Make a North Carolina Non-Compete Agreement

Applicable State Laws - N.C. Gen. Stat. § 75-4 

North Carolina requires all non-compete agreements to be in writing. The state prohibits employers from requiring their employees to sign overly broad restrictions. This means that non-competes must not impose a greater than necessary strain on the employee once their employment comes to an end. Furthermore, non-compete agreements that cause harm to the public or go against public policy are unenforceable.

Additionally, non-compete agreements may not be enforceable against physicians who work in an area that is considered underserved. For more information about enforceable non-competes against physicians, seek legal advice.

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

How to Create a North Carolina Non-Compete Agreement

To write a North Carolina non-compete agreement, review the state's non-compete law. Include the following clauses:

• Purpose. This clause explains the reason for the non-compete agreement: to protect the company’s legitimate business interests. It also identifies the parties and the roles and provides the effective date. It may also state that the terms "confidential information" and "proprietary information" will be used interchangeably.
• Non-compete. This clause explains the restrictions to which the other party must adhere: the period of time, geographical scope, general and specific business practices, general or specific competitors, and the non-solicitation of customers, clients, and employees.
• Time period. This clause explains when the time restriction begins, either at the beginning of the employment relationship or when it terminates.
• Purchase option. This clause states whether your business will allow the other party to buy out the contract. If this is allowed, the specific amount that must be paid is listed in this clause.
• Jurisdiction. This clause states that North Carolina law will govern the non-compete agreement as well as any disputes that may arise.
• Confidential information. This clause explains that the term "confidential information" means 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 or experimental products, intellectual property, software, databases, customer lists, vendor lists, supplier lists, marketing information, reports, business plans, financial information, or other information related to your business or any of your customers, clients, or consultants that is provided to the other party under the terms of the agreement.
• Permitted disclosure. This clause explains when normally confidential information may be disclosed without being considered a violation of the agreement. Common examples include when information becomes public through no fault of the other party, when the other party discovers the information without a breach of a third-party, and when your company provides written consent to release specific information to the public.
• Confidentiality. This clause states the other party understands the information they may access is confidential in nature and that they will not directly or indirectly communicate that information to another party without receiving written consent from your business. They also agree they will not use the information for any reason except for working with your business unless they receive written consent from your business.
• Consultants and employees bound. This clause states that both consultants and employees are bound to keep the information they receive in the strictest of confidence. It also states that both are on a need-to-know basis.
• Return of materials. This clause states that upon the termination of the non-compete agreement or request of the business, the other party must return all documents and other tangible materials representing the confidential information of the business and any existing copies. It states that your business will also notify the other party of a loss of confidential information if it occurs.
• Remedies. This clause explains the remedies your business may be entitled to pursue under North Carolina law if the other party does not adhere to the terms of the agreement. Examples include the recovery of court costs and reasonable attorney fees, the award by a court of a temporary restraining order or preliminary injunction against the unauthorized use, etc., as well as all other remedies available under state law or equity.
• Choice of law. This clause states that the parties agree to choose North Carolina law as the law to govern the agreement as well as any dispute that may arise from it.
• Entire agreement. This final clause states that the parties may amend the entire agreement in writing if they both sign the written amendment.

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