Non-compete agreements, also known as non-competition agreements or covenants not to compete, are common in many countries, including Mexico. A non-compete agreement prevents an employee from working for a competitor or starting a competing business for a certain period of time after leaving their current employer.

In Mexico, non-compete agreements are governed by the Federal Labor Law (LFT) and the Industrial Property Law (LPI). The LFT regulates the employment relationship in Mexico, while the LPI regulates intellectual property rights, which can often be the subject of non-compete agreements.

Under Mexican law, non-compete agreements must meet certain requirements to be enforceable. First, they must be in writing and signed by the parties involved. Second, they must be limited in duration, geographic scope, and scope of activities. The duration of the non-compete agreement should not exceed two years, although this can be extended to five years in certain cases. The geographic scope should be limited to a specific region or city, and the scope of activities should be limited to the specific activities that the employee has knowledge of or was involved in while working for their employer.

It is important to note that non-compete agreements are not enforceable in certain situations. For example, if the employee is terminated without just cause or if the agreement is overly restrictive, it may be deemed unenforceable by a Mexican court.

In addition, non-compete agreements must be reasonable in terms of compensation. The employee must receive adequate compensation in exchange for their agreement not to compete with their employer. If the compensation is deemed inadequate, the agreement may be invalidated by a court.

Mexican law also requires that non-compete agreements be narrowly tailored to protect the employer`s legitimate interests. This means that the agreement must be drafted in a way that is necessary to protect the employer`s confidential information, trade secrets, or intellectual property.

In conclusion, non-compete agreements are common in Mexico and must meet certain requirements to be enforceable. They must be in writing, limited in duration, geographic scope, and scope of activities, and be reasonable in terms of compensation. Employers should ensure that their agreements are narrowly tailored to protect their legitimate interests and comply with Mexican labor and intellectual property laws.