Non Compete Agreement Nz

A non-compete agreement, also known as a non-competition clause, is a legal document that restricts an employee from working for a competitor or starting a competing business for a specific period of time after leaving their current employer. In New Zealand, non-compete agreements are commonly used by employers to protect their business and confidential information.

Non-compete agreements can be included as part of an employment contract or as a separate agreement between the employer and employee. It is essential to ensure that the agreement is reasonable and enforceable, as an unreasonable non-compete agreement may not hold up in court.

There are several factors to consider when drafting a non-compete agreement in New Zealand:

1. Duration: The duration of the non-compete agreement must be reasonable and proportionate to the nature of the industry and business. Generally, non-compete agreements in New Zealand range from 6 months to 2 years.

2. Geographic Scope: The geographic scope of the non-compete agreement must also be considered. The restriction should not be overly broad and should be limited to the area where the business operates.

3. Nature of the Business: The nature of the business and the level of competition in the industry are also factors to be considered when drafting a non-compete agreement. It must not be too restrictive, as it may harm the employee`s ability to secure future employment.

4. Compensation: Compensation is an essential element of a non-compete agreement. Employers must offer reasonable compensation to the employee in exchange for the restriction on their ability to work for a competitor or start a competing business.

It is crucial for both employees and employers to seek legal advice before signing a non-compete agreement in New Zealand. Legal advice helps ensure that the agreement is reasonable and enforceable, and protects the interests of both parties.

In conclusion, a non-compete agreement is a significant legal document that protects the interests of the employer and maintains confidentiality. It is essential to ensure that the agreement is reasonable, proportionate, and enforceable, and both the employer and employee understand its terms and conditions. Seeking legal advice before signing the agreement can help identify any potential issues and protect both parties` interests.