Employment, Non-Disparagement, Confidentiality & Non-Competition Agreement
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This Employment Contract contains a non-disparagement provision that bars an employee from making negative statements about the employer. Businesses can include such language in employment contracts where the parties want to maintain a positive relationship or avoid negative publicity. A non-disparagement clause in an employment contract can help to protect the business's reputation. Such a clause can be essential for businesses or individuals who rely on their reputation for success. A non-disparagement clause can also help an employer avoid costly and protracted legal disputes by establishing clear terms for how the parties will communicate with each other and the public.
This contract is valid in all U.S. states and territories except Montana, Puerto Rico, and the U.S. Virgin Islands. It fully adheres to a bevy of new state laws borne out of the #MeToo movement, including those prohibiting nondisclosure provisions for sexual harassment claims or any other unlawful or potentially unlawful conduct. Further, it provides exceptions for whistleblowers and protects rights afforded under Section 7 of the National Labor Relations Act, both of which are subjects that have come under considerable scrutiny in employment contracts in recent years. To the extent permitted under law, this contract is drafted in favor of the employer. Finally, please note that this contract contains integrated bracketed notes that offer helpful drafting suggestions, and, when using our document, one should delete these bracketed notes when preparing this contract.
The highlights of the major features of this contract are as follows:
(1) an at-will employment clause, providing that the employer or the employee may terminate the relationship at any time, with or without notice or cause, without incurring legal liability;
(2) a non-disparagement covenant, including a liquidated damages clause (a pre-defined monetary sum), prohibiting an employee from making negative statements about the employer, including its products and services, following voluntary or involuntary termination; this provision is intended to help provide the employer with some degree of protection from a terminated employee who might otherwise be tempted to post negative or defamatory statements about the employer online, including on social media and employer review sites such as Glassdoor, Indeed, Google Reviews, and Yelp;
(3) a confidentiality agreement regarding proprietary information, including trade secrets;
(4) a non-competition agreement that prohibits an employee from working for or becoming involved with a competitive enterprise within 12 months of termination (please note the two bracketed deletion instructions in section 13 for California, which prohibits such restrictions); and
(5) a sick leave and earned vacation days policy, including an option specifying whether the accrued time carries over to the next year, expires, or is paid out at the end of the fiscal year
Employment Agreement, between __________________________ (the "Company") and ______________________________ (the "Employee").
1. For good consideration, the Company employs the Employee on the following terms and conditions.
2. Term of Employment. Subject to the provisions for termination set forth below this agreement will begin on ______________, 20____, unless sooner terminated.
3. Salary. The Company shall pay Employee a salary of $_____________ per year, for the services of the Employee, payable at regular payroll periods.
4. Duties and Position. The Company hires the Employee in the capacity of ________________________ [insert job title]. The Employee's duties may be reasonably modified at the Company's discretion from time to time.
5. Employee to Devote Full Time to Company. The Employee will devote full time, attention, and energies to the business of the Company, and, during this employment, will not engage in any other business activity, regardless of whether such activity is pursued for profit, gain, or other pecuniary advantage. Employee is not prohibited from making personal investments in any other businesses provided those investments do not require active involvement in the operation of said companies.
6. Confidential and Proprietary Information. Employee agrees, while employed by the Company and at all times thereafter (regardless of the reason for termination), as follows:
(a) Confidential Information and Inventions Agreement. Not in limitation of the provisions of any other Confidentiality Agreement that the Employee may have previously executed with Company, in furtherance, the Employee shall take all steps reasonably necessary to hold the Company’s proprietary information in trust and confidence, will not use proprietary information in any manner or for any purpose except in connection with the performance of the Employee’s services to the Company, and will not (other than in the performance of the services to the Company as herein contemplated) disclose any such proprietary information to any third party without first obtaining the Company’s express written consent on a case-by-case basis.
(b) Third Party Information. Third parties have provided the Company with confidential or proprietary information and may do so in the future. The Company has a duty to safeguard the confidentiality of such information and use it only for authorized purposes. Employee agrees to use such information only in a manner consistent with the Company’s duties and the Employee’s authorized scope of responsibility, to hold such information in strict confidence, and not to disclose the information to anyone (other than authorized personnel within the Company), unless authorized in writing by an officer of the Company.
(d) Exceptions. Employee will hold the terms of this Agreement in strict confidence, subject to the following exceptions: (i) Employee may disclose this Agreement to his or her immediate family, attorney, accountant, auditor, tax preparer, and financial advisor, provided that such disclosure is made in confidence; and (ii) Employee may disclose this Agreement to the extent that a disclosure may be required by law. Nothing in this Agreement shall deny or limit the Employee’s right to discuss the terms and conditions of his or her employment with the Equal Employment Opportunity Commission; the United States Department of Labor; the National Labor Relations Board; or any federal, state, or local government agency or entity to the extent expressly permitted by Section 7 of the National Labor Relations Act.
7. Non-Disparagement. Employee agrees, while employed by the Company and at all times thereafter (regardless of the reason for termination), as follows:
(a) Agreement Not to Disparage. Except as it may be required by law or legal process, Employee agrees not to disparage the Company or any of its officers, directors, shareholders, investors, potential investors, partners, predecessors, subsidiaries, employees, consultants, attorneys, or any others associated with the Company, by any means including but not limited to (i) postings to blogs, social media, industry websites, employer review websites (for example, Glassdoor or Indeed), consumer review websites (for example, Google Reviews or Yelp); or (ii) communications with accountants, investment bankers, commercial bankers, insurance brokers or carriers, media, journalists, reporters, equity analysts, investors, potential investors, customers, suppliers, competitors, joint venture partners and regulators (including but not limited to the Securities and Exchange Commission or the United States Department of Commerce).
(b) Definition of “Disparage.” For purposes of this Agreement, “disparage” shall mean any negative statement, whether written or oral, about ________________________________ [insert the full list of people, companies, products, etc. that are reasonably associated with the Employee’s scope of work].
(c) Exclusions, Rights, and Legal Obligations. Nothing contained in this Agreement is intended to or shall limit Employee’s ability or right: (i) to respond to a lawful subpoena; (ii) to disclose information about unlawful acts in the workplace, including, but not limited to, sexual harassment or any other unlawful or potentially unlawful conduct; (iii) to discuss with others the terms and conditions of the Employee’s employment to the extent expressly permitted by Section 7 of the National Labor Relations Act; (iv) to file a charge or complaint with the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, the Securities and Exchange Commission or any other federal, state or local governmental agency or commission (“Government Agencies”); (v) to communicate voluntarily with any Government Agencies or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including providing documents or other information, without notice to the Company; (vi) to receive an award for information provided to any Government Agencies; or (vii) to comply with any other legal obligation.
(d) Liquidated Damages. The parties agree that if a breach were to occur, it would be difficult to determine actual damages. Based on what is presently known, the Company and the Employee agree that $________________ [insert exact figure of the amount of liquidated damages; this figure must be a reasonably calculated estimate; a court will strike this provision if the amount is deemed clearly disproportionate to the anticipated loss in the event of a breach] is a reasonable estimate of the damages that would accrue if a breach occurred in the future. This amount of liquidated damages is fair and reasonable and would not act as a penalty to the breaching party.
(e) Material Term. This non-disparagement provision is a material term of this Agreement, the absence of which would have resulted in the Company’s refusal to enter into this Agreement.
8. Reimbursement of Expenses. The Employee may incur reasonable expenses for furthering the Company’s business, including expenses for entertainment, travel, and similar items. The Company shall reimburse Employee for all business expenses after the Employee presents an itemized account of expenditures, pursuant to Company policy.
9. Vacation; Sick Leave. The Employee shall be entitled to _____ [insert number of allotted annual vacation days, for example, 3, 5, 7, or 10] vacation days off at full pay, accrued on a calendar-year daily basis. For illustration purposes only, the following chart shows how various allotments of vacation days accrue:
|Allotted Days||Yearly Accrual (Hours)||Monthly Accrual (Hours)||Daily Accrual (Hours)|
The Employee shall further be entitled to _____ [insert number of allotted annual sick leave hours, for example, 24 or 40] hours of annual sick leave, without a reduction in compensation.
Unused vacation days and sick leave hours remaining at the end of Company’s fiscal year will: [select desired option:] ___ be paid (vacation days only), ___ be forfeited, or ___ be carried over into subsequent fiscal years but shall be capped at 1.5 times the yearly accrual. Vacation days may not accrue in excess of the maximum accrual cap. Once the Employee's unused and accrued vacation reaches the maximum cap, the Employee will not become eligible for any additional time except to the extent that the prior vacation time has been used.
10. Disability. In the event that the Employee cannot perform the duties because of illness or incapacity beyond the Employee’s allotted annual sick leave, the compensation otherwise due during said illness or incapacity will be reduced by ______ percent. The Employee’s full compensation will be reinstated upon return to work. However, if the Employee is absent from work for any reason for a continuous period of more than ______________ [insert number of weeks or months], the Company may terminate the Employee, and the Company's obligations under this agreement will cease on that date.
11. Termination of Agreement; At-Will Relationship. The Employee's relationship with the Company is and shall continue to be at-will, meaning that either the Company or the Employee may terminate the relationship at any time for any reason or no reason, with or without notice.
12. Death Benefit. Should Employee die while employed by the Company, the Company shall pay to Employee’s estate any compensation due through the end of the current pay period in which death occurred.
13. Non-Competition. Employee agrees that while employed by the Company, and for a period of twelve consecutive months following the conclusion of Employee’s employment for any reason, [deletion note: if using this contract in California, delete the foregoing language in this sentence: "and for a period of twelve consecutive months following the conclusion of Employee’s employment for any reason,"] Employee will not, directly or indirectly, individually or through an entity, as an owner, part owner, partner, employee, agent or otherwise:
(a) provide to a Competitive Enterprise the same or similar services that Employee performed during his/her employment with the Company. A "Competitive Enterprise" means (i) any business that provides ____________________________ [insert a brief descriptor of the main category of the Company’s products or services, e.g., "accounting software solutions"], (ii) any business that provides services or engages in any other business activities similar to any of those provided or engaged in by the Company now or in the future, (iii) [insert the specific names of the Company's most significant competitors with whom Employee might otherwise be tempted to seek employment or be recruited]; or
(b) Sell, attempt to sell, or directly or indirectly assist in the effort of anyone else who sells or attempts to sell, any products or services that are competitive with any products or services offered by the Company and for which Employee gained knowledge of during Employee’s employment by the Company; or
(c) Act in any capacity for another entity or engage in any conduct if in such capacity or due to such conduct Employee would inevitably use and/or disclose any of Company’s trade secrets or confidential information; or
(d) Interfere with, disrupt or attempt to interfere with or disrupt relations between the Company and any of its customers, employees, consultants, suppliers or vendors; or
(e) Own more than 5% of a Competitive Enterprise.
Because of the _______________ [characterize the geographic scope of the Company’s market, e.g., "local", "regional", "state-wide", or "global"] nature of the Company’s business, it is agreed that the restrictions set forth above shall apply in _______________ [depending on the previous geographic characterization, insert the name of the relevant city or state] and geographic regions that Employee worked in and was responsible for while employed by the Company, and any other geographic area (country, province, state, city or other political subdivision) in which the Company is engaged in, or was developing plans to engage in, business or is otherwise selling products or services at the time Employee ceased working. [deletion note: if using this contract in California, delete this final paragraph, as California does not permit non-competition agreements AFTER the employee has ceased working for the company]
14. Assistance in Litigation. Employee shall upon reasonable notice, furnish such information and proper assistance to the Company as it may reasonably require in connection with any litigation in which it is, or may become, a party either during or after employment.
15. Effect of Prior Agreements. This Agreement supersedes any prior agreement between the Company or any predecessor of the Company and the Employee, except that this agreement shall not affect or operate to reduce any benefit or compensation inuring to the Employee of a kind elsewhere provided and not expressly provided in this agreement.
16. Arbitration and Jurisdiction. Subject to the exceptions set forth below, the Company and the Employee agree:
(a) Agreement to Arbitrate. Any controversy or claim arising out of or relating to this Agreement shall be settled by arbitration administered by the American Arbitration Association under its Employment Arbitration Rules and Mediation Procedures, and judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. Any arbitration shall occur in ________________________ [insert city, state of desired site for the arbitration].
(b) Excludable Claims. Any claim seeking injunctive relief pursuant to paragraphs 6, 7, and 13 may be adjudicated in a state or federal court located in ________________________ [insert city, state of desired site for court proceedings].
(c) Governing Law, Jurisdiction, and Venue. The terms of this Agreement and the resolution of any disputes as to the meaning, effect, performance or validity of this Agreement or arising out of, related to, or in any way connected with, this Agreement, the Employee’s employment with the Company or any other relationship between the Employee and the Company will be governed by the laws of the State of ________________________ [insert the name of the state in which the Company is based, or other desired state], excluding laws relating to conflicts or choice of law. In any action between the parties arising out of or relating to any such disputes, each of the parties irrevocably and unconditionally consents and submits to the exclusive jurisdiction and venue of the state and federal courts located in the State of ________________________ [insert the name of the state in which the Company is based, or other desired state].
(b) Exceptions. This Agreement shall not prohibit the Employee from pursuing an administrative claim with a local, state, or federal administrative body such the Equal Employment Opportunity Commission, the National Labor Relations Board, or any government agency or entity responsible for claims related to unemployment benefits.
17. Limited Effect of Waiver by Company. Should Company waive breach of any provision of this agreement by the Employee, that waiver will not operate or be construed as a waiver of further breach by the Employee.
18. Severability. The finding by an arbitrator or a court of competent jurisdiction of the unenforceability, invalidity or illegality of any provision of this Agreement shall not render any other provision of this Agreement unenforceable, invalid or illegal. Such arbitrator or court shall have the authority to modify or replace the invalid or unenforceable term or provision with a valid and enforceable term or provision which most accurately represents the parties’ intention with respect to the invalid or unenforceable term or provision. If moreover, any one or more of the provisions contained in this Agreement will for any reason be held to be excessively broad as to duration, geographic scope, activity or subject, it will be construed by limiting and reducing it, so as to be enforceable to the extent compatible with the applicable law as it will then appear.
19. Assumption of Agreement by Company's Successors and Assignees. The Company's rights and obligations under this agreement will inure to the benefit and be binding upon the Company’s successors and assignees.
20. Oral Modifications Not Binding. This instrument is the entire agreement of the Company and the Employee. Oral changes have no effect. It may be altered only by a written agreement signed by the party against whom enforcement of any waiver, change, modification, extension, or discharge is sought.
Signed this _____ day of _____________________ 20_____.
Company Representative’s Signature
Other Forms You May Need
- Application for Employment
- Employee Non-Compete Agreement
- Employee Non-Disclosure Agreement
- Employee Separation & Non-Disparagement Agreement (Glassdoor Revision)
- Independent Contractor Agreement
- Interview Non-Disclosure Agreement (NDA)
Instant Download - Only $9.99
- Professional MS Word & PDF formatting
- Fully editable & reusable
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