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3 Year Non Compete Agreement Template for Indonesia

A comprehensive non-compete agreement governed by Indonesian law, designed to protect business interests by restricting an employee's ability to engage in competitive activities for a period of three years post-employment. The agreement complies with Indonesian Civil Code and Labor Law requirements, including consideration of constitutional rights to work and fair competition principles. It includes detailed provisions on geographical restrictions, prohibited activities, and enforcement mechanisms, while ensuring compliance with Indonesian legal frameworks regarding employment restrictions and business competition.

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What is a 3 Year Non Compete Agreement?

This 3 Year Non Compete Agreement is essential for businesses operating in Indonesia seeking to protect their legitimate business interests, confidential information, and competitive advantage. The document is typically used when onboarding senior executives, key technical personnel, or employees with access to sensitive business information. It must be drafted in accordance with Indonesian legal requirements, particularly the Indonesian Civil Code and Law No. 13 of 2003 on Manpower, while considering constitutional rights regarding freedom of work. The agreement includes specific provisions on restricted activities, geographical limitations, and consideration, balanced against employee rights and fair competition principles. It's particularly crucial for industries with significant intellectual property or proprietary business methods, requiring careful consideration of enforceability under Indonesian jurisdiction.

What sections should be included in a 3 Year Non Compete Agreement?

1. Parties: Identification of the employer/company and the employee/restricted party

2. Background: Context of the agreement, including the employee's role and access to confidential information

3. Definitions: Key terms including 'Restricted Business', 'Confidential Information', 'Territory', and 'Restricted Period'

4. Non-Compete Obligations: Core restrictions on competitive activities, including specific prohibited actions

5. Duration and Territory: The 3-year term and geographical scope of the restrictions

6. Consideration: The compensation or benefits provided in exchange for the non-compete obligations

7. Confidentiality Obligations: Requirements regarding the protection of confidential information

8. Non-Solicitation: Restrictions on soliciting employees, customers, or suppliers

9. Acknowledgments: Employee's confirmation of the reasonableness of restrictions

10. Remedies: Legal remedies available in case of breach, including injunctive relief

11. Severability: Provisions for maintaining validity if parts are found unenforceable

12. Governing Law and Jurisdiction: Specification of Indonesian law and relevant courts

What sections are optional to include in a 3 Year Non Compete Agreement?

1. Garden Leave: Optional provisions for paid leave during part of the restricted period

2. Early Termination: Conditions under which the restrictions may be lifted or modified

3. Exception for Shareholding: Allowances for holding small percentages of shares in public companies

4. Return of Property: Requirements for returning company property upon termination

5. Independent Legal Advice: Confirmation that the restricted party has received independent legal advice

6. Survival of Obligations: Specification of which obligations continue after employment ends

What schedules should be included in a 3 Year Non Compete Agreement?

1. Schedule 1 - Restricted Territory: Detailed map or list of geographical areas covered by restrictions

2. Schedule 2 - Restricted Business Activities: Comprehensive list of prohibited business activities

3. Schedule 3 - Consideration Details: Breakdown of compensation or benefits provided

4. Appendix A - Key Customers and Suppliers: List of protected business relationships

5. Appendix B - Confidential Information Categories: Detailed classification of protected information

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok成人版 | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

Indonesia

Cost

Free to use

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