Employee Restrictive Covenant Agreement
Cover Terms
The terms below are incorporated into and form part of this agreement.
| Employer | [Legal name of the entity that employs the employee] | ||||||||
| Employee | [Full legal name of the employee] | ||||||||
| Employee Title / Position | |||||||||
| Effective Date | [Effective date of this agreement — the date the last party signs. It anchors the duration presumptions stated in Cover Terms.] | ||||||||
| Governing Law | Montana | ||||||||
| Confidentiality | |||||||||
| Trade Secrets Duration | Perpetual | ||||||||
| Other Confidential Information Duration | 24 months | ||||||||
| Employee Non-Solicitation | |||||||||
| Duration | 24 monthsMarket benchmark HideShow
Why this selected default?Why is this the selected default?24 months matches the modal employee non-solicit term observed in benchmarked, publicly-filed employee agreements; 12 months is the common lighter alternative. The Act sets no express duration presumption for the no-hire category, so the uniquely-essential scope limit does the primary category work; counsel should size the term to the workforce interest actually protected. Showing 3 representative examples. Company names link directly to the underlying SEC filing.
Showing 3 representative examples. Company names link directly to the underlying SEC filing.
Showing 3 representative examples. Company names link directly to the underlying SEC filing.
Showing 3 representative examples. Company names link directly to the underlying SEC filing. See all 3 examples in the complete benchmark →Showing 1 representative example. Company names link directly to the underlying SEC filing. See all 1 example in the complete benchmark →Showing 1 representative example. Company names link directly to the underlying SEC filing. See all 1 example in the complete benchmark →Showing 1 representative example. Company names link directly to the underlying SEC filing. See all 1 example in the complete benchmark →Showing 1 representative example. Company names link directly to the underlying SEC filing. See all 1 example in the complete benchmark →Showing 1 representative example. Company names link directly to the underlying SEC filing. See all 1 example in the complete benchmark → | ||||||||
| Covered Employee Period | 12 months | ||||||||
| Customer Non-Solicitation | |||||||||
| Duration | 12 monthsState-law basis 12 monthsReference only — not part of this agreement. 12 months sits well inside the presumptively reasonable window for a current-customer non-solicit: eighteen months, or for as long as post-separation consideration is paid, whichever is greater. Counsel may extend toward eighteen months, or longer while post-separation consideration is paid, where the interest supports it. | ||||||||
| Covered Customer Period | 12 months | ||||||||
| No Business with Covered Customers | |||||||||
| Duration | 12 monthsState-law basis 12 monthsReference only — not part of this agreement. 12 months sits within the current-customer window. Because non-dealing has no category of its own, it is drawn to fit inside the current-customer non-solicit exception, and its duration tracks that category's presumption. | ||||||||
| Non-Investment | |||||||||
| Duration | 12 months | ||||||||
| Consideration | |||||||||
| Consideration for Restrictive Covenants | the compensation, access to Confidential Information and trade secrets, and other benefits Employer provides to Employee under this agreement, which the parties agree are given specifically in exchange for the restrictive covenantsState-law basis the compensation, access to Confidential Information and trade secrets, and other benefits Employer provides to Employee under this agreement, which the parties agree are given specifically in exchange for the restrictive covenantsReference only — not part of this agreement. The default recites the access-to-confidential-information and compensation the agreement itself provides and ties them to the covenants, addressing Montana's independent-consideration requirement for post-hire covenants. Counsel should replace it with the specific negotiated benefit, or rely on the job offer where the covenant is signed as part of pre-employment negotiations. | ||||||||
| Non-Disparagement | |||||||||
| Duration | 24 months |
Standard Terms
1. Defined Terms
“Competitive Business” means the business activities described in Cover Terms under Competitive Business.
“Confidential Information” means non-public information relating to Employer's business, including trade secrets, customer lists, pricing, business processes, technical data, and strategic plans, but excluding information that becomes public through no fault of Employee.
“Covered Customers” means customers, vendors, referral sources, and business partners the Employee actually served or for whom Employee had responsibility during the 12 months before termination of employment.
“Covered Employees” means employees with whom Employee actually worked or whom Employee managed during the 12 months before termination of employment.
“Passive Public Holdings” means ownership of securities of a publicly traded company representing less than five percent of any class of such company's securities, and interests in diversified mutual funds, index funds, and exchange-traded funds that may hold securities of a Competitive Business.
“Protected Interests” means Employer's Protected Interests in its Confidential Information and trade secrets, its relationships with specific customers, patients, and referral sources, its workforce stability, and its goodwill, limited to interests that protect against more than ordinary competition.
“Restricted Period” means the duration specified in Cover Terms for each covenant, beginning on the date Employee's employment with Employer ends for any reason.
“Restricted Territory” means the geographic area described in Cover Terms under Restricted Territory.
“Solicit” means to directly or indirectly contact, approach, induce, or encourage any person or entity for the purpose of diverting business away from Employer, and does not include responding to general advertisements or unsolicited inquiries not initiated by Employee.
“Trade Secrets” means information or computer software that derives independent economic value from not being generally known or readily ascertainable and is the subject of reasonable efforts to maintain its secrecy.
2. Recitals and Partial-Restraint Basis
Employee acknowledges that the covenants protect Employer's Protected Interests and are supported by consideration. Employer would not provide Employee with access to its Protected Interests absent these covenants.
Drafting Note Partial versus absolute restraints
Montana's partial-restraint cases are not a license for a broad no-work clause. Section 28-2-703 voids any contract restraining a lawful profession, trade, or business except a reasonable partial restraint, and the line the cases draw is functional rather than nominal: a covenant that leaves the worker no realistic way to practice the trade in the actual market is an absolute prohibition and unlawful, even when it carries a facial time or territory limit . A restraint that is not an absolute prohibition draws a factual reasonableness determination instead of automatic invalidation, so the covenant that survives is the one keyed to a limited client set, territory, time, or fee consequence while practice stays open . Montana courts void an overbroad restraint rather than trimming it, so the restraint that holds is the one sized to the worker's real market at signing.
3. Timing, Consideration, and Right to Consult Counsel
Employee had a reasonable opportunity to consult with an attorney of Employee's choosing before entering into this agreement. The consideration for the restrictive covenants is the compensation, access to Confidential Information and trade secrets, and other benefits Employer provides to Employee under this agreement, which the parties agree are given specifically in exchange for the restrictive covenants, given in exchange for those covenants. This agreement is effective as of the Effective Date listed in Cover Terms.
Drafting Note Independent consideration for post-hire covenants
A Montana covenant signed after employment has begun does not draw its consideration from continued at-will employment alone; the simple fact of continued employment may not serve as good consideration for a post-hire non-compete . Because good consideration is also the second element of the reasonableness test, a post-hire covenant resting on nothing new fails twice over — as a matter of contract formation and as a matter of the restraint's reasonableness — while a covenant tied to a new benefit documented at signing, such as a raise, a promotion, or access to trade secrets or confidential information, carries its own exchange . A covenant presented as part of pre-employment negotiations instead rests on the job offer itself, and past raises or the bare fact of prior employment do not count.
4. Confidential Information and Trade Secret Protection
Employee must treat all Confidential Information as strictly confidential. Employee must not use or disclose Confidential Information except as required to perform authorized job duties or with Employer's prior written consent. Employee's obligations regarding trade secrets continue for as long as the information remains a trade secret. Employee's obligations regarding other Confidential Information continue for the period specified in Cover Terms.
5. Permitted Disclosures and Protected Conduct
Nothing in this agreement prohibits Employee from: (a) reporting possible violations of law to any government agency, including the Securities and Exchange Commission, the Equal Employment Opportunity Commission, the Occupational Safety and Health Administration, or any other federal, state, or local agency; (b) making disclosures protected under whistleblower provisions of any law; (c) discussing wages, hours, or other terms and conditions of employment as protected by Section 7 of the National Labor Relations Act, 29 U.S.C. § 157; (d) testifying truthfully in legal proceedings or making disclosures required by law, court order, or a government investigation, with notice to Employer where lawful; or (e) filing a sealed complaint in court using Confidential Information without liability. Pursuant to the Defend Trade Secrets Act, 18 U.S.C. § 1833(b), Employee may not be held criminally or civilly liable for disclosing a trade secret in confidence to a government official or attorney solely for the purpose of reporting or investigating a suspected violation of law, or in a sealed court filing.
6. Return, Deletion, and Certification of Company Property
Upon termination of employment, Employee must promptly return to Employer all documents, devices, files, credentials, and other materials containing or relating to Confidential Information. Where permitted, Employee must permanently delete electronic copies of Confidential Information from personal devices and accounts. Employee must certify compliance with this section in writing upon Employer's request. This certification records, as of its date, what Employee retained and what Employee returned or deleted.
7. Non-Solicitation of Employees
During the Restricted Period, Employee must not Solicit, recruit, hire, or attempt to hire any Covered Employee. This restriction does not prohibit Employee from providing a professional reference upon request or from hiring a person who responds to a general advertisement not directed specifically at Employer's employees.
8. Non-Solicitation of Customers, Vendors, Referral Sources, and Business Partners
During the Restricted Period, Employee must not Solicit the business of any Covered Customer.
9. No Business with Covered Customers
During the Restricted Period, Employee must not accept, service, or do business with any Covered Customer, regardless of whether Employee or the Covered Customer first initiated contact.
10. Non-Investment
During the Restricted Period, Employee must not acquire or hold any active ownership interest in, serve as a director, officer, manager, or advisor to, or have material economic participation in any Competitive Business. This covenant does not apply to an Employee covered by the Health-Care Provider Restrictions section. Passive Public Holdings are permitted.
11. Non-Disparagement
During the Restricted Period specified in Cover Terms for Non-Disparagement, Employee must not make statements that are intended to or reasonably likely to disparage Employer, its officers, directors, employees, products, or services. This section does not restrict Employee from making truthful statements in legal proceedings, providing truthful testimony, making disclosures to government agencies, or exercising rights protected by law, including Section 7 of the National Labor Relations Act.
12. Health-Care Provider Restrictions
If Employee is a psychologist, social worker, professional counselor, addiction counselor, marriage and family therapist, behavioral health peer support specialist, or other covered health-care provider, this agreement does not restrict Employee's right, after the professional relationship ends, to (a) practice or provide licensed services in any geographic area and for any period; (b) treat, advise, consult with, or establish a provider-patient relationship with any current patient of Employer; or (c) solicit or seek to establish a provider-patient relationship with any such patient. This exclusion does not apply to a covenant made in connection with the sale of a practice or, for a physician, a repayment obligation for money paid or advanced under a payback schedule that decreases over time.
Drafting Note Covered health-care provider restrictions
For a covered provider, § 28-2-724 reaches practice restrictions and restrictions on treating, advising, consulting with, establishing relationships with, or soliciting covered patients alike, so a non-compete recast as a patient non-solicit is void to the same extent as the practice ban it replaces . Coverage is phased by when the contract was made or renewed: the behavioral-health classes predate the 2025 amendments, HB 198 added naturopathic physicians, registered professional nurses, advanced practice registered nurses, and physician assistants for contracts made or renewed on or after April 16, 2025, and HB 620 added all physicians licensed under Title 37, chapter 3 for contracts made or renewed on or after January 1, 2026, so a renewal or amendment can pull an older agreement into the current regime by its made-or-renewed date . The two statutory exceptions are narrow: a covenant tied to the sale and purchase of a practice, and a decreasing-payback repayment provision written for physicians only, which is not an opening for the other covered classes .
13. Sale-of-Goodwill and Partnership-Dissolution Exception Covenants
This agreement contains no covenant made in connection with the sale of business goodwill or the dissolution of a partnership.
Drafting Note The statutory sale and partnership exceptions
A covenant claiming Montana's statutory exceptions holds only where an actual qualifying transaction supports it and the geography stays inside the statutory menu — the principal-office city or county, an adjacent city or county, or a combination of those . The exception is substance-tested rather than label-driven: a partnership document's recital does not create a goodwill sale, and where no sale of property for pecuniary consideration occurred the exception does not apply . A sale-of-business or dissolution covenant drawn to a statewide or multi-state territory exceeds what §§ 28-2-704 and 28-2-705 authorize, and outside the exceptions the covenant falls back to the § 28-2-703 baseline and its partial-restraint analysis .
14. No Conflicting Obligations
Employee represents that performing duties for Employer and complying with this agreement does not conflict with any prior agreement, court order, or legal obligation binding on Employee. Employee must promptly disclose to Employer any potential conflict that arises during employment.
15. Employer-Initiated Termination and Enforcement
Employer will not seek to enforce a restrictive covenant against Employee after a layoff, nonrenewal, or termination without cause, except in response to Employee's use of Employer's Trade Secrets, customer relationships, or proprietary information.
Drafting Note Enforcement after an employer-initiated separation
In Montana the manner of separation does outcome-level work: under Wrigg, the disfavor of restraints heightens when an employer chooses to end the employment relationship and still seeks to enforce the covenant, so an employer normally lacks a legitimate business interest in enforcement after a layoff, nonrenewal, or termination without cause . The exception is conduct-based and employer-proven — whether the former employee used trade secrets, customer relationships, or proprietary information for an unfair advantage — and an enforcement notice sent after an employer-initiated separation runs into the same rule absent that showing . A termination definition that lumps resignation, dismissal, and expiration together buries the single fact most likely to decide enforceability, so a covenant that records the separation type keeps the posture visible on the face of the agreement.
16. Notice to Future Employers and Other Third Parties
Employer may disclose obligations then in effect under this agreement to a prospective employer or business associate of Employee if Employer reasonably believes Employee may breach those obligations. Employee consents to such disclosure.
17. Tolling During Breach
The Restricted Period for a breached covenant is extended by the duration of the breach, up to a maximum extension equal to the original Restricted Period.
18. Remedies
Employee acknowledges that a breach of this agreement may cause Employer irreparable harm for which money damages would be inadequate, and Employer may seek injunctive or other equitable relief in addition to any other remedies available at law. Any attorney-fee award under this agreement applies on a mutual, prevailing-party basis.
19. Distinct, Severable Promises
Each restrictive covenant in this agreement is a separate obligation. If any provision is found unenforceable, the remaining provisions remain in full force and effect.
Drafting Note Distinct severable promises over reformation
A savings or reformation clause does not rescue an overbroad Montana restraint, because Montana courts construe restrictive covenants strictly and void an overbroad restraint outright rather than narrowing it into a lawful one . The structural protection the state supplies is § 28-2-604: where a contract has several distinct objects, at least one lawful and one unlawful, it is void as to the unlawful object and valid as to the rest — a cleanup rule for distinct promises, not a repair shop for a single aggressive clause . Separate confidentiality, trade-secret, customer, repayment, and competition provisions, each sized to a lawful scope at the outset, leave the lawful promises standing on their own if a restraint fails.
20. Survival and Expiration of Each Covenant
Each restrictive covenant in this agreement survives the termination of Employee's employment for the Restricted Period specified in Cover Terms. Obligations under the Confidential Information and Trade Secret Protection section survive for the Trade Secrets Duration specified in Cover Terms to the extent they relate to trade secrets, and for the Other Confidential Information Duration specified in Cover Terms for other Confidential Information. All other provisions survive to the extent necessary to enforce rights that arose during employment.
21. Assignment and Successors
Employee may not assign this agreement or any rights or obligations under it. Employer may assign this agreement to any affiliate, successor, or acquirer of all or substantially all of Employer's business or assets. Any assignee or successor takes this agreement subject to all limitations and conditions applicable to Employer and acquires no greater rights than Employer holds under it. This agreement is binding on and inures to the benefit of the parties and their respective heirs, successors, and permitted assigns.
22. Governing Law, Venue, and Dispute Process
This agreement is governed by the law listed in Cover Terms. Disputes will be resolved in the courts of the Governing Law state, subject to non-waivable rights under applicable law.
23. Entire Agreement, Amendment, Waiver, and Electronic Signatures
This agreement constitutes the entire agreement between the parties regarding its subject matter and supersedes all prior agreements, understandings, and negotiations on this subject. This agreement may be amended only in writing signed by both parties, and a mid-employment amendment that adds or expands a restrictive covenant is supported by its own independent consideration. A party's failure to enforce any provision does not waive that party's right to enforce it later. This agreement may be executed in counterparts, including by electronic signature, each of which is an original.
Signatures
By signing this agreement, each party acknowledges and agrees to the restrictive covenant obligations above. Employee confirms having read and understood each provision, including the Cover Terms.
Employer
Employer: [Legal name of the entity that employs the employee]
Signature:
Signatory Name: [Full name of the authorized signatory signing for the employer]
Title: [Title of the authorized signatory signing for the employer]
Date:
Employee
Signature:
Print Name: [Full legal name of the employee]
Date: