Lawyer
Expert in international corporate, IT, and crypto law. Has extensive experience in business setup and support in the USA, EU, LATAM, and the Middle East. Specializes in corporate structuring, compliance, KYC/AML, IP, GDPR, as well as regulation of crypto and fintech projects.
Case: Strengthening the NCA for a DefTech company: from a formal template to a functioning protection system
A Ukrainian technology company approached us that operates in the development and manufacture of defence products and engages employees, gig specialists and external contractors in critical technological processes.
Client’s objective
The company already had a draft non-compete agreement — NCA. However, the document contained overly broad restrictions, did not take into account differences between roles and was not effectively integrated with NDA, IP documents, HR procedures and the internal access control system.
The main objective was to determine whether such an NCA could genuinely protect the company if a key specialist moved to a competitor, poached the team or used acquired technological knowledge in the interests of another business.
Main risks
During the legal review, we identified a number of critical issues:
- the same restrictions were applied to all specialists regardless of their role and access to sensitive information;
- the duration and scope of the restriction could be considered disproportionate;
- compensation for compliance with post-termination restrictions was not properly regulated;
- the list of competitors and prohibited activities was drafted too broadly;
- penalty provisions were not linked to a mechanism for recording and proving a breach;
- the NCA was not synchronised with the NDA, assignment of intellectual property rights and termination procedures;
- the company did not have a comprehensive evidence pack to confirm an individual’s access to technologies, trade secrets and critical business processes.
For a DefTech company, such shortcomings create particularly high risks because the matter concerns not only commercial information but also technical solutions, product architecture, manufacturing processes, client contacts and the expertise of key teams.
What we did
Our team conducted a comprehensive legal audit of the NCA model and prepared:
- A legal opinion on the possibility of using non-compete agreements.
- An extended legal review of the existing draft document.
- An updated clean draft NCA adapted to the company’s operating model.
- A risk-based system for applying restrictions depending on the specialist’s role.
- An individual NCA profile as a separate appendix, defining for each person the risk category, list of prohibited activities, specific competitors or competitive segments, duration of restrictions, territory, amount of compensation and permitted exceptions.
We rejected the approach under which every employee is automatically subject to the maximum possible restriction on employment within the industry.
For critical technical and management roles, we recommended applying a full NCA for approximately 9–12 months with appropriate compensation.
For specialists with a lower level of access — a shorter period or only a non-solicitation mechanism, meaning a prohibition on poaching employees, contractors and clients.
We also included:
- a mechanism for written release of an individual from the restrictions;
- an exit interview procedure;
- confirmation of the return of access credentials, equipment and information;
- rules for recording a potential breach;
- coordination between HR, Legal, IT and Security upon termination of cooperation;
- a mechanism for documenting access to confidential information.
The model was also synchronised with intellectual property protection, NDA and contractual mechanisms for the assignment of rights. A similar systematic approach to NDA, IP assignment, security rules and offboarding is also applied when formalising cooperation with technology specialists.
Result
The client received a comprehensive package exceeding 20 pages, which included a legal opinion, detailed risk analysis and an updated NCA draft.
Instead of a formal agreement with a high risk of challenge, the company received a multi-level protection system in which the scope of restrictions depends on the actual access of a particular specialist to technologies, teams and commercial information.
We also prepared recommendations on developing an internal trade secrets policy, access matrix, NDA, IP assignment and offboarding procedures.
Value for the client
The developed approach allows the company to:
- protect critical technological expertise;
- reduce the risk of key teams moving to competitors;
- increase the likelihood of the NCA being genuinely enforceable;
- avoid excessive and legally vulnerable restrictions;
- build an evidence base before a conflict arises.
For a technology business, an NCA is only one element of the overall contractual system. Comprehensive legal support for a technology company also covers agreements with employees and contractors, NDA, assignment of IP rights, HR documents and termination procedures.
Do you need to review an existing NCA, strengthen technology protection or build a comprehensive NDA, IP and non-solicitation system for key specialists? Contact the lawyers at Prikhodko & Partners for a document audit and the development of a contractual model tailored to your company’s structure.
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