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Last revision: 27/11/2023
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This document is a Non Compete Agreement to be signed by an employer and employee. The purpose of the document is to impose restrictions on the employee's conduct during their employment and for a defined period after the employment relationship ends.
This document includes three types of 'restrictive covenants':
The non compete obligations precludes the employee from professionally engaging with one of the employer's competitors or launching their own enterprise to compete with the employer's for a limited period of time.
The non solicitation obligations precludes the employee from enticing the employer's other staff members or their customers away from the employer's business in favour of a competing enterprise.
The non disclosure obligations prevents the employee from revealing any 'confidential information' they were exposed to during their employment to any third party, or using that information to the competitive disadvantage of the employer.
These terms limit the employee's professional activity after the leave the employer's employment. As such, they interfere with the employee's right to earn a living (a constitutionally protected right in Ireland). They can only represent a 'restraint of trade' infringing certain aspects of competition law.
In light of this, it is very important in order for these clauses to be enforceable that they remain within certain parameters. Firstly, they can only limit the employee's activity insofar as is necessary to protect the employer's legitimate interest. Secondly, they must not be overly restrictive so as to deny the employee's right to earn a living. Thirdly, they cannot prohibit all competition, everywhere, forever.
It is for this reason that the restrictive covenants only apply:
This document observes the limitations on restrictive covenants to enhance the enforceability of these clauses.
How to Use this Document
This document can be used in respect of new or existing employees. In most cases, the Non Compete Agreement will be executed contemporaneous with a new Contract of Employment. However, it may be the case that an existing employee may be required to sign a Non Compete Agreement subsequent to their hiring. This may arise where the employee is transferred to a new project or team wherein they will be exposed to commercial sensitive and valuable information. As a result of which, that employee could imperil the commercial viability and advantage of the employer if they decide to move to a competitor or launch their own competing enterprise.
It is important that the user inserts the date on which the Contract of Employment between the Parties was signed in the Non Compete Agreement. The two documents are related. The obligation to refrain from competing with the employer is a condition of employment.
The user should consult the Contract of Employment when filling in relevant details about the employment relationship, such as the employee's pay, benefits and job title. It is important that these terms are consistent across the two documents.
While this document contains obligations of Non Disclosure, the user may want more elaborate definitions of 'confidential information' or more numerous obligations of non-disclosure, in which case a separate Non Disclosure Agreement can be filled out in tandem with the present agreement.
This document is designed for use by an employer and employee. If the Parties wish to conclude a Non Compete Agreement between a client and independent contract (not in an employment relationship) they should consult another document.
This document is designed to reflect the requirements of Irish Contract Law.
Employment Law is also relevant, as this document pertains to an employment relationship. No specific legislation deals with non-compete covenants in employment contracts.
However, the courts interpret employment contracts in a particular manner and in light of the peculiar contractual relationship between employer and employer.
For example, the court 'reads in' to employment contracts, a duty of fidelity and loyalty. And the Workplace Relations Commission has allowed dismissals on the grounds of a breach of good faith and loyalty.
This document also takes account the Irish courts' rulings on non compete clauses, the most recent and attention drawing such case was "Ryanair DAC V Bellew" which found that non compete clauses are enforceable, but the employee subject to these restrictions must be adequately compensated for the restriction of their professional activity.
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