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Non Compete Sales Agreement Template for United States

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Key Requirements PROMPT example:

Non Compete Sales Agreement

"I need a Non Compete Sales Agreement for our new Senior Sales Director who will have access to our entire East Coast customer database and pricing strategies, with a restriction period of 18 months and covering the states of New York, New Jersey, and Connecticut."

Document background
The Non Compete Sales Agreement serves as a crucial tool for businesses operating in the United States to protect their customer relationships, trade secrets, and competitive advantage in the marketplace. This document is particularly relevant when sales professionals have access to sensitive customer information, pricing strategies, and proprietary sales methodologies. While enforcement varies by state jurisdiction, with some states imposing strict limitations or prohibitions, these agreements typically define specific temporal and geographical restrictions, scope of prohibited activities, and consideration provided in exchange for the non-compete obligation. The agreement must balance the employer's legitimate business interests with reasonable restrictions that don't unduly burden the employee's ability to earn a living.
Suggested Sections

1. Parties: Identification of all parties to the agreement

2. Background: Context and purpose of the agreement

3. Definitions: Key terms used throughout the agreement

4. Scope of Restrictions: Specific activities prohibited and geographical limitations

5. Duration: Time period for which restrictions apply

6. Consideration: Value provided in exchange for non-compete obligations

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

8. Enforcement and Remedies: Legal mechanisms for enforcing the agreement and available remedies for breach

9. Governing Law: Specification of applicable state law and jurisdiction

10. General Provisions: Standard boilerplate clauses including severability, entire agreement, and amendments

Optional Sections

1. Garden Leave: Provisions for paid leave during restriction period, typically used for senior executives

2. Non-Solicitation: Additional restrictions on soliciting customers or employees

3. Training Compensation: Provisions regarding specialized training costs and repayment obligations

4. Return of Property: Requirements for returning company property and materials upon termination

Suggested Schedules

1. Territory Schedule: Detailed definition of restricted geographical areas

2. Compensation Schedule: Details of consideration provided including any ongoing payments

3. Protected Customers List: List of customers covered by non-solicitation provisions

4. Confidential Information Schedule: Detailed description of protected information and trade secrets

Authors

Alex Denne

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

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Industries

State-Specific Non-Compete Laws: Non-compete laws vary significantly by state. Some states like California largely prohibit non-competes, while others have specific duration and geographic restrictions. Recent reforms in states like Illinois and Washington have further limited non-compete agreements.

Federal Trade Regulations: Key federal considerations including the FTC's proposed rule to ban non-competes, Sherman Antitrust Act compliance, federal anti-trust regulations, and Biden Administration's Executive Order on promoting competition.

Employment Law Framework: Compliance with Fair Labor Standards Act (FLSA), state employment laws, at-will employment doctrine, and proper worker classification between employees and independent contractors.

Trade Secret Protection Laws: Incorporation of Defend Trade Secrets Act (DTSA), Uniform Trade Secrets Act (UTSA), and appropriate confidentiality provisions to protect business interests.

Contract Law Fundamentals: Essential contract law principles including consideration requirements, reasonableness standards, enforcement mechanisms, and the blue pencil doctrine for potential court modifications.

Constitutional Considerations: Adherence to constitutional principles including right to work, interstate commerce considerations, and public policy concerns that may affect enforcement.

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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