{"id":1887,"date":"2024-06-06T15:31:47","date_gmt":"2024-06-06T15:31:47","guid":{"rendered":"https:\/\/lawsikho.com\/blog\/?p=1887"},"modified":"2024-06-06T15:31:47","modified_gmt":"2024-06-06T15:31:47","slug":"3-different-ways-to-draft-a-non-compete-clause","status":"publish","type":"post","link":"https:\/\/lawsikho-frontend-development.lawsikho.dev\/blog\/3-different-ways-to-draft-a-non-compete-clause\/","title":{"rendered":"3 different ways to draft a non-compete clause"},"content":{"rendered":"\n

Let us assume that a startup, say Spotify, is hiring a senior level employee, say, for the role of a Chief Marketing Officer. <\/p>\n\n\n\n

What if the CMO of the startup wants to quit and start providing freelance marketing services to other startups, including other music apps?<\/p>\n\n\n\n

In the education space, coaching institutes may also insert non-compete clauses in their agreements with faculty and key employees.<\/p>\n\n\n\n

Hotels do a similar arrangement with chefs. A 5-star hotel may restrict a chef from working in another 5-star hotel in the nearby region.  <\/p>\n\n\n\n

This is why non-compete clauses are written – but they must be extremely narrow. Today, we will learn about drafting and I will not go into the validity of the clause. <\/p>\n\n\n\n

Let us see the clauses.  <\/p>\n\n\n\n

Version 1<\/strong>: Non-compete for the duration of the agreement<\/p>\n\n\n\n

During the Term of this Agreement, the Consultant shall not start any new business which is identical or similar, or otherwise competes with the services provided by <Training Institute\/Hotel\/Startup>, or work with a Competing Business.<\/p>\n\n\n\n

Please draft this clause on chat now. <\/p>\n\n\n\n

Version 2: <\/strong>Non-compete applicable after contract expiry\/ termination<\/p>\n\n\n\n

During the Term of this Agreement and for a period of [6 months\/ 12 months\/ 2 years] after its termination or expiration, the Consultant shall not start any new business which is identical or similar, or otherwise competes with the services provided by <Training Institute>, or work with a Competing Business.<\/p>\n\n\n\n

Go ahead and draft this.<\/p>\n\n\n\n

Version 3<\/strong>: Extend or narrow down the scope by defining Competing Business accordingly. <\/p>\n\n\n\n

In this, you write the above clause, and then you define what a competing business is. <\/p>\n\n\n\n

Competing Business means any business engaged in providing CLAT services in India. [too wide] [Broad]<\/p>\n\n\n\n

Competing Business means the following coaching classes – A, B and C.  [Narrow]<\/p>\n\n\n\n

Competing Business means any business engaged in providing CLAT coaching services in 5 km radius of Connaught Place, New Delhi. [Narrow]<\/p>\n\n\n\n

Now, I am going to give you a couple of examples to ask you whether the clause is broad or narrow.  <\/p>\n\n\n\n

Competing business means any company operating in the fintech space. Is this broad or narrow?<\/p>\n\n\n\n

Competing business means Flipkart, PhonePe and BharatPe. <\/p>\n\n\n\n

How was it? What did you learn? Can you now draft non-compete clauses for different kinds of agreements?<\/p>\n\n\n\n

What if an international client asks you to review a non-compete clause? <\/strong><\/p>\n\n\n\n

Would you like to learn how to do it?<\/strong><\/p>\n\n\n\n

Here are some projects around it that are already available on Upwork: <\/strong><\/p>\n\n\n\n

Here\u2019s a project on Upwork around non-compete from a US client, and they\u2019re paying USD 100 for it!<\/p>\n\n\n\n

\"\"\/<\/figure>\n","protected":false},"excerpt":{"rendered":"

Let us assume that a startup, say Spotify, is hiring a senior level employee, say, for the role of a Chief Marketing Officer.  What if the CMO of the startup…<\/p>\n","protected":false},"author":3,"featured_media":1656,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[13,29],"tags":[],"class_list":["post-1887","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-careers","category-drafting"],"_links":{"self":[{"href":"https:\/\/lawsikho-frontend-development.lawsikho.dev\/blog\/wp-json\/wp\/v2\/posts\/1887","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lawsikho-frontend-development.lawsikho.dev\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/lawsikho-frontend-development.lawsikho.dev\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/lawsikho-frontend-development.lawsikho.dev\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/lawsikho-frontend-development.lawsikho.dev\/blog\/wp-json\/wp\/v2\/comments?post=1887"}],"version-history":[{"count":1,"href":"https:\/\/lawsikho-frontend-development.lawsikho.dev\/blog\/wp-json\/wp\/v2\/posts\/1887\/revisions"}],"predecessor-version":[{"id":1888,"href":"https:\/\/lawsikho-frontend-development.lawsikho.dev\/blog\/wp-json\/wp\/v2\/posts\/1887\/revisions\/1888"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/lawsikho-frontend-development.lawsikho.dev\/blog\/wp-json\/wp\/v2\/media\/1656"}],"wp:attachment":[{"href":"https:\/\/lawsikho-frontend-development.lawsikho.dev\/blog\/wp-json\/wp\/v2\/media?parent=1887"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/lawsikho-frontend-development.lawsikho.dev\/blog\/wp-json\/wp\/v2\/categories?post=1887"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/lawsikho-frontend-development.lawsikho.dev\/blog\/wp-json\/wp\/v2\/tags?post=1887"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}