Waiver and Release of Non-Compete Obligations

by Practical Law Labor & Employment

A Standard Document that provides a model agreement for an employer to waive or modify an employee's or former employee's non-compete or non-solicitation obligations. This jurisdiction-neutral template can be adapted as a stand-alone agreement, an addendum, or incorporated into a separation or severance agreement when an individual seeks to engage in post-employment activities that might otherwise be restricted. This Standard Document addresses the critical legal considerations surrounding the enforceability of post-employment restrictive covenants, which vary significantly under state law. It explores the reasons an employer might agree to a waiver, such as changed business circumstances or an employee's departure on good terms. This Standard Document also highlights the potential risks for employers, including how selective enforcement can impact the ability to enforce similar covenants in the future. It provides a framework for clearly defining the scope of the release, documenting the rationale for the decision, confirming any surviving obligations like confidentiality, and addressing the need for consideration. For more on state requirements, see Non-Compete Laws: State Q&A Tool and State Restrictive Covenants Toolkit. For a 50-state comparison of non-compete laws and requirements, see Quick Compare Chart: State Non-Compete Laws.