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 | South Carolina | ||||||||
| Timing and Consideration | |||||||||
| Signed After Employment Began | falseState-law basis falseReference only — not part of this agreement. Defaults to false because many agreements are signed at the outset of employment. If the agreement is signed later, switch this on and identify the separate new value exchanged for the covenants. | ||||||||
| Separate Consideration | |||||||||
| 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 → | ||||||||
| 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. | ||||||||
| Non-Competition | |||||||||
| Duration | 12 monthsState-law basis 12 monthsReference only — not part of this agreement. 12 months sits well inside the presumptively reasonable window for an employee non-compete; restraints of two years or less are presumed reasonable. A term outside the window forfeits the statutory presumption and invites duration reformation, so the tool defaults short. | ||||||||
| Duration (Step-Down Alternative) | 6 months | ||||||||
| Restricted Territory | the geographic area in which Employee provided servicesState-law basis the geographic area in which Employee provided servicesReference only — not part of this agreement. Tied to where Employer actually does competing business. | ||||||||
| Restricted Territory (Step-Down Alternative) | the counties in which Employee actually provided services or serviced customers | ||||||||
| Competitive Business | [Description of the business activities that constitute competition with the employer.] | ||||||||
| Specified Competitors | |||||||||
| 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 | ||||||||
| 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 and the general knowledge, skill, and experience Employee acquired during employment.
“Covered Customers” means customers, vendors, referral sources, and business partners with whom Employee had material contact or for whom Employee had responsibility during the 12 months before termination of employment.
“Covered Employees” means employees with whom Employee 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 Confidential Information, Employer's Trade Secrets, and Employer's goodwill in its customer, vendor, referral-source, and business-partner relationships.
“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, and ending on its stated end date without extension.
“Restricted Territory” means the geographic area described in Cover Terms under Restricted Territory, and, as an alternative narrower restriction the parties agree is separately enforceable on its own terms, the area described in Cover Terms under Restricted Territory (Step-Down Alternative).
“Solicit” means to directly or indirectly contact, approach, induce, or encourage any person or entity for the purpose of diverting business away from Employer, but does not include responding to general advertisements or unsolicited inquiries not initiated by Employee.
“Trade Secrets” means information protected as a trade secret under the South Carolina Trade Secrets Act.
2. Recitals and Protectable Interests
Employer and Employee acknowledge that each restrictive covenant in this agreement is ancillary to a valid employment relationship. Employee will receive access to Employer's Confidential Information and Trade Secrets and will develop customer relationships and goodwill on Employer's behalf. Employer would not provide Employee with access to the Protected Interests absent the protections in this agreement. Employee acknowledges that each covenant is necessary to protect Employer's Protected Interests and is supported by valuable consideration.
Drafting Note The five-factor reasonableness gate
Every covenant in the agreement stands or falls on South Carolina's five-factor test — necessity to protect a legitimate interest, reasonable time and place, no undue harshness on the employee, sound public policy, and valuable consideration. The factors are conjunctive: a covenant that fails any single one is unenforceable whole, and because a non-compete is a disfavored restraint of trade the court construes it strictly against the employer, so ambiguous language — including a defined term like Solicit — is read against the drafter . The same test follows the covenant wherever it goes. A notice to a prospective employer asserting a covenant that cannot clear the test carries interference exposure of its own; an assignee or successor can enforce the covenants only where it actually holds the customer relationships and other protected interests they guard; and a governing-law and venue choice mismatched to where the employee lives and works invites a public-policy challenge to the whole structure.
Drafting Note Employee non-solicit scoped to inducement
An employee non-solicit scoped to inducing a Covered Employee to breach or terminate the employment relationship — leaving references, general advertisements, and non-interfering hiring open — tracks how South Carolina reads the covenant. The state reads it narrowly: Oxman v. Sherman construed an employee covenant as restraining inducement to breach rather than as a blanket bar on ever hiring or seeking the services of those employees . Kept narrow — reaching only Covered Employees during the Restricted Period — it is the lightest restraint in the covenant family and stays no broader than the employer's interest in workforce stability and goodwill. Widened into an all-employee no-hire, it reaches past the recognized interest.
Drafting Note Reasonable scope
A duration or radius copied from another state's form is measured against the wrong market. A South Carolina court will not narrow an overbroad scope to save the covenant, so the territory holds up only where it matches the employee's real customer contacts and the time period stays within what the record can justify .
Drafting Note Duration and territory sized to the role
A non-compete's duration, territory, and step-down alternatives hold up only where they fit the employee's actual role and the employer's actual market — a radius or term imported from another state's form is measured against a market it was never sized to. A territorial scope is unreasonable if it covers an area broader than necessary to protect the employer's legitimate interest , and time and place must each be reasonably limited under the conjunctive test . The optional non-investment covenant is judged the same way — a post-employment restraint under the five factors; its passive-public-holdings carveout leaves ordinary public-market investing open, so its real bite is active or material ownership in private competitors. No South Carolina court will shrink an overdrawn map afterward.
Drafting Note Physician covenants and pending H.4767
South Carolina has no enacted physician statute, so a covenant restraining the practice of medicine is reviewed under the ordinary five-factor test, with patient access to care the likely pressure point on the sound-public-policy factor . For a physician hire, a narrow radius and a short term preserve patient access and continuity of care, and the deal prices against H.4767: the pending Physician Noncompete Contract Prohibition Act would declare physician noncompete clauses against the public policy of the State, and as of this review it had passed the House and drawn a favorable Senate committee report without being enacted . A covenant drafted as if the bill had already become law overreaches the current rule, and the bill's status can move before signing.
3. Timing, Consideration, and Employee Acknowledgements
This agreement is effective as of the Effective Date listed in Cover Terms and is supported by valuable consideration. If this agreement is signed at the outset of employment, the offer and commencement of employment is the consideration for the covenants in it. If, as indicated in Cover Terms under Signed After Employment Began, this agreement is entered into after Employee's employment has already begun, the separate consideration described in Cover Terms under Separate Consideration — such as a raise, bonus, promotion, or change in status — is provided in addition to continued employment specifically in exchange for these covenants. Employee acknowledges having had the opportunity to consult with independent legal counsel before signing this agreement.
Drafting Note Mid-employment consideration
Where the employee signs after employment has already begun, the covenant needs a Separate Consideration cover term — a raise, bonus, promotion, or change in status — because continued employment alone will not support it. South Carolina requires it: a covenant entered into after the inception of employment needs separate consideration beyond continued at-will employment , and an unchanged role supplies none — in Poole the employee's duties, position, and salary were left unchanged . Consideration establishes only one of the five factors: a well-documented raise does nothing for a covenant that fails on legitimate interest, time and place, harshness, or public policy.
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 the period specified in Cover Terms under Trade Secrets Duration, and in any event for as long as the information remains a trade secret. Employee's obligations regarding other Confidential Information continue only for the finite period specified in Cover Terms under Other Confidential Information Duration. This section does not restrict Employee's use of the general knowledge, skill, and experience Employee acquired during employment.
Drafting Note Trade-secret strategy
Information the South Carolina Trade Secrets Act already covers does not need a non-compete to protect it. A focused confidentiality and trade-secret strategy reaches misappropriation without the strict-construction risk that attaches to a covenant not to compete .
Drafting Note The statutory trade-secret backstop
The confidentiality drafting does not have to carry the entire trade-secret regime — the South Carolina Trade Secrets Act runs underneath it. Every employee already owes a statutory duty, independent of and in addition to any agreement, to refrain from using or disclosing the employer's trade secret , and that protection endures until the secret is disclosed or discovered by proper means . Trade-secret obligations that run for as long as the information stays a trade secret, rather than expiring on a fixed cap, track that statutory protection, and the return-of-property, deletion, and certification mechanics preserve the secrecy the statute's protection depends on.
Drafting Note Nondisclosure duration
An open-ended NDA that bars an employee from doing similar work indefinitely draws non-compete scrutiny. Where a nondisclosure provision functions as a non-compete, South Carolina courts apply that scrutiny — including a reasonable time limit — and an unlimited duration can void it .
Drafting Note The non-trade-secret confidentiality term
Non-trade-secret Confidential Information given a finite duration, with the employee's general knowledge, skill, and experience carved out of the definition, stays a genuine confidentiality clause. Run open-ended, it can collapse into a functional non-compete: a nondisclosure provision with the effect of a covenant not to compete requires a reasonable time restriction , and untimed provisions operating that way violated South Carolina public policy , whereas a genuine confidentiality clause scoped to protectable information is not a restraint of trade at all . An Other Confidential Information Duration stretched toward forever converts the clause into an untimed functional non-compete.
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 applicable law, including Section 7 of the National Labor Relations Act (29 U.S.C. § 157); (d) testifying truthfully in legal proceedings or making any disclosure required by law, court order, or a government investigation; 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.
7. Non-Solicitation of Employees
During the Restricted Period, Employee must not Solicit or induce any Covered Employee to breach or terminate an employment relationship with Employer. This restriction does not prohibit Employee from providing a professional reference upon request, from hiring a person who responds to a general advertisement not directed specifically at Employer's employees, or from seeking or accepting the services of a person where Employee has not interfered with that person's employment relationship with Employer.
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. This covenant does not restrict Employee with respect to customers, vendors, referral sources, or business partners Employee never serviced or contacted.
Drafting Note Customer scope
An any customer on our books non-solicitation clause reaches too far. A restriction limited to customers the departing employee actually serviced or contacted within a defined look-back period protects a legitimate interest; a blanket customer ban is treated as an unenforceable restraint on ordinary competition .
Drafting Note Customer covenants bound to covered customers
A customer non-solicit — and the optional no-business covenant — bound to Covered Customers only, the customers, vendors, referral sources, and business partners the employee had material contact with during the stated look-back period, tracks what the case law rewards: a covenant confined to customers the employee had contact with during his last twelve months of employment withstood an overbreadth challenge , while barring solicitation of customers the employee never serviced protected no legitimate interest , and an employer is not entitled to enforce an agreement preventing ordinary competition . The no-business covenant bites harder — it reaches even customer-initiated dealings — so its Covered Customers limit is what keeps it inside the legitimate-interest and harshness factors; loosened, it forfeits that protection. A tight customer covenant paired with the confidentiality and trade-secret protections is often a stronger, more readily enforceable instrument than a broad non-compete.
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-Competition
During the Restricted Period, Employee must not engage in, be employed by, consult for, or have an active ownership interest in any Competitive Business within the Restricted Territory. This covenant is included to protect Employer's Protected Interests — its Confidential Information, Trade Secrets, and customer goodwill — and not to restrain ordinary competition, and its duration and territory are sized to Employee's actual role and Employer's actual market. If Employer has identified specific competitors in Cover Terms under Specified Competitors, this covenant is limited to those named competitors. Passive Public Holdings are permitted.
The duration and territory for this covenant are the primary Duration and Restricted Territory stated in Cover Terms.
11. 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. Passive Public Holdings are permitted.
12. 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 rights protected under Section 7 of the National Labor Relations Act.
13. 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, including any restrictive covenant with a former employer. Employee must promptly disclose to Employer any potential conflict that arises during employment.
14. Notice to Future Employers and Other Third Parties
Employer may disclose the existence and terms of this agreement to any prospective employer or business associate of Employee if Employer has a reasonable belief that Employee may breach this agreement. Employee consents to this disclosure.
15. No Extension of the Restricted Period
Each Restricted Period is a fixed, definite term that runs from the date Employee's employment ends and expires on its stated end date. No Restricted Period is extended or tolled by any period of breach, dispute, or litigation.
Drafting Note Fixed end date and open-ended tolling
A Restricted Period stated as a fixed, definite term that expires on its stated end date, with no tolling bolted on to extend it, matches where South Carolina points: extending a covenant's time period past its stated expiration would be against public policy, because it would be arbitrary and would let a court disrupt the parties' private right to contract , and no South Carolina decision endorses automatic judicial tolling during a breach. A pause-the-clock term drafted as a separate, reasonable term tied to the actual duration of the breach still has to satisfy the reasonably-limited-in-time factor ; an open-ended or indefinite extension does not.
16. Remedies
Employee acknowledges that a breach of this agreement may cause Employer irreparable harm for which money damages would be inadequate. Employer may seek injunctive or other equitable relief in addition to any other remedies available at law, including statutory remedies for trade-secret misappropriation.
17. Enforceability and Severability
If any provision of this agreement is found to be unenforceable, the remaining provisions remain in full force and effect.
18. Sale-of-Business Covenants
The covenants in this agreement are given in connection with Employee's employment. Any covenant given in connection with a sale of a business is outside the scope of this agreement and is to be set out in the transaction documents for that sale.
Drafting Note Sale-of-business covenants in the transaction documents
A sale-of-business covenant routed through this employment form loses the relaxed review that helps sale covenants — that review exists only because the covenant is part of a business sale. Covenants executed in conjunction with the sale of a business are scrutinized at a more relaxed level than covenants executed in conjunction with employment contracts , and under that standard the sale-related territorial restriction in Palmetto Mortuary was upheld as reasonable and enforceable . That forgiving framework does not travel to a covenant a worker signs to keep or take a job. A genuine sale covenant belongs in the transaction documents — given by the seller and supported by transaction consideration; run through this employment form, it risks forfeiting the more favorable review.
19. 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 and expires on its own stated end date. Each covenant is self-contained and is read and enforced on its own terms. Obligations under the Confidential Information and Trade Secret Protection section survive to the extent they relate to Trade Secrets, for as long as the information remains a trade secret. All other provisions survive to the extent necessary to enforce rights that arose during employment.
20. 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. This agreement is binding on and inures to the benefit of the parties and their respective heirs, successors, and permitted assigns.
21. 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.
22. 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. 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: