Make a Nevada Non-Compete Agreement

Applicable State Laws - NRS 613.195 - 613.200

Nevada law is fairly detailed about non-compete agreements. For example, the law dictates that former employers may not restrict former employees from providing previous services to a former customer as long as the former employee did not solicit the client, and the client voluntarily contacted the former employee. In addition, all non-compete agreements must be reasonable in their time, scope, and geographic restrictions.

The Nevada Supreme Court decided this issue in Golden Road Motor Inn, Inc. d/b/a Atlantis Casino Resort v. Islam and Grand Sierra Resort, 132 Nev. __, 376 P.3d 151 (2016). In the ruling, the court found that a non-compete agreement that goes beyond what is reasonably necessary in both time or geographical scope to protect the employer's interests is considered unreasonable and unenforceable.

Non-compete agreements must also:

• Offer valuable consideration
• Not cause an undue hardship on the former employee

Protect your Nevada business by also using a Nevada non-disclosure agreement form. Download a Nevada non-disclosure agreement form now!

How to Write a Nevada Non-Compete Agreement

To write a Nevada non-compete agreement, first review Nevada law. Include the following clauses:

• Purpose. This clause explains the purpose of the non-compete agreement: to protect the legitimate interests of the business. That information may be referred to as "confidential information" or "proprietary information." This clause will also identify the parties and their roles. It will also include the effective date of the contract.
• Non-compete. This clause explains the restrictions on the period of time, geographic area, business practices and activities, non-solicitation on clients and customers, restrictions on working for general or specific competitors, and non-solicitation of employees.
• Time period. This clause may restate the time period. It also states when the time period begins, which is either at the beginning of the employment relationship or when it is terminated.
• Purchase option. The purpose of this clause is to explain if your business will allow the signing party to pay to get out of the contract. If your business will allow this, the amount they must pay is listed in this clause.
• Jurisdiction. This clause states that Nevada will be used to govern the non-compete agreement and any disputes that arise from it.
• Confidential information. This clause states that "confidential information" as used in the non-compete means any and all technical and non-technical information provided by your business includes, and is not limited to, any data or other proprietary information related to products, inventions, plans, methods, processes, developmental products, experimental products, intellectual property, software, databases, customer lists, vendor lists, supplier lists, marketing methods, reports, business plans, financial information, or other information related to your business or any of your customers, clients, or consultants that is made known to the signing party under the terms of the agreement.
• Permitted disclosure. This clause explains when information may no longer be considered confidential. This generally occurs when information becomes public through no fault of the signing party, the signing party discovers information on their own without a breach from another party, or when your business provides written consent to release specific information.
• Confidentiality. This clause states the signing party understands the information they have access to is confidential and they agree not to directly or indirectly communicate it to another party without receiving written consent from your business. They also agree they may not use the information for any reason except to further the business without receiving written consent from the business.
• Consultants and employees bound. This clause states that both consultants and employees are bound by the non-compete to keep the information in the strictest of confidence. It also states that they are on a need-to-know basis for the information.
• Return of materials. This clause states that either when the contract is terminated or when requested by your business, the signing party must return all documents and other tangible materials representing confidential information as well as any existing copies right away. This clause also explains that your business will notify the signing party if there is an unauthorized loss of confidential information.
• Remedies. This clause explains the remedies your business is entitled to pursue under Nevada law in the event the signing party breaches its obligations. Examples include the recovery of court costs and reasonable attorney fees, the award by a court of a temporary restraining order or a preliminary injunction against the unauthorized use of information, etc., as well as all other remedies available under Nevada law or as a means of equity.
• Choice of law. This clause states that the parties agree to choose Nevada law to govern the agreement and any arising dispute.
• Entire agreement. This final clause of the non-compete states that the entire agreement may be amended in writing, but only if the parties sign the amendment.

Both parties must sign the agreement as well as print their names. The signatures should be dated. Each party should receive a copy of the executed agreement for their records.