The Non-Competition Agreement is an agreement whereby a party undertakes not to carry out activities, directly or indirectly, in competition with another party.
This document limits the activity of a natural person (e.g. worker, partner, professional) or a legal person (e.g. company). The non-competition agreement prevents competing activities either on one’s own account or through another entity. For example, this agreement prevents a person from producing the same goods or services as another, or from carrying out activities in the same market or for the same customers.
However, the agreement cannot be generic and cannot completely prevent the performance of the obliges activity. It must therefore specify the limits of activity, territory and duration of the non-compete obligation. Furthermore, in the event of non-fulfillment of the non-compete obligation, whoever violated the agreement will be required to pay a penalty established by the parties and to compensate any further damages.
When using the non-compete agreement
Our non-compete agreement distinguishes two types of non-compete on the basis of the relationship between the parties:
- non-competition agreement for employees and managers
- non-competition agreement for companies, professionals, shareholders and directors
With the non-competition agreement between employee and employer, the employee undertakes not to conduct business in competition with his employer for a period following the termination of the employment relationship. This agreement can be stipulated at any time during the employment relationship and cannot be free but must always be paid in proportion to the limitation imposed on the worker. For example, an employee who leaves an appliance company will not be able to work in the same industry for one year and will receive a percentage of his previous salary.
With the non-competition agreement between companies, it is possible to regulate relations between entrepreneurs, freelancers or sole proprietorships or between shareholders and administrators and a company. The party that undertakes non-competition is prohibited from carrying out activities in the same market or with the same customers. In this case there is no obligation to pay and it can be free.
A typical example is a company that signs a non-compete agreement with its supplier to prevent this from directly addressing its customers. Another case is that of the shareholders of a company who undertake not to collaborate with its competitors.
This document cannot be used to create a non-compete agreement with agents. In fact, in the latter case, the prohibition of competition is imposed on the agent in the context of an agency contract.
Our non-compete agreement is available in both Italian and English so that it can also be used with foreign subjects and partners.
What does the model of non-competition agreement contain?
Our non-compete agreement meets all legal requirements. The main clauses included concerns:
- Activity limits: the prohibited activity must be precisely described to determine the “limits” of non-competition;
- Duration: it cannot be more than 3 years for office workers, workers and managers, and 5 years for managers, companies, professionals and partners;
- Territory: the territory where the competing activity cannot be carried out must be precisely defined (e.g. Italy, Europe, etc.);
- Penalty: in the event of non-compliance with the non-compete obligation, a sum of money will be established that the obligor will have to pay;
- Salary (only in the agreement between worker and employer): must be proportional to the size of the territory, to the object and to the duration. The broader the ban, the greater the consideration, which is generally measured as a percentage of the last salary.
- English language: if the counterpart is foreign, it may be convenient to write the document in English to simplify bargaining.
Furthermore, after the purchase, we will guide you step by step through all the subsequent formalities necessary for your document to be valid and effective.
All employer and employee data are required to complete the document.
The document can be modified free of charge in all its parts without time limits. Don’t worry so if you don’t have all the information available during the interview, you can always enter it later.
- Contract or Non-Competition Agreement
- Non-Competition Clause
- Non-Competition Agreement, or simply Non-Compete
- Non-Competition between Companies or Companies
- Non-Competition between Professionals and Self-Employed Workers
- Non-Competition between Members and Company
- Non-Competition for Employees and Executives
Other useful templates and facsimiles
- Letter of Intent: to define the current status of negotiation and regulate its continuation
- Non-Disclosure Agreement: to protect you if you have to share confidential information
- Freelance contract: to commission the creation of a work to a professional with a VAT number or withholding tax
- Employment Contract for Employees: to hire an employee, a worker or a manager
- Executives Employment Agreement: to hire a manager or executive