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 | Mississippi |
| 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. Mississippi sets no statutory cap on duration, and no staged Mississippi authority speaks specifically to employee no-poach covenants, so this restraint stands on ordinary reasonableness under the Texas Road Boring three-interest balance. 24 months matches the modal employee non-solicit term observed in benchmarked, publicly-filed employee agreements; 12 months is the common lighter alternative, and counsel should size the term to the employer's actual protectable interest.
|
| Customer Non-Solicitation | |
| Duration | 12 monthsMarket benchmark 12 months · modal of 67 filed agreementsReference only — not part of this agreement. 12 months is the most common customer non-solicit term in benchmarked, publicly-filed employee agreements, edging out 24 months by only a narrow margin. Mississippi sets no statutory cap; a customer non-solicit maps directly onto the customer-goodwill interest and is often the employer's sturdiest restraint here, because Mississippi recognizes that a properly drafted clause reaching former customers can be reasonable and enforceable (Kennedy). Counsel should size the term to the actual customer relationships protected.
|
| Non-Competition | |
| Duration | 12 monthsMarket benchmark 12 months · modal of 70 filed agreementsReference only — not part of this agreement. 12 months matches the modal non-compete term observed in benchmarked, publicly-filed employee agreements — a common, conservative pick rather than a Mississippi ceiling (Mississippi imposes no statutory cap on duration). Courts weigh time, territory, and activity together under the three-interest balance, so there is no safe-harbor number; counsel should size the default to the actual role and market rather than copy from another form. Note that the restricted period runs from the contractual termination date and a court will not extend it at the back end absent an express extension clause (Frierson).
|
| 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 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 Protected Interests, including its Confidential Information, its Trade Secrets, its goodwill in its customer, vendor, referral-source, and business-partner relationships, and its investment in specialized training provided to Employee.
“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, subject to any express extension under the Tolling During Breach section.
“Restricted Territory” means the geographic area described in Cover Terms under Restricted Territory.
“Solicit” means to directly or indirectly contact, approach, induce, encourage, or provide Confidential Information to 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 that derives independent economic value from not being generally known or readily ascertainable and that is the subject of efforts reasonable under the circumstances to maintain its secrecy, as protected by the Mississippi Uniform Trade Secrets Act and the federal Defend 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 those Protected Interests absent the protections in this agreement.
Drafting Note The three-interest balance
Mississippi has no general non-compete statute, so every covenant in the agreement stands or falls on the balance of three interests — the rights of the employer, the rights of the employee, and the rights of the public — and the employer carries the burden of proving the restraint reasonable in time, territory, and restrained activity . A court treats these covenants as restraints on trade and individual freedom, so they are disfavored and any ambiguity is construed strictly against the drafting employer , weighed to maintain a reasonable balance between the employer's protection and the employee's freedom to work . A covenant that cannot be tied to customer goodwill, confidential information, or another protectable interest fails that test — the investment restraint is the hardest of all to justify. Trade-secret protection, in turn, survives only on the reasonable efforts that surround it: the return, deletion, and certification of confidential material form the contemporaneous record an employer would need if protected material later surfaced at a competitor.
Drafting Note Scope sized to the employee's real influence
A territory tied to the geographic area in which the employee actually provided services, and sized to the employee's real influence rather than the employer's whole footprint, is the defensible one. A statewide restraint failed where the employee's protectable relationships were limited to one local area , while a 250-mile radius held for a telephonic business whose market would have justified even a nationwide limit . There is no statutory cap on duration or territory; a court weighs time, territory, and restrained activity together, so a restraint measured to where the employee worked and whom they influenced fares best. Naming the specific Specified Competitors in Cover Terms, rather than leaving the restrained activity open-ended, is strong evidence it reaches no further than required.
3. Timing, Consideration, and Employee Acknowledgements
The parties acknowledge that this agreement is supported by adequate consideration. If Employee is an existing at-will employee, the consideration for Employee's covenants is Employer's continuation of Employee's employment; if this agreement is signed at the outset of employment, the consideration is the offer and commencement of employment. Employee represents that Employee is not a minor and has the legal capacity to enter this agreement. Employee acknowledges having had the opportunity to consult with independent legal counsel before signing this agreement, and that the restrictions in this agreement are appropriate to protect Employer's Protected Interests. This agreement is effective as of the Effective Date listed in Cover Terms.
Drafting Note Consideration record
The consideration question does not disappear in Mississippi merely because continued employment can suffice; the agreement is still construed strictly, and the circumstances of signing are scrutinized, so a documented tie to the employment relationship — paired with fresh consideration where practical — stands on firmer ground . For an existing at-will employee, continued employment is itself the consideration, and no separate payment, raise, or promotion is needed to support the covenant . Adequate consideration, however, only supports the covenants — it does not make them reasonable, and each covenant must still independently satisfy the reasonableness balance on time, territory, and restrained activity.
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 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 confidentiality obligation applies independent of any restrictive covenant in this agreement and does not restrict Employee's use of the general knowledge, skill, and experience Employee acquired during employment.
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 (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, 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. Except as expressly provided elsewhere in this agreement, Employee may accept business from a Covered Customer who initiates contact and whom Employee did not Solicit.
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. This covenant is included to protect Employer's goodwill in its customer relationships and is drawn no broader than appropriate to protect it.
Drafting Note No-acceptance language
A standard non-solicitation clause does not necessarily stop a former employee from serving customers who come to them. Barring the service of former clients regardless of who makes first contact takes explicit non-dealing or no-acceptance language, because Mississippi reads ambiguity against the employer .
Drafting Note Accepting business versus soliciting
Each restraint reaches only the conduct it names. A customer non-solicit built on the Solicit definition reaches only the employee's active diversion; stopping a former employee from serving customers who come to them on their own falls to the separate No Business with Covered Customers covenant and its express no-acceptance language. A clause barring conduct that would tend to divert business was held ambiguous precisely because it did not expressly prohibit accepting business from former customers who came over on their own initiative, and the court construed that ambiguity against the employer . An express no-acceptance provision can, in appropriate cases, be reasonable and enforceable . That no-acceptance covenant is the heavier restraint, defensible only where it is genuinely needed and sized at least as tightly to the customer goodwill it protects; a customer non-solicit backed by the confidentiality and trade-secret terms is often a sturdier, more readily enforceable protection than a broad non-compete.
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, not to restrain ordinary competition, and is confined to the Restricted Territory and to the activities described in Cover Terms under Competitive Business. Where Cover Terms list Specified Competitors, this covenant is limited to those named competitors and their affiliates rather than the general Competitive Business definition. Passive Public Holdings are permitted.
Drafting Note Territory and market
A fixed radius or term copied from another form is measured against a market it was never sized to; a Mississippi court instead weighs the territory against the employer's real market and the employee's actual reach. A remote worker located inside the restricted area is still bound — geography is measured by where the employee operates, not only where the customers sit .
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. Physician and Health Care Practitioner Covenants
If Employee is a physician or other health care practitioner, the parties acknowledge that each covenant in this agreement restraining Employee's practice is limited to the durations and, where applicable, the territory stated in Cover Terms.
14. Practice Restrictions for Lawyers Excluded
If Employee is a lawyer, no covenant in this agreement restricts Employee's right to practice law after the termination of the relationship, except an agreement concerning benefits upon retirement. To the extent any covenant in this agreement would otherwise restrain Employee's right to practice law, that covenant does not apply to Employee.
Drafting Note Lawyers and minor signers
A practice restriction on a lawyer is unenforceable whatever the lawyer's pay or seniority: a partnership or employment agreement that restricts a lawyer's right to practice after the relationship ends is prohibited, except an agreement concerning benefits upon retirement . The rule's only other carve-out is a restriction included in the terms of the sale of a law practice under Rule 1.17 — a sale context an ordinary employment agreement does not present . Signer capacity turns on the same kind of threshold: a worker who signed as a minor and disaffirms the agreement cannot be bound by it, so a covenant's force depends on the signer's age and capacity at signing .
15. 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.
16. 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.
17. Tolling During Breach
If Employee breaches any restrictive covenant in this agreement, the Restricted Period for that covenant is extended by the time Employee is in breach, even if the Restricted Period would otherwise have expired according to the terms of this agreement, so that the full duration of the restriction is measured by the actual period of the breach. Any extension under this section is limited to the actual period of the breach and does not otherwise extend the Restricted Period.
Drafting Note Extension on breach
A Mississippi court will not, on its own, add time to an expired covenant — under Frierson it cannot. Pausing the clock during a breach depends on an explicit extension-on-breach clause tied to the actual period of breach, because that contractual route, not judicial tolling, is what Mississippi courts have enforced . Such a clause holds up where it extends each covenant only by the actual period of breach and caps the extension at that period, because an extension is itself a restraint that must stay reasonable rather than a lever that turns a fixed term into a perpetual one .
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.
19. Enforceability and Severability
If any provision of this agreement is found to be unenforceable, the remaining provisions remain in full force and effect.
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 for that covenant. Obligations under the Confidential Information and Trade Secret Protection section survive for as long as the relevant information remains a Trade Secret. 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 assignment of the covenants in this agreement in connection with a transfer of Employer's business must be made expressly and in writing. This agreement is binding on and inures to the benefit of the parties and their respective heirs, successors, and permitted assigns.
Drafting Note Assignment before departure
An employee covenant transfers only where it is assigned expressly and in writing in the transaction documents, because Mississippi will not supply a transfer the deal papers omit: the buyer of a propane business could not enforce an employee's covenant where the asset-purchase agreement's plain language did not transfer the employment contract, and a later assignment was of no effect because it came after the employee had already resigned . An assignment made before the employee departs, not after, is the one that takes. A covenant given by the seller of a business is the mirror image — it travels with the goodwill conveyed and is given general application unless its own terms make it personal to the original obligee — but a covenant given by an employee of the seller is just another contract that must be deliberately assigned.
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. 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: