The Active Non-Compete Agreement is a crucial document for businesses operating in the Philippines seeking to protect their legitimate interests while maintaining compliance with local laws. This agreement is typically implemented when an employee has access to sensitive information, key client relationships, or valuable trade secrets. The document must carefully balance the employer's need to protect business interests with the employee's constitutional right to work, as recognized under Philippine law. The agreement includes specific provisions regarding duration, geographical scope, and prohibited activities, ensuring they are reasonable and enforceable under Philippine jurisdiction. An Active Non-Compete Agreement is particularly important in industries with high employee mobility or where competitive advantages are based on proprietary knowledge or client relationships.
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1. Parties: Identification of the employer and employee, including complete legal names and addresses
2. Background: Context of the agreement, employment relationship, and legitimate business interests being protected
3. Definitions: Clear definitions of key terms including 'Confidential Information', 'Competitive Activity', 'Territory', and 'Restricted Period'
4. Scope of Non-Compete: Detailed description of prohibited competitive activities and specific roles/positions covered
5. Duration and Geographic Coverage: Specific timeframe and territorial limits of the non-compete obligations, ensuring reasonableness under Philippine law
6. Legitimate Business Interests: Clear articulation of the business interests being protected, including customer relationships, trade secrets, and proprietary information
7. Consideration: Details of compensation or benefits provided in exchange for the non-compete obligations
8. Acknowledgments: Employee's acknowledgment of the reasonableness of restrictions and receipt of consideration
9. Remedies: Consequences of breach, including injunctive relief and damages
10. Severability: Provision for maintaining validity of remaining clauses if any part is found unenforceable
11. Governing Law and Jurisdiction: Specification of Philippine law as governing law and jurisdiction for disputes
12. Entire Agreement: Statement that this document represents the complete agreement regarding non-compete obligations
1. Garden Leave: Optional provision for paid leave during initial period of restriction, used for senior executives or key personnel
2. Industry-Specific Restrictions: Additional restrictions specific to particular industries or professions, used when standard restrictions are insufficient
3. Training and Development Costs: Provisions regarding repayment of training costs, used when significant investment in employee development exists
4. Client Non-Solicitation: Specific provisions regarding client relationships, used for client-facing roles
5. Employee Non-Solicitation: Restrictions on recruiting other employees, used for management-level positions
6. Post-Employment Cooperation: Requirements for cooperation in transition of duties, used for key positions
1. Schedule A - Restricted Territory: Detailed map or list of geographic areas covered by the non-compete restrictions
2. Schedule B - Restricted Businesses: Comprehensive list of specific competitors, business types, or activities that are restricted
3. Schedule C - Compensation Details: Specific details of consideration or compensation provided for the non-compete obligations
4. Appendix 1 - Confidential Information: Detailed categorization of confidential information and trade secrets covered
5. Appendix 2 - Key Clients: List of specific clients or customer relationships protected by the agreement
6. Appendix 3 - Employee Acknowledgment: Formal acknowledgment form for employee signature confirming understanding and acceptance
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