Free Non-Compete Agreement Template

CONSIDERATION

In consideration of the offer of initial employment with TechFlow Solutions, Inc. and access to confidential business information and trade secrets, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree to be bound by the terms and conditions set forth in this Agreement. The parties acknowledge that adequate, independent consideration is a substantive prerequisite to enforcement of a restrictive covenant in most jurisdictions (see Restatement (Second) of Contracts §§71, 188; Fifield v. Premier Dealer Services, 2013 IL App (1st) 120327 (continued employment alone generally insufficient absent two years of service)); where applicable, the consideration provided herein is intended to satisfy state-specific requirements such as the Illinois Freedom to Work Act (820 ILCS 90/10) and the Massachusetts Noncompetition Agreement Act (G.L. c. 149 §24L) (including any applicable garden-leave or 50%-of-salary payment obligation).

NON-COMPETITION COVENANT

For a period of one (1) year following the termination of Rebecca Chen's employment or engagement with TechFlow Solutions, Inc., for any reason, with or without cause, Rebecca Chen shall not, directly or indirectly, within the State of California:

Employee may not directly or indirectly engage in, own, manage, operate, consult for, or be employed by any business that develops, markets, or sells cloud infrastructure solutions, DevOps platforms, or containerization technologies that compete with those of the Company.

This restriction applies to any activity that is competitive with or adverse to the business of TechFlow Solutions, Inc. in the field of Software Development and Cloud Computing. The parties acknowledge that this covenant must satisfy the common-law reasonableness test as to duration, geography, and scope of activities restricted (see Restatement (Second) of Contracts §188; BDO Seidman v. Hirshberg, 93 N.Y.2d 382 (1999); HandR Block E. Tax Servs., Inc. v. McCaslin, 187 F.3d 643 (5th Cir. 1999)), and is no broader than reasonably necessary to protect TechFlow Solutions, Inc.'s legitimate business interests, including its confidential information, trade secrets, customer relationships, and goodwill.

State-Law Ban / Limitation Disclosure. The parties acknowledge that post-employment non-competition covenants against employees are void or substantially prohibited in a number of jurisdictions, including: California (Cal. Bus. and Prof. Code §16600 — absolute ban, including the 2024 amendments at §§16600.1 and 16600.5 that void out-of-state agreements and require employer notice); Oklahoma (15 Okla. Stat. §219A); North Dakota (N.D. Cent. Code §9-08-06); and Minnesota (Minn. Stat. §181.988, effective July 1, 2023, voiding covenants entered on or after that date). This covenant shall be void ab initio to the extent it conflicts with any such statute in a jurisdiction whose law governs Rebecca Chen's employment. In states permitting non-competes only subject to statutory conditions, this covenant shall be enforced only to the extent permitted, including: Washington (RCW 49.62.020 — annual earnings threshold, advance disclosure, and garden-leave requirements); Illinois (Freedom to Work Act, 820 ILCS 90); and Massachusetts (G.L. c. 149 §24L). The parties further acknowledge the Federal Trade Commission's Non-Compete Clause Rule, 16 C.F.R. Part 910, the effective date and enforceability of which remain subject to ongoing judicial review (see, e.g., Ryan LLC v. FTC, No. 3:24-cv-00986 (N.D. Tex. Aug. 20, 2024), setting the Rule aside on a nationwide basis), and agree that the operative effect of that Rule on this covenant shall be governed by the final judicial resolution thereof.

NON-SOLICITATION OF CLIENTS

During the Restriction Period, Rebecca Chen shall not, directly or indirectly, solicit, contact, or transact business with any client, customer, or prospective customer of TechFlow Solutions, Inc. with whom Rebecca Chen had direct contact or about whom Rebecca Chen acquired confidential information during the term of employment with TechFlow Solutions, Inc.. The parties acknowledge that in California customer non-solicitation covenants are generally unenforceable as restraints of trade (Cal. Bus. and Prof. Code §16600; Edwards v. Arthur Andersen LLP, 44 Cal. 4th 937 (2008)), and that this provision shall be construed to extend only to unlawful use or disclosure of TechFlow Solutions, Inc.'s trade secrets in any jurisdiction in which a broader restraint would be void; nothing herein limits remedies otherwise available under the Defend Trade Secrets Act, 18 U.S.C. §1836, or any applicable state Uniform Trade Secrets Act.

NON-SOLICITATION OF EMPLOYEES

During the Restriction Period, Rebecca Chen shall not, directly or indirectly, recruit, solicit, hire, induce, or attempt to induce any employee, consultant, or independent contractor of TechFlow Solutions, Inc. to leave the employ of or terminate their engagement with TechFlow Solutions, Inc.. The parties acknowledge that in California employee non-solicitation covenants are generally void as restraints of trade (Cal. Bus. and Prof. Code §16600; AMN Healthcare, Inc. v. Aya Healthcare Services, Inc., 28 Cal. App. 5th 923 (2018)), and that this provision shall not apply where enforcement would violate the public policy of the state whose law governs Rebecca Chen's employment.

INJUNCTIVE RELIEF

Rebecca Chen acknowledges that any breach or threatened breach of this Agreement would cause immediate and irreparable injury to TechFlow Solutions, Inc. for which monetary damages would be an inadequate remedy. Accordingly, TechFlow Solutions, Inc. shall be entitled to seek injunctive relief, specific performance, and other equitable remedies to enforce the terms of this Agreement, in accordance with Fed. R. Civ. P. 65 (or the analogous state-court rule) and the four-factor test articulated in Winter v. Natural Resources Defense Council, 555 U.S. 7 (2008), without the requirement to post a bond or other security (to the extent waivable under applicable law), or to prove actual monetary damages, in addition to all other remedies available at law or in equity, including those available under the Defend Trade Secrets Act, 18 U.S.C. §1836(b)(3).

SEVERABILITY AND BLUE-PENCIL

If any provision of this Agreement is found by a court of competent jurisdiction to be overly broad, unreasonable, or otherwise unenforceable as written, such court is expressly authorized to modify and reform such provision to the minimum extent necessary to render it enforceable (the "Blue-Pencil Doctrine"), and the Agreement as so modified shall be fully enforceable. The invalidity or unenforceability of any single provision shall not affect the validity or enforceability of any remaining provision of this Agreement. The parties acknowledge that jurisdictions vary in their adoption of "strict blue-pencil," "reasonable modification," or "red-pencil" doctrines (compare BDO Seidman v. Hirshberg, 93 N.Y.2d 382 (1999), with the strict-construction approach followed in jurisdictions such as Virginia), and that this provision shall be given its fullest permissible effect under the governing law.

GOVERNING LAW AND ENTIRE AGREEMENT

This Agreement shall be governed by and construed in accordance with the laws of the State of California, without regard to its conflict of law provisions. The parties acknowledge that certain jurisdictions (including California under Cal. Lab. Code §925 and Cal. Bus. and Prof. Code §16600.5) restrict the enforceability of choice-of-law and forum-selection clauses in employment agreements containing restrictive covenants; to the extent such mandatory provisions apply to Rebecca Chen, they shall govern notwithstanding the foregoing. This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior or contemporaneous negotiations, representations, or agreements relating to such subject matter. This Agreement may only be modified by a written instrument duly executed by both parties.