Employee Resignation Agreement (Non-Compete)

This resignation agreement sets terms for how a departing worker and the company separate on good terms while protecting the employer's proprietary information and client relationships. It combines confidentiality, non-solicit, and a non-compete clause. For two years after employment ends, the former employee agrees not to perform services that aid a competing business, solicit the company's clients, or interfere with its employees, vendors, or contractors. These restrictions are intended to reduce the threat of unfair competition and misuse of confidential information and trade secrets.

The document also requires the return of all company property, including source code, devices, accounts, and access credentials, and it bars any future access without permission. It prohibits derogatory statements about the company, which is a common practice to protect the reputation. In exchange for these obligations, the agreement provides consideration: payment of outstanding wages and a two-week severance equal to the last salary, provided the employee signs. That exchange of compensation can help the terms stand as reasonable and enforceable.

As with many non-compete agreements, enforceability can depend on state law and whether the scope, limitations, and duration are reasonable. Courts often look at factors such as the defined scope of competition, the geographic area, and how long the restriction lasts before the agreement expires. This contract sets a two-year restriction but does not specify a geographic area, which some jurisdictions may weigh differently.

The agreement allows either party to file a lawsuit and seek injunctions in the event of a violation or threatened breach. Because rules are, including proposals like the Workforce Mobility Act and various state rules, parties often seek consultation with an attorney to discuss other terms and negotiate where appropriate.

Example use cases include: a salesperson who might otherwise solicit clients after a job offer from a competitor; an engineer who could be tempted to take code or training materials to a new role; or workers who quit or are terminated and need clarity on what they can do while they wait to be hired elsewhere. A prospective employer may request details, possibly refuse to hire, or decide to delay a position to comply.

Proposal Kit can help organizations assemble documents like this with consistent language, automate line-item quoting where compensation or severance is outlined, and use its AI Writer and template library to create related materials. Its ease of use supports teams that need to write, revise, and manage similar agreements efficiently.

Beyond confidentiality and non-solicit protections, this type of resignation agreement aims to balance business needs with a worker's ability to earn a living. For former employees, a restrictive covenant must have a valid reason tied to protecting proprietary relationships or trade secrets, not simply limiting competition. Whether a company can enforce such terms is governed by state law and subject to changing rules, so businesses often design restrictions to be narrowly tailored and valid. The agreement's non-disparagement language also helps maintain client confidence and protect reputation.

Consideration matters. Here, severance provides clear value for the obligations taken on once the agreement is signed. Traditionally, employers also use alternatives such as a pay raise, a bonus, or continued employment as consideration, depending on the circumstances. HR leaders should ensure the terms represent legitimate business interests, keep the scope reasonable, and avoid provisions that raise barriers to a person's new role without a valid link to confidential information or customer goodwill.

Proposal Kit can streamline how companies assemble tailored versions of these agreements and related documents. Teams can insert optional clauses, set durations, and use automated line-item quoting to itemize severance or other compensation. The AI Writer can write supporting explanations or summaries for managers, helping them communicate the purpose of the agreement with clarity and consistency. Its template library and ease of use help organizations standardize language, reduce writing time, and increase confidence that the documents match current practice while reflecting the company's values.

Another key insight is operational clarity. The restrictions apply whether the worker quit or was terminated, and they focus on stopping competition, client solicitation, and poaching. Because no geographic area or governing law is stated, businesses often decide which state law they want these obligations governed by, so the terms stand a better chance in courts. Companies also document the valid reason for any traditionally restrictive covenant, such as protecting clients, confidential information, or costly training, to show the restriction is reasonable and tied to real value.

Compliance planning matters. Former employees can give a prospective employer a copy of the agreement so both sides can decide on a new role that does not trigger a violation. The prospective employer may adjust a job offer, raise compensation, or possibly wait to hire to comply.

Track the two-year period so everyone knows when the agreement expires. If a breach occurs, the contract allows either party to file a lawsuit, seek an injunction, and pursue damages. Managers should avoid broad statements that could be read to restrict legally protected discussions and instead keep requests focused on proprietary information and client goodwill under the rule of applicable state law.

Proposal Kit helps teams produce signature-ready agreements and related materials-role-based variations, property-return checklists, client notification letters, and manager summaries. Its document assembly streamlines other terms, its automated line-item quoting can outline severance or other consideration, and the AI Writer can write supporting explanations, giving HR and legal confidence when agreements are signed and subject to later enforce review.

How do you write a Employee Resignation Agreement (Non-Compete) document? - The Narrative

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