Employment contracts contain non-compete clause which prohibit employees who leave an organization from working with an employer in the “similar line of trade or business for a specific period of time” (Mathis and Jackson, 2011). The non-compete agreement may be presented as a separate contract or a clause in the contract that is primarily being used for newly hired employees. There had been several court decisions which have ruled against employers who terminated employees for the refusal of such employees to sign the non-compete agreement. Creating a non-compete agreement will require that the contract shall have a geographical and time limitations, should be limited only to similar job positions and require customer confidentiality (Mathis and Jackson, 2010). Aside from this, a non-solicitation of current employees should also be included in the employment contract to prevent a former employee to encourage co-workers from the past employer to join a new company, which usually happens to be a competitor.
THIS AGREEMENT made this 30th day of September, 2013, between Coffee Magic, Inc., a Company incorporated pursuant to laws of the state of California referred to as the“Employer”, and Miss Shanika Brown with residence address at 3423 Prince Condominium, Vallejo, California, herein referred to as the “Employee”.
WHEREAS, the Employer wants to avail of the services of the Employee, and the Employee desires to render such services based on the terms and conditions of this Agreement.
In consideration explained under Section 1 below, both the parties have agreed under the following terms and conditions:
In consideration of the Employee’s execution of this Agreement, the Employee shall hold the position of “Store Manager” as an at-will employee of Coffee Magic, Inc. and shall receive payment of salaries and wages in the future and other employment benefits, which shall be paid during the period of your employment as part of the condition of this Agreement. The Employee is required to acknowledge the receipt and sufficiency of such consideration.
2.) CONFIDENTIAL INFORMATION.
a.) Confidential Information shall refer to the information about the Company and its
existing Clients, Prospects, and Vendors that is not generally known outside of the Company, which the Employee will learn of in relation to Miss Brown’s employment with the Company.
b.) The Employee shall be prohibited to disclose any Confidential Information about the Company to her future employer, attorney, spouse, or professional tax advisor which is considered as a violation of this Agreement;
c.) The employee is prohibited to disclose the business policies, finances, and business plans, financial projections, annual sales forecasts and targets, computation of the market share of Customers and Prospects; customized software, marketing tools, and supplies that the Employee will be provided access to by the Company.
d.) The Employee shall be prohibited to disclose any trade secrets and proprietary rights owned by the Coffee Magic, Inc. which she learned during her training as part of her employment. These proprietary rights refer to any form of discovery, invention, method/process, composition, development, work/composition, and customer/supplier lists owned by the Company.
3.) DUTY OF CONFIDENTIALITY
The Employee agrees that during the period of employment with the Coffee Magic, Inc. and for a period of two (2) years after her separation or termination from employment, she will not directly or indirectly divulge or make use of any Confidential Information outside of her employment with the Coffee Magic, Inc., without the prior written consent of the Company. She is prohibited to directly or indirectly misappropriate, divulge, or make use of trade secrets she learned during her training with the Company, within the Territory (California) and for a period of two years after her separation from the Company.
Miss Brown hereby agrees that during the term of her employment with the Coffee Magic, Inc. and for twenty four (24) months after the termination thereof, regardless of the reason for the termination of her employment, she will not, directly or indirectly perform the similar or substantially equal responsibilities/duties contained in this Agreement.
5.) NON-SOLICITATION OF CURRENT EMPLOYEES/VENDORS AND PROSPECTS
The Employee agrees that during the term of her employment with Coffee Magic, Inc. and for twenty four (24) months after the termination thereof, Miss Brown will not, directly or indirectly, solicit or attempt to implore/solicit any business from Coffee Magic, Inc.’s Employees, Vendors or Prospects, with whom she had material contact during her employment with the Company.
This agreement contains the entire agreement between the parties that pertains to the employment of the Miss Brown and shall be amended or modified only by written instrument signed by both of the Employer and the Employee.
IN WITNESS WHEREOF, the Coffee Magic, Inc. has caused this agreement to be executed by its President and the Miss Brown has set her hand as of the date first above written.
Coffee Magic Inc. (Represented by its President) Miss Shanika Brown
The non-compete agreement is simply a condition of employment where in the employee will take into consideration before he or she accepts or rejects an offer. To require an employee to sign a non-compete agreement places the employee at a disadvantage since he or she is vulnerable to heavy economic pressure to sign such agreement for the purpose of keeping the job (Miller, 2011). Hence, the employers should be required to present clear evidence that the employee received good consideration in exchange of compromising his or her post-employment freedom to practice the chosen trade or occupation.
Kontrimas, A.R. and Samsa, M.K. (2006). International Expatriate Employment Handbook. The Netherlands: Kluwer Law International.
Lagesse, P. and Norrbom, M. (2006). Restrictive Covenants in Employment Contracts and Other Mechanisms for Protection of Corporate Confidential Information. The Netherlands: Kluwer Law International.
Mathis, R.L. and Jackson, J.H. (2010). Human Resource Management, 13th ed. Mason, OH: Southwestern Cengage.
Miller, R.L. (2011). Modern Principles of Business Law. Mason, OH: Cengage.