The Non-Compete Agreement After Termination is essential for Philippine businesses seeking to protect their legitimate interests following an employee's departure. This document becomes particularly crucial when employees have had access to sensitive information, trade secrets, client relationships, or specialized knowledge that could provide a competitive advantage if used by competitors. The agreement must be carefully drafted to comply with Philippine labor laws, constitutional rights, and competition regulations, ensuring that restrictions are reasonable in terms of duration, geographic scope, and scope of prohibited activities. It is commonly used in knowledge-intensive industries and for key positions where the potential impact of competition from former employees could significantly affect the business. The agreement typically includes specific provisions about the nature of restricted activities, consideration provided, and enforcement mechanisms, all while maintaining compliance with Philippine legal requirements for such restrictive covenants.
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1. Parties: Identifies and defines the parties to the agreement - typically the employer and the former employee
2. Background: Explains the context of the agreement, including the former employment relationship and legitimate business interests being protected
3. Definitions: Defines key terms used throughout the agreement, including 'Confidential Information', 'Competing Business', 'Restricted Period', and 'Restricted Territory'
4. Non-Compete Obligations: Details the specific activities the former employee is prohibited from engaging in, including timeframe and geographic scope
5. Consideration: Specifies the consideration provided to the former employee in exchange for the non-compete obligations
6. Confidentiality Obligations: Outlines the ongoing duties regarding confidential information and trade secrets
7. Duration and Territory: Clearly defines the time period and geographical area where the restrictions apply
8. Acknowledgments: Former employee's acknowledgment that restrictions are reasonable and necessary
9. Remedies: Specifies remedies available in case of breach, including injunctive relief and damages
10. General Provisions: Standard contractual provisions including governing law, severability, and entire agreement
1. Non-Solicitation of Customers: Additional restrictions on approaching or dealing with company customers - used when customer relationships are particularly valuable
2. Non-Solicitation of Employees: Restrictions on recruiting other employees - important for protecting workforce stability
3. Return of Property: Requirements for returning company property - included when the employee had access to significant company assets
4. Cooperation in Litigation: Obligations to assist in future legal proceedings - relevant when employee had key role or knowledge
5. Garden Leave: Provisions for paid leave during notice period - used for senior positions or when immediate competition risk exists
6. Assignment Rights: Rights to assign the agreement - important in cases of potential company sale or restructuring
1. Schedule A - Restricted Territory: Detailed map or list of geographical areas where restrictions apply
2. Schedule B - Competing Businesses: List of specific competitors or types of competing businesses
3. Schedule C - Consideration Details: Breakdown of any financial compensation or benefits provided
4. Appendix 1 - Confidential Information: Detailed list of types of confidential information covered
5. Appendix 2 - Prior Inventions: List of any relevant prior inventions or intellectual property owned by the employee
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