Non-Compete Release Form

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Updated June 16, 2022

A non-compete release form waives all liability related to restrictions that prohibit a person from working in a specific business or industry. This is common for past employees that signed an employment contract that included a non-compete clause and desire to be released from its restrictions. Unless there is a benefit to the holder of the non-compete, such as direct payment, it can be difficult to get a release.

How to Get a Release (4 steps)

  1. Check Applicable Laws
  2. Request the Release
  3. Negotiate the Terms
  4. Sign the Release Form

1. Check Applicable Laws

In recent years, many states have enacted stricter non-compete laws. Many employers have had a difficult time keeping up with the changes and there is a chance a non-compete covenant was not written in accordance with state laws.

Prohibited States – California, North Dakota, Oklahoma, and Washington D.C.

In the 47 states where non-competes are legal, there must be a specific time period and geographical area attributed to the restraint. If not, the non-compete can be determined to be unenforceable.

2. Request the Release

Asking for a release is no easy task. It’s best to either offer money or other valuable consideration in exchange to be let out of the restraint. It is recommended to write an e-mail in accordance with the following sample letter:

Letter Requesting Release from a Non-Compete

Dear [NAME],

As you may know, I signed a previous agreement that restricts my ability to work in my skilled profession. At the time of signing, I did not understand the undue hardship this would put on me and my ability to make a living.

I am writing this letter and desperately requesting a release from this non-compete restraint. I am  willing to offer payment or other valuable consideration in exchange for this request.

Please contact me at any time to further discuss this matter at [TELEPHONE] or [E-MAIL].

Sincerely,

[YOUR NAME]

3. Negotiate the Terms

The terms of the release should be negotiated in good faith. The restrained party should always present that, at any time, they can move outside the geographical area the non-compete is bound. Therefore, the holder of the non-compete does not have unlimited leverage.

4. Sign the Release Form

Write the terms of the release in a legal document and send it for signature. Immediately after the parties’ sign, the restrained party will be released from the non-compete.

Keep in mind that a non-compete release does not release the recipient from other contractual obligations post-termination. This may include withholding confidential information (trade secrets), non-solicitation, non-defamation, and any other terms to protect the previous employer.

Sample Release Form

Download: Adobe PDF, MS Word, OpenDocument

How to Write

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I. The Parties

(1) Date Of Release Effect. This agreement must have a specific date of effect marking when its content will be applied to the Releasor and Releasee. Establish this agreement’s effective date by recording it across the first two blank space of the First Article.

(2) Releasor Identify. The full name of the Releasor must be established in the First Section. The space attached to the word “Releasor” must be supplied with the Releasor’s full legal name. In most cases, this will be a formal Business Entity, therefore any abbreviations and/or status suffixes registered as part of its (legal) name will be expected when identifying the Releasor. Similarly, if the Releasor is not a formal Business Entity, then make sure the full name of the Party acting as the Releasor is presented. The Releasor will be the Entity or Party who will use this paperwork to formally remove the non-compete impositions placed through a previous agreement by making them void or no longer effective.

(3) Releasor Address. After the Releasor has been named, the formal mailing address where he or she can be contacted or sent notices must be dispensed. If the Releasor is a Business Entity then make sure the address reported will be directed to the correct department.

(4) Releasee. In many cases, the Releasee will be an Employee or Contractor who has participated in the business of the Releasor. The full name of the Releasee must be produced on the “Releasee” line in the final area of Article I.

(5) Releasee Address. The mailing address where the Releasee can be sent notices, inquiries, or any communications that follow up on this agreement is required after the presentation of his or her identity. Utilize the final line in the “Releasee” section of Article I to display the Releasee’s full mailing address.

II. Prior Agreement

(6) Date Of Prior Agreement. As mentioned, this release will directly affect a previous agreement. Therefore, Article II will call for the previous agreement to be identified. Furnish the effective date of the agreement that currently imposes a non-compete condition on the Releasee and which this release shall directly alter. The effective date should be specifically named on the original agreement, however if it is not, then the latest signature date on the contract being affected may be presented in this area to identify it.

III. The Exchange

Select Item 7 Or Item 8 Or Item 9

(7) No Payment. If the Releasor does not require any payment or action on the part of the Releasee in order to nullify or terminate the conditions of the non-compete, then the “No Payment” checkbox, found in the Third Article, should be filled in or supplied with a checkmark or an “X.”

(8) Required Payment. If the Releasor requires that the Releasee submit payment in exchange for the removal of the non-compete conditions that he or she must (currently) comply with, then the second checkbox must be selected from Article III. After making this selection, locate the blank space provided after the “$” symbol found in this option and dispense the exact dollar amount of the payment the Releasor expects to receive from the Releasee before the non-compete conditions are lifted.

(9) Other Requirement. The final option presented by the Third Article allows the Releasor to place specific requirements for the termination of the non-compete conditions currently being observed. To engage specific conditions on this release, supply a mark to the checkbox labeled “Other.” Once done, use the space available in this option to document each requirement that the Releasee will agree to fulfill so that the Releasor may terminate the non-compete conditions this agreement will nullify. For instance, several payments made across a span of time may be needed, an additional or supporting agreement may need to be entered before this one can become effective, or there may be contingencies placed on this release. Make sure that the details defining what the Releasee must pay or submit to satisfy this agreement are documented fully even if an attachment with these requirements must be named and then affixed to this paperwork.

V. Non-Waivable Terms

(10) Releasor Signature. This release only becomes effective, meaning that the non-compete conditions it refers to will be lifted, when the Releasor, identified as such in Article I, signs the “Releasor Signature” line. A Business Entity should have a Signature Representative set in place for this task. Once a Signature Representative is authorized to enter the Business Entity to this agreement, he or she must sign his or her name. If the Releasor is a private Party, then he or she must sign his or her full name as the Releasor to this space.

(11) Printed Name. The Releasor’s printed name is required. Note that a Signature Representative acting on behalf of an Entity should print his or her name and supply the title he or she holds with the Entity on the “Print Name” line.

(12) Date Of Releasor Signature. The date when this paperwork was signed by the Releasor must be established. This can only be accomplished if the Releasor personally enters the current calendar date upon the space provided at the time of signing.

(13) Releasee Signature. The Releasee mentioned in Article I will only benefit from this agreement if he or she signs the “Releasee Signature” line as proof that he or she intends to uphold its requirements.

(14) Print Name. The printed name of the Releasee must be supplied when he or she signs this document.

(15) Date Of Releasee Signature. In addition to submitting his or her signature and printed name, the Releasee must solidify the calendar date when he or she entered this agreement with its presentation on the line labeled “Date.”