Employee Restrictive Covenant Agreement
Cover Terms
The terms below are incorporated into and form part of this agreement.
| Employer | [Legal name of the employer] |
| Employee | [Full legal name of the employee] |
| Employee Title / Position | |
| Effective Date | [Effective date of this agreement] |
| Governing Law | Hawaii |
| Employer Is a Technology Business (Hawaii) | false |
| Confidentiality | |
| Trade Secrets Duration | Perpetual |
| Other Confidential Information Duration | 24 months |
| Employee Non-Solicitation | |
| Duration | 24 monthsMarket benchmark 24 months · modal of 67 filed agreementsReference only — not part of this agreement. Hawaii fixes no statutory maximum. Length of time is one of the factors a court examines under the Traeger reasonableness test; the period should be the shortest the workforce-stability interest credibly requires. 24 months matches the modal employee non-solicit term observed in benchmarked, publicly-filed employee agreements; it is offered as a market reference, not a statutory benchmark, and counsel should shorten toward 12 months or less where the interest is exhausted sooner.
|
| Customer Non-Solicitation | |
| Duration | 12 monthsMarket benchmark 12 months · modal of 67 filed agreementsReference only — not part of this agreement. Hawaii fixes no statutory maximum; duration is weighed for reasonableness under the Traeger factors. 12 months is the lighter side of the near-even 12/24-month split observed in benchmarked, publicly-filed employee agreements — a conservative starting point tied to the near-permanence of the customer relationship the covenant protects, for counsel to shorten or justify.
|
| Non-Competition | |
| Duration | 12 monthsMarket benchmark 12 months · modal of 70 filed agreementsReference only — not part of this agreement. Hawaii imposes no statutory maximum duration, but length of time is one of the Traeger reasonableness factors and a reasonable period is a condition of the statutory covenant framework. 12 months matches the modal non-compete term observed in benchmarked, publicly-filed employee agreements — a conservative starting point for counsel to shorten or justify against the specific protected interest, not a statutory safe harbor.
|
| Restricted Territory | the geographic area in which Employee provided services |
| Competitive Business | [Description of the business activities that constitute competition with the employer.] |
| Specified Competitors | |
| No Business with Covered Customers | |
| Duration | 12 months |
| 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.
“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 trade secrets, genuinely confidential information, special customer relationships, workforce stability, and specialized training that provides skills beyond those of a general nature when combined with one or more of those other interests.
“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 actively initiate contact with a person or entity in order to induce, encourage, or provide Confidential Information to that person or entity for the purpose of diverting business away from Employer or of recruiting a Covered Employee. Solicit requires an active initiation of contact and does not include responding to general advertisements or unsolicited inquiries not initiated by Employee, and the mere fact that a former coworker terminates employment and later joins Employee's new venture does not by itself constitute Soliciting that coworker.
“Trade Secrets” means Employer's non-public information that derives independent economic value from not being generally known or readily ascertainable and that Employer takes reasonable measures to keep secret.
Drafting Note Active solicitation
A Hawaii solicitation covenant written as no-contact, no-service, or no-acceptance language reaches conduct that falls outside solicitation: Gagnon frames solicitation around active initiation of contact, so a covenant sweeping in passive dealing is a broader restraint that still must clear the legitimate-ancillary-purpose screen of HRS 480-4 and is exposed where it does not .
2. Recitals and Legitimate Ancillary Purpose
Each restrictive covenant in this agreement protects one or more of Employer's Protected Interests and is reasonably limited in scope and duration.
Drafting Note The legitimate-ancillary-purpose screen
Every restraint in a Hawaii agreement passes through HRS chapter 480's antitrust screen, not ordinary contract reasonableness alone: HRS 480-4(a) makes every in-state restraint of trade illegal, and 480-4(c) makes a covenant lawful only where it is ancillary to a legitimate purpose not violative of chapter 480 and its effect is not substantially to lessen competition or to tend to create a monopoly . A covenant that satisfies every reasonableness factor is still unenforceable unless it is ancillary to such a purpose, and preventing competition is not one, so a restraint whose real work is blocking ordinary competition fails no matter how tightly its duration and territory are drawn . The purpose has to be a recognized protectable interest — trade secrets, genuinely confidential information, special customer relationships, workforce stability for an employee-solicitation covenant, or specialized training combined with other protectable factors — proven for each covenant on its own record rather than assumed, and no particular form or timing of consideration substitutes for that showing; binding a non-compete to named competitors is one way to show it reaches a specific interest against specific rivals rather than the market at large .
3. Timing and Right to Consult Counsel
Employee has had the opportunity to review this agreement and to consult with an attorney of Employee's choosing before signing. Employer provides Employee's employment or continued employment, compensation, and access to Employer's Confidential Information and Trade Secrets in exchange for Employee's covenants. This agreement is effective as of the Effective Date listed in Cover Terms.
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.
Drafting Note Confidential information scope
A confidentiality label pinned to ordinary market knowledge does not carry the covenant. In Gagnon the claimed confidential-interest theory failed where similarly situated workers were not restricted, the information was shared more broadly, and no trade-secret violation was shown, so a covenant resting on that kind of record is unenforceable rather than merely narrowed .
Drafting Note Trade-secret alternatives
An NDA drafted to do non-compete work does not hold up as one. Hawaii preserves trade-secret and contract remedies, but Gagnon rejected a confidentiality theory where the record showed no real protected information and no trade-secret violation, so a confidentiality covenant that operates as a practical ban on ordinary competition falls back into the HRS 480-4(a) antitrust baseline rather than standing as trade-secret protection .
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; (d) testifying truthfully in legal proceedings; (e) making any disclosure required by law, court order, or a government investigation, with notice to Employer where lawful; or (f) filing a sealed complaint in court using Confidential Information without liability. Pursuant to the Defend Trade Secrets Act (18 U.S.C. section 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, 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, and the mere fact that a Covered Employee terminates employment and later joins Employee's new venture is not by itself a violation. This covenant does not apply if Employer is a technology business as indicated in Cover Terms.
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 restriction applies only when Employee actively initiates the contact.
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. Passive Public Holdings are permitted. This covenant does not apply if Employer is a technology business as indicated in Cover Terms.
11. Non-Competition Narrowed to Specified Competitors
Where Employer has identified specific competitors in Cover Terms under Specified Competitors, the non-competition covenant is limited to those Specified Competitors.
12. 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.
13. 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.
14. Technology-Business Exclusion
If Employer is a technology business as indicated in Cover Terms, the non-competition and employee non-solicitation covenants do not apply. The Confidential Information and Trade Secret Protection covenant remains in effect.
Drafting Note Technology-business employees
A broad employment noncompete or employee nonsolicit imposed on a Hawaii technology-business employee is void and of no force and effect, because HRS 480-4(d) preserves only the HRS 480-4(c)(4) trade-secret path for a covered employee. A restraint built around actual trade-secret use is the one that survives; anything reaching further falls with the statutory ban. Because coverage keys to the employer's line of business rather than the worker's title, a successor whose revenue mix makes it a technology business brings the same ban to a covenant it inherits .
15. Sale-of-Business Covenant Limits
If Employee enters into a covenant as the transferor of a business in connection with its sale, that covenant is limited to the area and period stated in the applicable sale agreement.
Drafting Note Sale covenant scope
A Hawaii sale covenant is measured against the goodwill and competitive risk actually transferred. HRS 480-4(c)(1) permits the transferor restraint only within a reasonable area and a reasonable period, and Traeger holds the restraint to no more than the protection needed, so a sale covenant sized beyond the goodwill it protects is exposed as unreasonable .
16. Physician Covenants
No separate physician-specific restriction applies under this agreement.
17. 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.
18. 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 only where Employer has a reasonable belief that Employee may breach an obligation then in effect under this agreement.
19. Extension During Breach
If Employee breaches any restrictive covenant in this agreement, Employer may seek to extend the Restricted Period for that covenant by the period of the breach to the extent permitted by law.
Drafting Note Tolling
A tolling or extension-on-breach clause is untested in the staged Hawaii sources, so its enforcement cannot be assumed. Because such a clause extends the effective restricted period, it is measured under the same HRS 480-4 antitrust and reasonableness limits that govern the covenant itself, and an extension pushing the covenant past a reasonable duration is exposed on the same ground the underlying restraint would be .
20. 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.
Drafting Note Statutory fee and treble-damages exposure
Because the covenants in a Hawaii agreement are themselves analyzed as restraints of trade under chapter 480, a covenant that fails the HRS 480-4 framework is not merely unenforceable but a potential source of chapter 480 liability for the party pressing it. HRS 480-13(a) lets a person injured in business or property by anything the chapter forbids recover the greater of $1,000 or threefold damages plus reasonable attorney fees and costs on a plaintiff's judgment, and fees and costs again on a plaintiff's injunction decree — a plaintiff-focused, one-way regime the parties cannot draft around, and one that applies regardless of any contractual fee provision . HRS 480-2 separately declares unfair methods of competition unlawful and lets any person sue on that theory, so warning a future employer off an employee on the strength of a covenant that fails the restraint-of-trade screen carries its own exposure .
21. Severability
If any provision of this agreement is found to be unenforceable, the remaining provisions remain in full force and effect.
Drafting Note Narrowing reliance
A Hawaii restriction stands on the minimum scope its protected interest supports, not on the expectation that a court will rescue an overbroad one. A court may trim an injunction to the contract and record before it, but Gagnon shows that a covenant lacking a legitimate ancillary purpose fails outright rather than being saved by narrower wording, so scope drawn beyond the interest is exposed rather than reformed .
22. 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 for that covenant. Obligations under the Confidential Information and Trade Secret Protection section survive 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.
23. 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 takes subject to this agreement's existing limitations. This agreement is binding on and inures to the benefit of the parties and their respective heirs, successors, and permitted assigns.
24. Governing Law, Venue, and Dispute Process
This agreement is governed by the law listed in Cover Terms. For a Hawaii employment relationship the parties select Hawaii law and a Hawaii forum. Disputes will be resolved in the courts of the Governing Law state, subject to non-waivable rights under applicable law.
25. 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 employer]
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: