2235 of the Civil Code (actual, moral, and exemplary), plus liquidated damages if pre-agreed under Articles 2226-2228; (3) where trade secrets are misused, criminal prosecution for unfair competition under Article 168 of the IP Code (RA 8293) carrying fines and imprisonment; and (4) where personal data is misused, complaint to the National Privacy Commission under the Data Privacy Act 2012 (RA 10173) with administrative fines up to ₱5,000,000 per violation under NPC Circular 2022-01. The agreement may elect institutional arbitration before the Philippine Dispute Resolution Center, Inc. (PDRCi) under RA 9285, with provisional injunctive relief from the RTC remaining available under Section 28 of the Act.
Frequently Asked Questions
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