The Non-Compete Agreement For Existing Employees is a crucial document used in Australian business contexts when companies need to protect their legitimate business interests, including confidential information, customer relationships, and competitive advantage. This agreement is particularly relevant when existing employees are promoted, given access to sensitive information, or receive additional benefits warranting new restrictive covenants. The document must comply with Australian competition law principles and provide adequate consideration to be enforceable. It typically includes specific provisions about restricted activities, geographical limitations, duration of restrictions, and must be reasonable in scope to be upheld by Australian courts. The agreement should be tailored to the specific role and circumstances of each employee while maintaining compliance with both federal and state legislation.
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1. Parties: Identifies the employer and employee, including their full legal names, addresses, and ACN/ABN where applicable
2. Background: Sets out the context of the agreement, including the employee's current role, length of employment, and reason for the non-compete agreement
3. Definitions: Defines key terms used throughout the agreement, including 'Confidential Information', 'Restricted Activity', 'Restricted Period', and 'Restricted Area'
4. Consideration: Specifies the consideration being provided to the employee in exchange for entering into this agreement (e.g., continued employment, bonus, or other benefits)
5. Non-Compete Obligations: Details the specific activities the employee is restricted from engaging in, including timeframes and geographical limitations
6. Non-Solicitation Obligations: Prohibitions on soliciting customers, suppliers, or employees of the company
7. Confidentiality Obligations: Requirements to maintain confidentiality of company information during and after employment
8. Acknowledgments: Employee's acknowledgment that the restrictions are reasonable and necessary
9. Severability: Provisions allowing court modification of unreasonable restrictions rather than invalidating the entire agreement
10. Governing Law and Jurisdiction: Specifies that Australian law governs the agreement and nominates the relevant jurisdiction for disputes
11. Execution: Signature blocks and execution details for all parties
1. Garden Leave: Optional provisions for placing the employee on paid leave during notice periods, used when there's higher risk of competitive activity
2. Intellectual Property: Additional provisions regarding ownership and protection of IP, particularly relevant for technical or creative roles
3. Post-Employment Cooperation: Requirements for the employee to assist with handover or transition, particularly relevant for senior roles
4. Independent Legal Advice: Section acknowledging that the employee has had the opportunity to seek independent legal advice, recommended for stronger enforceability
5. Dispute Resolution: Detailed procedures for resolving disputes, recommended for senior employees or high-risk situations
6. Survival of Obligations: Clarification of which obligations survive termination of employment, useful for complex agreements
1. Schedule 1 - Restricted Activities: Detailed list of specific activities, competitors, or business types the employee is restricted from engaging with
2. Schedule 2 - Restricted Area: Maps or detailed descriptions of the geographical areas where restrictions apply
3. Schedule 3 - Consideration Details: Specific details of any additional compensation or benefits being provided as consideration
4. Schedule 4 - Key Customers and Suppliers: List of specific customers and suppliers covered by non-solicitation provisions
5. Appendix A - Employee's Current Role and Responsibilities: Detailed description of the employee's current position and duties, useful for establishing the scope of restrictions
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