South Dakota Non-compete Agreement Template

If you run a business in South Dakota and want to protect your business data, you may create some legal documents and ask your workers to sign them. One of such documents is the South Dakota non-compete agreement.

This agreement prevents employees from spreading information to other people and cooperating with competitors in any way. After signing, employees are obliged to keep data in secrecy and save your entity’s privacy.

If they violate the document’s conditions, they may be punished using the method the entity’s management chooses (cancellation of a work contract, fines, cautions, and so on). The punishment a worker will face in case of violation should be included in a free non-compete agreement.

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We live in a world where information spreads extremely fast. People use numerous communication methods—social media, video and phone calls, and meetings in person. Sometimes your worker may accidentally reveal something crucial for your business to your direct rival. With this agreement, you can protect various info tied to your entity’s clients, other workers, competitors, used software, and many other items.

Each non-compete agreement is signed by two parties—a company representative, willing to protect their data (also referred to as “Company”), and a worker (also referred to as “Recipient”). If needed, the company may ask its independent contractors or partners to sign the form. Without signatures and dates of signing, an agreement is invalid.

Each American state offers its regulations concerning non-compete agreements and unlawful business practices. However, the non-compete agreement template looks similar in all states, including South Dakota.

Our form-building software will help you to get the South Dakota non-compete agreement template. If you prepare an agreement on your own, remember to include the following information:

  • Agreement terms
  • Confidential information definition
  • Conditions under which a recipient shall act, including penalties for violations
  • The date of signing
  • Both parties’ names and signatures

Suppose you are a company general manager who wants to sign a non-compete agreement with your employees. Here are the basic steps to follow:

Determine the Confidential Data in your Company

You have to ensure that all data that needs to be protected is listed in the non-compete agreement. Think thoroughly about what restrictions you have to impose.

As we have mentioned above, they may address your customers’ details, software, database, and other internal information. Also, you have to state what information is non-confidential so your workers can know where the borderline is.

Choose a Suitable Validity Period

Some non-compete agreements oblige workers to keep a secret only while they have a valid work contract. Others remain effective after workers quit. You have to pick a suitable term for your company and include it in the document.

List the Conditions

Your non-compete agreement should clearly state rules that your employees should stick to. Remember to add the section explaining what the employee should expect if they break these rules.

Spread the Agreement’s Copies

After preparing the template, give the copies to your workers to sign. In some cases, you might issue the copies to a limited number of workers—those with access to confidential information. Keep the signed non-compete agreements in the entity’s archive.

South Dakota legislation differs from other American states’ laws, and the topic of non-compete agreements is not an exception. For example, some states offer a list of specialists who should not sign such agreements by law, while others have no rules at all. Below, are the provisions regulating the topic in South Dakota and its existing limitations.

South Dakota NCA Laws and Restrictions

Title 53 of the South Dakota Codified Laws contains all laws related to contracts in the state. According to Section 53-9-8, non-compete agreements might be considered void if they interfere with your employee’s possibilities and career.

However, there are exceptions listed in the following Sections (from 53-9-9 to 53-9-12). For instance, Section 53-9-11 prescribes that a worker can agree on specific non-compete provisions, but they are geographically limited and should last no more than two years after a worker quits. Non-compete agreements may also be signed by partners dissolving a partnership (Section 53-9-10).

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Published: Feb 11, 2021
Jennifer M. Settles
Jennifer M. Settles
Author & Attorney
With over 25 years of experience as a business and transactional attorney, Jennifer has mastered the craft of closing highly successful deals for her clients. Through her wide-ranging expertise in commercial contracts, real estate transactions, M&A and corporate law, Jennifer secures results that are second-to-none.