Subcontractor Non-Compete Agreement Template

Crafting a Robust Non-Compete Agreement

A well-structured non-compete agreement is a vital tool for protecting a company’s proprietary information and business interests. For subcontractors, such agreements can help maintain a healthy working relationship while safeguarding sensitive data. This guide will delve into the key elements of a comprehensive subcontractor non-compete agreement template.

Scope of the Agreement

Clearly define the scope of the agreement to ensure its enforceability. This includes:

Parties Involved: Explicitly identify the subcontractor and the company entering into the agreement.

Duration: Specify the duration of the non-compete clause, ensuring it aligns with the nature of the subcontractor’s work and the company’s legitimate business interests.

Geographic Scope: Clearly delineate the geographic area where the non-compete restriction will apply. This should be reasonably limited to protect the company’s interests without unduly restricting the subcontractor’s future employment opportunities.

Prohibited Activities

Outline the specific activities that the subcontractor is prohibited from engaging in after the termination of the agreement. These activities should be directly related to the company’s business and involve the use of proprietary information or trade secrets.

Confidentiality and Proprietary Information

Reinforce the subcontractor’s obligation to maintain the confidentiality of the company’s proprietary information and trade secrets. This includes:

Definition of Proprietary Information: Provide a clear definition of what constitutes proprietary information, encompassing trade secrets, customer lists, client data, and other confidential materials.

Obligation to Protect: Emphasize the subcontractor’s duty to protect the confidentiality of proprietary information, including measures such as secure storage, limited access, and non-disclosure to third parties.

Return of Materials: Require the subcontractor to return all proprietary materials and copies thereof upon termination of the agreement.

Indemnification

Include an indemnification clause to protect the company from any losses or damages arising from the subcontractor’s breach of the non-compete agreement or other contractual obligations.

Attorney’s Fees

Specify that the prevailing party in any dispute arising from the agreement shall be entitled to recover its reasonable attorney’s fees and costs.

Governing Law and Dispute Resolution

Choose the governing law that will apply to the agreement and specify the dispute resolution mechanism, such as arbitration or litigation.

Severability

Include a severability clause to ensure that if any provision of the agreement is found to be invalid or unenforceable, the remaining provisions will remain in full force and effect.

Entire Agreement

State that the agreement constitutes the entire understanding between the parties and supersedes all prior or contemporaneous communications, representations, or agreements, whether oral or written.

Execution

Require both parties to sign and date the agreement to indicate their mutual consent and acceptance of its terms.

Conclusion

A well-crafted subcontractor non-compete agreement is essential for protecting a company’s intellectual property and business interests. By carefully considering the elements outlined in this guide, you can create a legally sound and enforceable agreement that fosters a mutually beneficial relationship between the company and the subcontractor.