Make a Kentucky Non-Compete Agreement

Applicable State Laws - None 

There are no specific laws that enforce or restrict non-compete agreements; however, Kentucky will uphold and enforce a non-compete as long as it is reasonable in time, scope, and geographic restriction. Kentucky courts generally interpret non-compete agreements in favor of former employees. The Kentucky Supreme Court held in Charles T. Creech, Inc. v. Brown that continued employment is not adequate consideration. Kentucky courts require that these agreements be reasonable in the period of time and in the geographic area limitation.

Protect your Kentucky business by also using a Kentucky non-disclosure agreement form. Download a Kentucky non-disclosure agreement form now!

How to Write a Kentucky Non-Compete Agreement

 To write a Kentucky non-compete agreement, include the following clauses:

• Purpose. This clause explains the purpose of the agreement: to protect the confidential information of your business. It also identifies the parties and their roles as well as provides an effective date. It may also explain that confidential information may be referred to as "proprietary information."
• Non-compete. This clause includes the restriction on the period of time, geographic area, business practices, solicitation of clients and customers, working for general or specific competitors, general or specific business activities, and forbids employee solicitation.
• Time period. This clause may restate the restriction on the period of time. It also explains when that time period begins: either at the beginning of the employment relationship or when the relationship terminates.
• Purchase option. This clause explains whether your business allows the signing party to buy out the contract. If allowed, the clause provides the specific payment amount.
• Jurisdiction. This clause states that Kentucky laws govern the agreement.
• Confidential information. This clause states the term "confidential information" as used throughout the agreement refers to any and all technical and non-technical information provided by your business that includes, and is not limited to, any data or other proprietary information related to products, inventions, plans, methods, processes, developmental products, experimental products, intellectual property, software, databases, customer lists, vendor lists, supplier lists, marketing methods reports, business plans, financial information, or other information regarding your business or your customers, clients, consultants, or licensees that is disclosed to the recipient under the terms of the agreement.
• Permitted disclosures. This clause explains when confidential information may no longer be considered confidential. This generally occurs when information is made public through no fault of the signing party, when the signing party discovers information on their own without a breach made by another party, or when your business provides written consent to release specific information to the public.
• Confidentiality. This clause states that the signing party acknowledges that the information they may access is confidential and that they agree they will not directly or indirectly disclose it to another party without first obtaining the written consent of your business. They also agree they will not use the information for any purpose other than to further the business without first obtaining the written consent of your business.
• Consultants and employees bound. This clause states that the agreement binds both consultants and employees, that they must keep the information in the strictest of confidence, and that they are on a need-to-know basis.
• Return of materials. This clause states that when the non-compete is terminated or when requested by the business, the signing party must immediately return all documents and other tangible material that represents the confidential information of the business as well as any copies that exist. It also states that the business will notify the signing party upon discovering any loss or unauthorized disclosure of information.
• Remedies. This clause explains the remedies your business is entitled to pursue under Kentucky law if the former employee violates the non-compete agreement. Examples may include the recovery of court costs and reasonable attorney fees, the award by a Kentucky court of a temporary restraining order or preliminary injunction against the unauthorized use of the information, etc., as well as all other remedies available under Kentucky law or available as a matter of equity.
• Choice of law. This clause states that the parties agree that the laws of Kentucky will govern the agreement.
• Entire agreement. This final clause states that the entire agreement may be amended if done so in writing. It also states that both parties must sign the amendment.

The parties must sign and print their names. The signatures must be dated. Each party should receive a copy of the executed document for their records.