> **This is a fill-in template, not legal advice.** Replace every `[bracketed field]` > with your own value. `[[Defined Terms]]` (double brackets) are glossary markers, not blanks. > Token-only (programmatic-fill) version: ./template.md # 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 : [Employee job title or position (optional)] 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 : 12 months Customer Non-Solicitation Duration : 12 months Non-Competition Duration : 12 months 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 : [Optional named list of specific competitors. In a state whose courts refuse to credit competition-blocking as a purpose, binding the covenant to named competitors is the cleanest way to show it protects a specific interest against specific rivals rather than fencing the market.] No Business with Covered Customers Duration : 12 months Non-Investment Duration : 12 months Non-Disparagement Duration : 24 months ## Standard Terms ### 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 legitimate business interests in its trade secrets, its genuinely confidential information, its special customer relationships, its workforce stability, and specialized training it provides that gives skills beyond those of a general nature when combined with one or more of those other factors — the vocabulary Hawaii recognizes as protectable under 7's Enterprises, Inc. v. Del Rosario, 111 Haw. 484, 143 P.3d 23 (2006). Preventing competition itself is not a Protected Interest. [[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. Consistent with Prudential Locations, LLC v. Gagnon, 151 Haw. 136, 509 P.3d 1099 (2022), 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 information that qualifies as a trade secret under the Hawaii Uniform Trade Secrets Act, Haw. Rev. Stat. chapter 482B, and, to the extent applicable, the federal Defend Trade Secrets Act, 18 U.S.C. section 1839. ### Recitals and Legitimate Ancillary Purpose Employer and Employee acknowledge that Hawaii measures each restrictive covenant against an antitrust statute, not contract reasonableness alone: under Haw. Rev. Stat. section 480-4(a) every contract in restraint of trade or commerce in the State is illegal, and under Haw. Rev. Stat. section 480-4(c) a restrictive covenant is 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 in any line of commerce in any section of the State. Each restrictive covenant in this agreement is intended to be ancillary to a legitimate purpose — the protection of one or more of Employer's Protected Interests — and no broader than required to protect that interest. The parties acknowledge that, consistent with Prudential Locations, LLC v. Gagnon, 151 Haw. 136, 509 P.3d 1099 (2022), a covenant is unenforceable unless it is ancillary to such a legitimate purpose even if it satisfies the Traeger three-factor reasonableness test, and that preventing competition is not a legitimate ancillary purpose. Each covenant is also intended to impose no undue hardship on Employee and to cause no injury to the public, consistent with the reasonableness factors restated in 7's Enterprises, Inc. v. Del Rosario, 111 Haw. 484, 143 P.3d 23 (2006). ### 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. No Hawaii statute conditions the enforceability of these covenants on a particular form or timing of consideration, but the parties record the timing of signing and the benefits exchanged — Employee's employment or continued employment with Employer, the compensation Employer provides, and Employee's access to Employer's Confidential Information and Trade Secrets — as evidence that the process was fair and that the covenants serve the legitimate ancillary purpose required by Haw. Rev. Stat. section 480-4. This agreement is effective as of the Effective Date listed in Cover Terms. ### 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 in perpetuity, 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. This trade-secret protection is the covenant Hawaii most reliably credits: under Haw. Rev. Stat. section 480-4(c)(4) a covenant by an employee not to use Employer's Trade Secrets in competition may run during employment or after its termination, but only within such time as may be reasonably necessary for the protection of Employer and without imposing undue hardship on Employee. It protects information, not market position. Trade secrets are protected under Hawaii law, including the Hawaii Uniform Trade Secrets Act, Haw. Rev. Stat. chapter 482B, whose remedies do not displace the contractual remedies in this agreement, whether or not based upon misappropriation of a trade secret (Haw. Rev. Stat. section 482B-8). ### 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. ### 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. Because the Hawaii Uniform Trade Secrets Act preserves contractual remedies whether or not a claim is based on misappropriation (Haw. Rev. Stat. section 482B-8), this certification is the contractual record Employer relies on independent of any misappropriation claim. ### 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 (Prudential Locations, LLC v. Gagnon). This covenant is a restraint of trade that requires its own legitimate ancillary purpose — Employer's interest in workforce stability — under Haw. Rev. Stat. section 480-4(a); workforce stability does not prove itself. If Employer is a technology business within the meaning of Haw. Rev. Stat. section 480-4(d), this covenant is prohibited, void, and of no force and effect against Employee, and the Hawaii Statutory Gates section governs. ### 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 is a restraint of trade that requires a legitimate ancillary purpose under Haw. Rev. Stat. section 480-4(a); it protects Employer's legitimate interest in its special relationships with specific customers, vendors, referral sources, and business partners, and its enforcement turns on proof that Employee actively initiated the contact, consistent with the active-initiation standard of Prudential Locations, LLC v. Gagnon. It is bound to the Covered Customers class and the Restricted Period. ### 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. This restriction is broader than non-solicitation because it reaches the passive conduct that Hawaii's solicitation standard deliberately excludes (Prudential Locations, LLC v. Gagnon holds that solicitation requires an active initiation of contact). It is therefore a harsher restraint of trade that requires its own legitimate ancillary purpose under Haw. Rev. Stat. section 480-4(a) and must be justified against a specific Protected Interest rather than treated as a stronger flavor of the non-solicit. ### 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 is available only on the terms of Hawaii's antitrust statute: it is 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 (Haw. Rev. Stat. section 480-4(a), (c)), and it is unenforceable — even if it satisfies every Traeger reasonableness factor — unless it is ancillary to such a legitimate purpose, because preventing competition is not one (Prudential Locations, LLC v. Gagnon). Its time, place, and scope are drawn no broader than required to protect a specific Protected Interest. If Employer is a technology business within the meaning of Haw. Rev. Stat. section 480-4(d), this covenant is prohibited, void, and of no force and effect against Employee, and the Hawaii Statutory Gates section governs. ### 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 rather than the open-ended Competitive Business definition. Binding the restraint to named competitors is the cleanest way to show that it protects a specific Protected Interest against specific rivals rather than fencing the market, which matters in a state whose courts refuse to credit competition-blocking as a legitimate purpose (Prudential Locations, LLC v. Gagnon). ### 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 restriction primarily targets active or material ownership in private competitors. Passive Public Holdings are permitted. Because this covenant restrains active roles at and material participation in a Competitive Business, it is a restraint of trade analyzed under the same Haw. Rev. Stat. section 480-4 ancillary-purpose framework and Traeger reasonableness factors as the non-compete; it must serve a specific Protected Interest, and an investment restraint with no carve-out and no end date adds hardship and anticompetitive effect with no protected interest gaining anything. ### 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. ### Hawaii Statutory Gates: Technology-Business Ban and Trade-Secret Fallback Notwithstanding any other provision of this agreement, if Employer is a technology business within the meaning of Haw. Rev. Stat. section 480-4(d) — a trade or business that derives the majority of its gross income from the sale or license of products or services resulting from its software development or information technology development, or both, excluding any trade or business considered by standard practice part of the broadcast industry and any franchised or chartered telecommunications carrier as defined in Haw. Rev. Stat. section 269-1 — then the non-competition covenant and the employee non-solicitation covenant in this agreement are prohibited, void, and of no force and effect against Employee, except for the trade-secret covenant preserved by Haw. Rev. Stat. section 480-4(c)(4). Coverage keys to Employer's line of business, not to Employee's job title. In that case the only restrictive-covenant path this agreement leaves in force against Employee is the Confidential Information and Trade Secret Protection covenant, drawn to the Haw. Rev. Stat. section 480-4(c)(4) shape. Whether or not Employer is a technology business, every covenant in this agreement remains subject to the antitrust screen of Haw. Rev. Stat. section 480-4: it is lawful only when ancillary to a legitimate purpose not violative of chapter 480, its effect is not substantially to lessen competition or to tend to create a monopoly, and preventing competition is not itself a legitimate purpose (Prudential Locations, LLC v. Gagnon). A covenant that fails this framework is not merely unenforceable but a potential source of chapter 480 liability for the party enforcing it, and Haw. Rev. Stat. section 480-2 separately declares unfair methods of competition unlawful and allows any person to sue on that theory. ### Sale-of-Business Covenant Limits If any covenant in this agreement is entered into by Employee as the transferor of a business in connection with the sale of that business, that covenant is limited to a reasonable area and a reasonable period of time in connection with the sale, and remains subject to the overriding condition of Haw. Rev. Stat. section 480-4(c)(1) that it be ancillary to a legitimate purpose not violative of chapter 480 and not substantially lessen competition or tend to create a monopoly. The covenant is sized to the goodwill and competitive risk actually transferred, and a court examines geographical scope, length of time, and breadth of the restriction and will find it unreasonable if it is greater than required for the protection of the person for whose benefit it is imposed, imposes undue hardship on the person restricted, or carries a benefit outweighed by injury to the public (7's Enterprises, Inc. v. Del Rosario). ### Physician Covenants Hawaii has no physician-specific restrictive-covenant statute. A covenant restricting a physician passes through the same restraint-of-trade framework as any other covenant in this agreement: it must be ancillary to a legitimate purpose not violative of chapter 480, must not substantially lessen competition, and must be reasonable in scope under the Traeger factors (Haw. Rev. Stat. section 480-4; 7's Enterprises, Inc. v. Del Rosario). This section states that treatment expressly so the question stays reviewable rather than leaving the parties to assume a special regime exists. ### 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, so that any incoming covenant can be tested against Hawaii's restraint-of-trade screen at the outset rather than after a dispute arises. ### 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 a covenant that actually survives the Hawaii gates in this agreement. Employer acknowledges that warning a future employer off Employee based on a covenant that fails the Haw. Rev. Stat. section 480-4 restraint-of-trade screen, or that the technology-business ban voids, may expose Employer to liability, including under Haw. Rev. Stat. section 480-2, which declares unfair methods of competition unlawful and allows any person to bring an action on that theory. ### 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. The parties acknowledge that whether a covenant period pauses during breach or enforcement litigation is an open question under Hawaii law that the staged authorities do not resolve, and that any such extension lengthens the actual restraint and must therefore be justified under the same legitimate-ancillary-purpose and reasonable-duration limits of Haw. Rev. Stat. section 480-4(c) and the Traeger factors that govern the covenant itself (7's Enterprises, Inc. v. Del Rosario). Neither party assumes a court will enforce this extension. ### 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. Each party acknowledges the statutory backdrop the parties cannot draft around: under Haw. Rev. Stat. section 480-13(a) a person injured in the person's business or property by anything forbidden or declared unlawful by chapter 480 may sue for the greater of $1,000 or threefold damages, is awarded reasonable attorney's fees together with the costs of suit on a plaintiff's judgment, and is awarded fees and costs on a plaintiff's injunction decree. Because the covenants in this agreement are themselves analyzed as restraints of trade under chapter 480, a covenant that fails the Haw. Rev. Stat. section 480-4 framework is not merely unenforceable but a potential source of fee-bearing, treble-damages exposure for the party pressing it; this statutory regime is plaintiff-focused, not loser-pays, and applies regardless of any contractual fee provision. ### Drafting to the Protected Interest and Severability Each restrictive covenant in this agreement is drawn at the minimum scope its Protected Interest supports and is intended to be independently enforceable, in separable tiers a court can enforce or strike cleanly. The parties do not rely on any savings or reformation clause to cure an overbroad covenant: the staged Hawaii authorities supply no rule that a court will rewrite an overbroad covenant into an enforceable one. In 7's Enterprises, Inc. v. Del Rosario the court trimmed an injunction back to the covenant's own County of Honolulu limit — correcting enforcement to the contract's terms rather than rewriting the contract — and in Prudential Locations, LLC v. Gagnon a covenant lacking a legitimate ancillary purpose failed outright rather than being saved by narrower wording. If any provision of this agreement is found to be unenforceable, the remaining provisions remain in full force and effect, and each restrictive covenant is intended to be enforceable as written rather than in reliance on judicial revision. ### 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, so that each covenant's clock is independently checkable. 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 and within such time as may be reasonably necessary for the protection of Employer (Haw. Rev. Stat. section 480-4(c)(4)); every other restraint runs only for its own bounded, justified period. All other provisions survive to the extent necessary to enforce rights that arose during employment. ### 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. A successor inherits the Hawaii analysis along with the covenant: the legitimate ancillary purpose is measured against the enforcing business's actual interests, and a successor in a different line of business — for example, one that derives the majority of its income from software development and so becomes a technology business under Haw. Rev. Stat. section 480-4(d) — can change which statutory rules apply. This agreement is binding on and inures to the benefit of the parties and their respective heirs, successors, and permitted assigns. ### Governing Law, Venue, and Dispute Process This agreement is governed by the law listed in Cover Terms, including Haw. Rev. Stat. chapter 480. For a Hawaii employment relationship the parties select Hawaii law and a Hawaii forum, because these covenants are drafted against the chapter 480 framework and the technology-business ban. Disputes will be resolved in the courts of the Governing Law state, subject to non-waivable rights under applicable law. ### 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; the merger clause fixes the four corners the restraint-of-trade analysis will read. This agreement may be amended only in writing signed by both parties, and the parties acknowledge that any amendment that broadens a covenant is a new restraint that must independently satisfy the Haw. Rev. Stat. section 480-4 ancillary-purpose screen. 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: [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: _______________