The Protective Covenants Agreement serves as a crucial legal instrument in Indonesian business operations, designed to protect legitimate business interests while complying with Indonesian civil and employment law frameworks. This document is typically implemented at the commencement of employment or during significant role changes, particularly for positions with access to sensitive information or key business relationships. The agreement encompasses confidentiality obligations, non-competition restrictions, non-solicitation provisions, and intellectual property protection measures, all carefully drafted to ensure enforceability under Indonesian jurisdiction. It is essential for businesses operating in Indonesia to safeguard their competitive advantages, trade secrets, and customer relationships while maintaining compliance with local regulations, including Law No. 13 of 2003 on Manpower and relevant IP protection laws.
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1. Parties: Identification of the company and the individual bound by the covenants
2. Background: Context of the agreement, relationship between parties, and legitimate business interests being protected
3. Definitions: Detailed definitions of key terms including Confidential Information, Trade Secrets, Intellectual Property, Competitive Business, and Restricted Territory
4. Confidentiality Obligations: Detailed provisions regarding the protection and non-disclosure of confidential information and trade secrets
5. Non-Competition Covenant: Restrictions on competing activities, carefully drafted to comply with Indonesian labor law limitations
6. Non-Solicitation of Customers: Restrictions on approaching or dealing with company customers and business partners
7. Non-Solicitation of Employees: Restrictions on recruiting or hiring company employees
8. Intellectual Property Rights: Provisions regarding ownership and protection of IP created during employment
9. Return of Company Property: Obligations regarding the return of company materials and information
10. Duration and Territory: Specific timeframes and geographical scope of restrictions
11. Acknowledgments: Employee acknowledgments regarding reasonableness of restrictions and receipt of consideration
12. Remedies: Available remedies in case of breach, including injunctive relief
13. General Provisions: Standard clauses including governing law, severability, and modification
1. Garden Leave: Optional provisions for paid non-compete period, used for senior executives
2. Assignment Rights: Include when the company may need to transfer the agreement rights
3. Non-Disparagement: Additional provisions preventing harmful statements about the company
4. Monitoring and Compliance: Additional provisions for monitoring compliance, typically used for high-risk positions
5. Training and Trade Secrets: Specific provisions regarding specialized training received and related obligations
6. International Operations: Additional provisions for employees involved in international business
7. Security Measures: Specific technical and physical security measures for handling confidential information
1. Schedule 1 - Restricted Territory: Detailed description of geographical areas where restrictions apply
2. Schedule 2 - Competitor List: List of specific competitors or competing businesses
3. Schedule 3 - Confidential Information: Detailed categorization of confidential information and trade secrets
4. Schedule 4 - Company Intellectual Property: List of relevant company IP rights and materials
5. Appendix A - Acknowledgment Form: Form for periodic reaffirmation of obligations
6. Appendix B - Exit Interview Checklist: Checklist for ensuring compliance upon employment termination
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