Overview

An Affidavit of Non-Compete is a sworn statement where a person (usually an employee, contractor, or business seller) affirms and undertakes that they will not compete with a particular business under specific conditions. In Philippine practice, this affidavit commonly supports a non-compete covenant already found in an employment contract, consultancy agreement, partnership dissolution, or sale of business, and is executed to emphasize voluntariness, clarity of restrictions, and enforceability.

In the Philippines, non-compete clauses are not automatically void. Courts generally uphold them if they are reasonable and not contrary to law, morals, public policy, or public order. The affidavit’s job is to help show that the restraint is fair, informed, and proportionate, not oppressive.

Where Philippine Law Stands on Non-Compete Agreements

Constitutional and statutory backdrop

The Constitution protects labor and promotes full employment and security of tenure, but it also respects the freedom to contract and the protection of property and business.
Philippine civil law lets parties set terms and conditions, so long as they are not contrary to law or public policy.

General enforceability rule

Philippine jurisprudence treats non-compete covenants as enforceable when reasonable. Courts test reasonableness by looking at:

Time (duration of restraint),
Place (geographic scope), and
Trade or work restrained (nature and breadth of prohibited activity).

Key policy tension

Courts balance:

the employer’s/business owner’s right to protect legitimate interests (trade secrets, goodwill, client relationships, investments in training), against
the individual’s right to earn a living.

If the restraint is broader than necessary, courts may invalidate it entirely or reduce its scope depending on the circumstances and how the clause is written.

When an Affidavit of Non-Compete Is Used

Employment exit – after resignation/termination to reiterate post-employment restraints.
Independent contractor/consultant offboarding – to reinforce confidentiality and non-solicitation/non-compete duties.
Sale of business / goodwill purchase – seller swears not to open a competing business.
Partnership dissolution – partners agree not to compete against the dissolved entity.
Settlement of disputes – part of compromise agreements.

What Makes a Non-Compete “Reasonable” in Philippine Context

1. Legitimate business interest

A restraint is more likely to be upheld if it protects something real, such as:

trade secrets,
confidential methods and data,
customer lists and pricing strategies,
goodwill acquired through the business, or
specialized training paid for by the company.

A bare desire to block competition without a protectable interest is weak.

2. Reasonable time period

There is no fixed statutory maximum. Reasonableness depends on the role and industry. Usually:

Shorter durations are safer (months to 1–2 years),
Longer periods demand strong justification (e.g., sale of business, senior executives with deep strategic access).

3. Reasonable geographic scope

Scope should match where the business actually operates or competes.

If the business is local, a nationwide ban may look excessive.
If the business is nationwide or online, broader scope can be justified, but must still be tied to actual market reach.

4. Reasonable activity scope

The affidavit should narrowly define prohibited acts:

“direct competitor doing the same business line” is safer than
“any business remotely related to employer’s industry.”

Also, avoid banning any form of employment; focus on roles that would truly harm legitimate interests.

5. Consideration or fair exchange

In employment, continued employment can support a non-compete, but extra consideration (separation package, retention bonus, training investment, or buyout price) strengthens enforceability. In sale of business, the purchase price/goodwill is clear consideration.

6. Voluntary and informed consent

An affidavit helps prove:

the signer understood the restraint,
had an opportunity to ask questions, and
signed freely, without coercion.

Affidavit vs. Contract Clause

A non-compete clause is a contractual covenant.
An affidavit of non-compete is a sworn reaffirmation—useful evidence if enforcement is challenged.

Important: The affidavit should not conflict with the main agreement. If there is inconsistency, courts will generally treat the contract as controlling, and the affidavit as secondary evidence.

Core Parts of a Strong Philippine Affidavit of Non-Compete

A. Title

“AFFIDAVIT OF NON-COMPETE”

B. Appearance / Introductory Paragraph

State the affiant’s identity and capacity:

full name,
citizenship,
legal age,
civil status,
address,
former/current position or relation to the business.

C. Statement of Background

Explain the context:

employment/consultancy/sale of business,
dates of engagement,
nature of role and access to sensitive information.

This anchors legitimacy of restraint.

D. Prior Agreement Reference

Cite the main contract:

title,
date signed,
relevant clause number.

Example: “I executed an Employment Agreement dated ___ containing a Non-Compete Covenant under Section __.”

E. Non-Compete Undertaking

State clearly:

Duration (e.g., “for twelve (12) months from separation…”)
Geographic coverage (e.g., “within Metro Manila and any area where Company has active clients as of separation…”)
Prohibited activities (e.g., “engaging in or rendering services to businesses that directly compete in ___; soliciting clients listed in Annex A…”)

Use precise, factual language.

F. Reasonableness and Necessity Declaration

Affiant acknowledges:

the scope is fair,
it protects legitimate interests,
it does not unduly prevent livelihood because other fields/roles remain open.

This clause matters a lot in PH litigation.

G. Consideration / Benefit

State what the affiant received or recognizes as consideration:

employment and salary,
specialized training,
separation pay,
goodwill purchase price, etc.

H. Confidentiality and Non-Solicitation (Optional but common)

Often bundled with non-compete:

not to reveal confidential information,
not to poach employees/clients.

These are generally easier to enforce than broad non-competes.

I. Remedies and Acknowledgment of Liability

Affiant recognizes that breach may lead to:

damages,
injunction,
return of incentives,
other lawful relief.

Avoid threatening criminal liability unless clearly grounded in separate law.

J. Oath and Signature Block

Standard jurat, signed in front of a notary public.

Drafting Guidance (Philippine Practical Notes)

1. Keep it narrow and explain why

Philippine courts dislike restraints that look punitive. If the restriction is tight and justified, it survives.

2. Define competitors and market

Don’t rely on vague phrases like “similar business.” Name the market segment or attach a list or definition.

3. Avoid “all-Philippines, all-industry, all-roles” bans

These are the most vulnerable to being struck down.

4. Build in carve-outs

Say what the affiant can still do:

work in non-competing industry,
work in same industry but in a role without competitive impact,
passive investment without management role, etc.

5. Attach annexes when needed

list of key clients,
definition of confidential info,
map/territory description.

Sample Template (Philippine Form)

AFFIDAVIT OF NON-COMPETE

I, [Full Name], of legal age, [civil status], [citizenship], and residing at [address], after having been duly sworn in accordance with law, hereby depose and state that:

I was employed by / engaged as consultant of / sold my business interest to [Company/Buyer Name] (“Company”) under a [Employment/Consultancy/Sale] Agreement dated [date]. In my capacity as [position/role], I had access to confidential and proprietary information, trade practices, client relationships, pricing, and strategies of the Company.

I confirm that the above agreement contains a Non-Compete Covenant under Section [__], which I voluntarily accepted with full understanding of its terms.

In reaffirmation thereof, I hereby undertake that for a period of [e.g., twelve (12) months] commencing on [date of separation/closing], I shall not, within [geographic scope], directly or indirectly: a. engage in any business that directly competes with the Company’s business of [describe line of business]; b. be employed by, consult for, or render services to any entity primarily engaged in [competing business definition]; and/or c. solicit or do business with clients of the Company identified in Annex “A”, with whom I had material dealings or knowledge during my engagement.

I acknowledge that the foregoing restrictions are reasonable in time, place, and scope, are necessary to protect the Company’s legitimate interests, including its trade secrets, confidential information, goodwill, and client relationships, and are not intended to deprive me of lawful livelihood, considering that I remain free to work in non-competing roles and industries.

I acknowledge that the consideration for my undertaking includes [state consideration: employment and compensation / training / separation benefits / goodwill purchase price], which I have received or am entitled to receive under the agreement.

I further undertake to keep strictly confidential all non-public information regarding the Company and not to use or disclose the same for my own benefit or for any third party.

I understand and agree that any breach of this Affidavit and the Non-Compete Covenant may render me liable for damages and/or injunctive relief, without prejudice to any other lawful remedies available to the Company under the agreement and applicable laws.

IN WITNESS WHEREOF, I have hereunto set my hand this [day] of [month] [year] in [city/province], Philippines.

[Signature of Affiant] [Printed Name]

SUBSCRIBED AND SWORN to before me this [day] of [month] [year] in [city], Philippines, affiant exhibiting to me his/her competent evidence of identity, to wit: [ID type and number].

[Notary Public Signature/Seal]

Common Mistakes That Weaken Enforceability

Overbroad definition of competition Example: banning any work “related to IT” when the business is only in a small IT niche.
Mismatch with main contract If the affidavit expands restrictions beyond the original contract without new consideration, it’s risky.
No legitimate interest stated Courts need to see what you’re protecting.
Indefinite or unclear period Use specific dates or duration “from separation/closing.”
No proof of voluntariness Avoid signing under obvious pressure. The affidavit should say it was voluntary.

Enforcement and Litigation in the Philippines

What employers/business buyers typically seek

Injunction (court order to stop competing),
Damages, and
Return of incentives/penalty if contract provides.

Evidence that helps

The affidavit itself (voluntary reaffirmation),
Proof of confidential access,
Proof of consideration,
Industry context showing reasonableness.

Practical reality

Even enforceable non-competes can be hard to litigate if:

restrictions are too vague,
proof of actual competitive harm is thin, or
the company delayed enforcement.

Special Scenarios

A. Rank-and-file employees

Philippine courts are more protective of lower-level workers. Non-competes here must be very narrow and well-justified.

B. High-level executives / key employees

Broader restraints are more defensible because access to strategy and client influence is deeper.

C. Sale of business

Courts more readily uphold heavier non-competes because:

goodwill is purchased,
seller is paid to exit competition.

D. Remote/online businesses

Geographic limits can be framed by:

location of customers marketed to,
territories of operation,
platform/market segment.

But still avoid global bans unless the business truly operates globally.

Checklist Before Notarization

Does it mirror the original non-compete clause?
Are time, place, and activity scopes clearly defined and reasonable?
Is the legitimate interest described?
Is consideration stated?
Are annexes complete and referenced?
Are IDs ready for notarization?
Is the affiant signing voluntarily and not under duress?

Final Note

This topic is fact-sensitive. The enforceability of a non-compete in the Philippines depends heavily on the role, industry, and actual market reality. A carefully drafted affidavit won’t save an unreasonable restraint—but it significantly strengthens a reasonable one by showing clarity, voluntariness, and fair balance.