Make a New Mexico Non-Compete Agreement

Applicable State Laws - NM Stat § 24-1I-1 through 24-1I-5 

Beginning in July 2015, New Mexico law dictates that no health care practitioner may enter a non-compete agreement that restricts them from providing health care services within the state unless they are a shareholder, owner, partner, or director of a healthcare practice. Healthcare practitioners include:

• Dentists
• Physicians
• Osteopathic Physicians
• Certified Registered Nurses
• Certified Nurse Practitioners
• Certified Nurse-Midwives
• Anesthetists
• Podiatrists

Additionally, choice of law provisions may not be used to circumvent the restrictions on these professions.

The former employer may not write a non-compete that is overbroad. It may not create an undue hardship on the former employee, especially if the benefits to the former employer are relatively small.

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

How to Write a New Mexico Non-Compete Agreement

To write a New Mexico non-compete agreement, review the restrictions on non-compete agreements in New Mexico as well as the requirement to keep the scope of the document reasonable in nature. Include the following clauses:

• Purpose. This clause explains the purpose of the agreement: to protect the employer's legitimate business interests. It also identifies the parties and their roles and includes the effective date of the contract. This clause may also state that the terms "confidential information" and "proprietary information" may be used interchangeably.
• Non-compete. This clause explains the various restrictions of the agreement: the restriction on time, geographic scope, general and specific business practices, working for a general and specific competitor, and non-solicitation of customers, clients, and employees.
• Time period. This clause may restate the restriction on time. It explains when the time period begins, either when the employment relationship begins or when it terminates.
• Purchase option. This clause explains whether your business allows the other party to make a specific payment to exit the contract before the time period expires. If so, the amount of the payment is documented in this clause.
• Jurisdiction. This clause states that New Mexico laws are used to govern this agreement as well as any disputes that arise from it.
• Confidential information. This clause states that "confidential information" as used in the agreement refers to any and all technical and non-technical information provided by your business includes, and is not limited to, any data or other proprietary information regarding your products, inventions, plans, methods, processes, developmental or 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 any of your clients, customers, or consultants that may be provided to the other party under the terms of the non-compete agreement.
• Permitted disclosure. This clause explains what actions are permitted for the disclosure of information that is generally considered confidential. Examples include information released through no fault of the other party, information discovered by the other party without a breach of a third-party, and when your business has provided written consent for the release of specific information.
• Confidentiality. This clause states the other party understands the information they may access is confidential and they agree they will not directly or indirectly disclose it to another party without the written consent of your business. It also states that they will not use the information for any reason other than to further your business unless they first receive written permission from your business.
• Consultants and employees bound. This clause states that both consultants and employees are bound to keep the information they have access to in the strictest of confidence. It also states that both are on a need-to-know basis.
• Return of materials. This clause states that either when the non-compete agreement terminates or when requested by your business, the other party must promptly return all documents and any other tangible material that represents the confidential information of the business as well as any existing copies. The clause also states that your business will notify the other party if there is an unauthorized disclosure of confidential information.
• Remedies. This clause explains the legal remedies your business is entitled to pursue according to New Mexico law in the event the other party does not uphold their obligations as stated in the non-compete agreement. Examples include the recovery of court costs and reasonable attorney fees, the award of a New Mexico court of a temporary restraining order or a preliminary injunction against the unauthorized use of confidential information, as well as all other legal remedies as provided by state law or as a matter of equity.
• Choice of law. Remember that in certain professions, a choice of law provision may not be used. This clause states that the parties agree to choose New Mexico law to govern the agreement.
• Entire agreement. This last clause of the non-compete agreement state that the entire agreement may be amended in writing if the parties sign the amendment.

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