Non Compete Agreement Between Business Partners Template for United States

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Key Requirements PROMPT example:

Non Compete Agreement Between Business Partners

"I need a Non Compete Agreement Between Business Partners for my tech consulting firm in Texas, as one of our founding partners is leaving in March 2025 and we need to protect our client relationships and proprietary methodologies for at least two years after their departure."

Document background
The Non Compete Agreement Between Business Partners is essential when establishing or modifying business partnerships in the United States, particularly when partners have access to sensitive information or significant client relationships. This document protects the business's legitimate interests by preventing partners from competing directly after leaving the partnership. It must be carefully drafted to comply with state-specific requirements, as enforceability varies significantly across jurisdictions. The agreement typically includes specific provisions about duration, geographic scope, and prohibited activities, while ensuring reasonable restrictions that courts will uphold.
Suggested Sections

1. Parties: Identification of all business partners entering into the agreement

2. Background: Context of the business relationship and reason for the non-compete agreement

3. Definitions: Key terms used throughout the agreement

4. Scope of Non-Compete: Specific restrictions on competitive activities

5. Duration: Time period for which the non-compete obligations apply

6. Geographic Area: Territorial scope of the restrictions

7. Consideration: Value exchanged for the non-compete obligations

8. Enforcement: Remedies and procedures for breach of agreement

Optional Sections

1. Non-Solicitation: Additional provisions restricting the solicitation of employees or customers

2. Confidentiality: Provisions for protecting confidential information when a separate confidentiality agreement doesn't exist

3. Assignment Rights: Provisions governing the transfer of agreement obligations, particularly relevant when future business transfers are anticipated

Suggested Schedules

1. Schedule A - Restricted Business Activities: Detailed list of prohibited competitive activities

2. Schedule B - Geographic Territory: Detailed description or map of restricted geographic area

3. Schedule C - Consideration Details: Specific terms of compensation or other consideration

Authors

Alex Denne

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

Industries

State-Specific Laws: Different states have varying regulations on non-compete agreements. Some states like California largely prohibit them, while others have specific requirements for enforcement. State-by-state analysis is crucial for compliance.

Federal Antitrust Laws: Key federal regulations including Sherman Antitrust Act, Federal Trade Commission Act, and Clayton Act must be considered to ensure the agreement doesn't create unfair market restrictions.

Common Law Requirements: The agreement must meet common law standards of being reasonable in scope, duration, and geographic area, while protecting legitimate business interests.

Business Partnership Considerations: Must account for fiduciary duties between partners, existing partnership agreement provisions, state partnership laws, and regulations specific to the business entity type (LLC, Corporation, Partnership).

State Contract Law: Basic contract formation requirements, consideration requirements, and enforceability standards as per state-specific contract laws must be addressed.

Trade Secret Laws: Federal Defend Trade Secrets Act and state-specific trade secret protections need to be incorporated to protect proprietary information.

Recent Legal Developments: Must consider Biden Administration's Executive Order on promoting competition, state-specific legislative changes, and recent court decisions affecting non-compete 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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