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The Compensation For Non Compete Agreement is a crucial document used in Indonesian business practice when companies need to protect their legitimate business interests from potential competitive activities by former employees. This document becomes particularly relevant when employees have access to sensitive information, trade secrets, client relationships, or specialized knowledge that could be harmful to the company if used by competitors. The agreement must comply with Indonesian Labor Law (Law No. 13 of 2003), the Civil Code, and competition regulations, ensuring that restrictions are reasonable in scope, duration, and geography. It typically includes detailed compensation provisions to ensure enforceability under Indonesian law, as non-compete clauses without adequate compensation may be challenged in court. The document is commonly used during hiring processes or employment transitions for key positions, particularly in industries with high intellectual property value or sensitive client relationships.

1. Parties: Identification of the employer and employee, including full legal names and addresses

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

3. Definitions: Key terms used in the agreement, including 'Restricted Business', 'Restricted Period', 'Restricted Territory', and 'Compensation'

4. Non-Compete Obligations: Detailed description of the activities the employee is restricted from engaging in after employment

5. Duration and Geographic Scope: Specific timeframe and geographical areas where restrictions apply, ensuring compliance with Indonesian law

6. Compensation Structure: Details of the compensation amount, payment schedule, and conditions for payment

7. Payment Terms: Specific provisions about how and when compensation will be paid

8. Confidentiality Obligations: Requirements to maintain confidentiality of company information

9. Acknowledgments: Employee's confirmation of the reasonableness of restrictions and receipt of adequate consideration

10. Breach and Remedies: Consequences of breaching the agreement and available remedies

11. Governing Law and Jurisdiction: Specification of Indonesian law as governing law and relevant jurisdiction for disputes

12. General Provisions: Standard clauses including severability, entire agreement, and amendments