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Active Non Compete Agreement Template for England and Wales

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Key Requirements PROMPT example:

Active Non Compete Agreement

"I need an Active Non-Compete Agreement for a senior software developer joining my London-based tech company in March 2025, with specific restrictions on working for competitors in the UK and EU for 12 months after employment ends."

Document background
An Active Non-Compete Agreement is essential for businesses operating in England and Wales seeking to protect their legitimate interests from competitive harm. This document is typically implemented when an employee or contractor has access to sensitive information, valuable client relationships, or trade secrets. The agreement specifies restrictions during employment and post-termination, including prohibited activities, geographic limitations, and duration. Under English law, such restrictions must be reasonable and necessary to protect legitimate business interests. The agreement must balance the employer's need for protection against the individual's right to work and public interest in free competition.
Suggested Sections

1. Parties: Identification and details of the contracting parties

2. Background: Context and purpose of the agreement

3. Definitions: Key terms used throughout the agreement including defined competitive activities, territory, and duration

4. Scope of Restrictions: Detailed description of prohibited activities, competitive restrictions, and limitations

5. Duration: Time period for which restrictions apply and conditions for extension or early termination

6. Geographic Limitations: Territorial scope of restrictions and specific regions covered

7. Consideration: Value or compensation provided in exchange for the restrictions

8. Confidentiality Obligations: Protection of confidential information and trade secrets

9. Enforcement: Remedies and procedures for breach of restrictions

Optional Sections

1. Garden Leave Provisions: Terms for paid leave during notice period, applicable when agreement is part of employment relationship

2. Carve-outs and Exceptions: Specific permitted activities and exceptions to the restrictions

3. Non-solicitation Provisions: Additional restrictions on approaching customers or employees

4. Severability: Provisions for partial enforcement if parts are found invalid

5. Assignment Rights: Terms governing transfer of rights under the agreement

Suggested Schedules

1. Schedule 1 - Restricted Customers: List of specific customers covered by restrictions

2. Schedule 2 - Restricted Territory: Detailed description and maps of geographic areas covered

3. Schedule 3 - Competitive Business Activities: Detailed definition and examples of restricted business activities

4. Schedule 4 - Confidential Information: Categories and examples of protected confidential information

5. Schedule 5 - Consideration Details: Detailed breakdown of compensation or consideration provided

Authors

Alex Denne

Head of Growth (Open Source Law) @ ¶¶Òõ¶ÌÊÓÆµ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

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Relevant Industries
Relevant Teams
Relevant Roles
Industries

Common Law Restraint of Trade Doctrine: Fundamental principle stating that contractual restrictions on trade are void unless they are reasonable in the interests of the parties, reasonable in the public interest, and designed to protect legitimate business interests

Competition Act 1998: Legislation ensuring the agreement doesn't create anti-competitive effects and must comply with Chapter I prohibition on anti-competitive agreements

Employment Rights Act 1996: Key legislation for non-compete clauses in employment relationships, establishing standards for reasonableness in employment contexts

Trade Secrets Regulations 2018: Regulations protecting confidential information and trade secrets, providing justification for certain restrictive covenants

EU Retained Law: Post-Brexit consideration of retained EU law principles affecting competition, including Article 101 TFEU principles as incorporated into UK law

Duration Requirements: Legal principle requiring reasonable and justifiable duration for non-compete clauses, typically maximum of 6-12 months as upheld by courts

Geographic Scope Limitations: Legal requirement that geographic restrictions must be reasonable and limited to areas where there's legitimate business interest

Activity Scope Restrictions: Legal principle requiring specific and not overly broad restrictions on activities, must relate to actual business interests

Consideration Requirement: Legal principle requiring adequate consideration to support the non-compete agreement, particularly crucial for post-employment restrictions

Confidentiality Provisions: Legal requirements for clear definition and reasonable scope of protected confidential information within the agreement

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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