A non-competition agreement clause is a legal contract addendum that restricts an employee or business owner from competing against their former company within a specified timeframe and geographic area. Businesses typically use this clause to protect their trade secrets, confidential information, and client base from being accessed or used by their ex-employees.

The non-competition agreement clause is typically included in employment contracts, partnership agreements, and business sales contracts. Its purpose is to prevent an individual from sharing or using the knowledge they gained while working for the company to compete against it, either by starting a similar business or working for a competitor.

The most common types of non-competition agreement clauses include:

1. Timeframe: The duration of the non-compete agreement can vary from a few months to several years, depending on the industry and the type of role held by the employee.

2. Geographic location: The geographic scope of the non-compete agreement is usually limited to a specific region, state or country, but it can also be worldwide.

3. Scope of activities: The scope of the non-compete agreement may be limited to specific products or services provided by the company, or it may be more broadly defined to include any activity that competes with the company`s operations.

Non-competition agreement clauses are legal in most states, but the enforceability of these agreements varies. Some states limit the duration and geographic scope of non-compete agreements, while others have no limitations. Courts also consider whether the non-compete agreement serves a legitimate business purpose and whether the restrictions are reasonable in relation to the employee`s position and geographic location.

Employers must carefully draft non-competition agreement clauses to ensure that they are legally enforceable and do not violate any state or federal laws. If the employer breaches the agreement, they may be liable for damages suffered by the employee or business owner, including lost profits and legal fees.

In summary, a non-competition agreement clause is a valuable tool for businesses to protect their intellectual property and client base. Employers should ensure that the clause is drafted carefully, keeping in mind the employee`s position, the duration, geographic scope, and the scope of activities. Employees should understand the implications of the clause before signing the agreement, including the potential impact on their future employment opportunities.