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What Is a South Carolina Non-Compete Agreement?

In South Carolina, a non-compete agreement is a type of employment agreement utilizing restrictive covenants that businesses use to protect their trade secrets, business practices, and other legitimate business interests from competing businesses by restricting the actions of their former employees. Companies do this by having an employee or independent contractor sign a written promise that they will not engage in competitive behavior such as working for a competitor or procuring similar employment within a certain geographic area. Although such agreements between an employer and an employee may be legally binding, the state of South Carolina does not have any specific laws that enforce these agreements.

Non-competition agreements can be their own contracts or employment contracts can have non-compete clauses within them. Generally, a non-compete agreement is used along with a non-disclosure agreement (also known as a confidentiality agreement) and a non-solicitation agreement to better protect an employer's interests as part of the employment relationship.

However, before business owners draft a non-compete agreement, they should seek legal advice from a law firm that practices employment law. An employment law attorney can advise the business owner on whether the document truly protects the legitimate interests of the employer or if there are any legal issues with the contract that should be corrected to prevent any issues with enforceability in the event a lawsuit must be filed in the South Carolina courts. South Carolina law, when it comes to non-competes, has a very sound public policy record. It is always best to have a non-compete agreement reviewed before using it.

Hiring an independent contractor to work for your South Carolina business? Download an independent contractor agreement form now!

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Sample South Carolina Non-Compete Agreement

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Non-Disclosure Agreement › Business Plan › Employment Contract ›

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Applicable State Laws - None

Although non-compete agreements are generally disfavored in South Carolina but will be upheld as long as the following conditions are met:

  • The agreement is absolutely necessary to protect the employer's trade secrets or business practices.
  • The agreement is reasonable both in time and geographic restriction
  • The non-compete does not impose greater restrictions than necessary on the employee's ability to earn a living
  • The contract is supported by valuable consideration and does not violate any public policy

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

How to Write a South Carolina Non-Compete Agreement

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

  • Purpose. This clause explains the purpose of the non-compete agreement: to protect the legitimate business interests of the employer. It also identifies the parties and their roles as well as provides the effective date of the contract.
  • Non-compete. This clause provides information on the restrictions the employee must adhere to in order to fulfill the agreement. This is generally restrictions on time, geographic area, general and specific business practices, working for general or specific competitors, and 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 the employer will allow the employee to buy out the contract. If so, the amount the employee must pay is listed in this clause.
  • Jurisdiction. This clause states that South Carolina laws will be used to govern the agreement.
  • Confidential information. This clause defines confidential information as any and all technical or non-technical information provided by the employer 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 about your business or any of your clients, customers, or consultants that is or may be disclosed to the employee under the terms of this contract.
  • Permitted disclosure. This clause explains when confidential information may be disclosed without it being considered a violation of this agreement. Generally, this occurs when the employer provides written consent for the release of specific information, when the employee discovers certain information on their own without a breach by another party, or when information is released without any fault of the employee.
  • Confidentiality. This clause states that the employee understands that the information the employee may access is confidential. They agree they will not directly or indirectly disclose the information to another party without first receiving written consent from the employer. They also agree to only use the information for the purposes of furthering the business unless they receive written consent from the employer.
  • Consultants and employees bound. This clause states that both consultants and employees are bound by the non-compete agreement to keep the information under the strictest of confidence. It also states that they are on a need-to-know basis for accessing the information.
  • Return of materials. This clause states that when the relationship between the parties ends or when requested by the employer, the employee is required to promptly return all documents and other tangible material that represents confidential information belonging to the business and any copies that exist. The employer will also notify the employee if there is a loss of confidential information.
  • Remedies. This clause explains the legal remedies the employer is entitled to pursue if the employee does not honor their obligations. Examples include the recovery of court costs and reasonable attorney fees, the award by a South Carolina court of a temporary restraining order or a preliminary injunction against the unauthorized use, as well as any other remedies available under South Carolina law or as a matter of equity.
  • Entire agreement. This final clause of the non-compete agreement states that the entire agreement may be amended in writing if the parties both sign the amendment.

Both the employer and the employee should sign and print their name. The signatures should be dated. Each should keep a copy of the agreement for their records.

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