Non-compete, Customer and Employee Non-solicitation, and Confidentiality Agreement
(KY)

This template is a non-compete, non-solicitation, and confidentiality agreement for use by employers in Kentucky. This template includes practical guidance, drafting notes, and alternate and optional clauses. IMPORTANT NOTE: On April 23, 2024, the FTC issued its final rule prohibiting new non-compete agreements with all workers. The rule provides that existing non-compete agreements with senior executives remain in force, and existing non-competes with all other workers are not enforceable. The term “senior executive” means a worker who makes more than $151,164 and who is in a “policy-making position.” The final rule is set to become effective 120 days after publication in the Federal Register, but it is being challenged in court, including by the U.S. Chamber of Commerce. For more information on the FTC’s final rule, see Fact Sheet on the FTC’s Noncompete Rule. This agreement contains covenants not to compete, and confidential and proprietary information covenants/provisions commonly found in confidential information and non-disclosure agreements. This template is intended for private employers. It does not differ from the non-jurisdictional Non-compete, Customer and Employee Non-solicitation, and Confidentiality Agreement, except that it contains practical guidance, drafting notes and alternate clauses that comply with, address issues under, both Kentucky and federal law. Kentucky courts generally favor enforcement of non-competition clauses as long as they are reasonable in geographic scope and duration. See Managed Health Care Assocs. v. Kethan, 209 F.3d 923, 928 (6th Cir. 2000). According to the Kentucky Supreme Court: "[T]he policy of this state is to enforce [restrictive covenants] unless very serious inequities would result." Hall v. Willard & Woolsey, P. S. C., 471 S.W.2d 316, 318 (Ky. 1971). However, an employee confidentiality agreement must be supported by adequate consideration in order to be enforceable. Charles T. Creech, Inc. v. Brown, 433 S.W.3d 345 (Ky. 2014); Cmty. Ties of Am., Inc. v. NDT Care Servs., LLC, 2015 U.S. Dist. LEXIS 14990, at *54-55 (W.D. Ky. Feb. 6, 2015). For information on non-competition agreements, see Non-compete Agreements: Key Negotiation, Drafting, and Legal Issues; Non-compete Agreements Checklist (Best Drafting Practices for Employers); Restrictive Covenant Basics, Including Adequate Consideration, Protectable Interests, Geographic and Time Restrictions, and Permissible Scope; Restrictive Covenants: Drafting Common Provisions; and Non-compete and Non-solicitation Agreements Checklist (Addressing Suspected Violations). For information on customer and employee non-solicitation agreements, see Customer and Employee Non-solicitation Agreements: Key Negotiation, Drafting, and Legal Issues. For information on non-disclosure agreements, see Non-disclosure Agreements: Key Negotiation, Drafting, and Legal Issues (Pro-Employer). For information on Kentucky laws concerning non-disclosure agreements and restrictive covenants in general, see Restrictive Covenants (KY). For a confidentiality agreement with an inventions assignment for use in Kentucky, see Confidentiality Agreement (with Inventions Assignment) (KY).