Disclaimer: I’m not a lawyer so if you need legally binding advice, please seek out the services of an attorney licensed in the required jurisdiction.
I have researched my own legal matters on several occasions just as a matter of being educated in various matters. I’ve found over the years that a lot of people I run into have not.
Much of my network of associates operate in technical fields. When they change jobs, they’re often asked to sign a Non-Compete Agreement as a condition of their employment. More times than not, it’s signed as-is without any negotiation.
The most blatant power grab I’ve seen, was a former employer who hadn’t had time to draft their Non-Compete and was asking me to sign a document that said I’d agree to sign the official one once it was drafted. Say what? I’m going to agree to agree to something in the future for which I’ve not seen?
Even then, I didn’t say “No”, but asked how I could agree to agree to something unknown. They eliminated the requirement without me ever having to say No.
My Non-Compete Rules of Thumb
- Different states have differing rules about what’s allowed and not allowed including duration. Check with your local jurisdiction for clarification in your area. Most law firms will give you a free initial consultation.
- A fair Non-Compete shouldn’t prohibit you from gainful employment in the area of your technical expertise.
- If signed as a condition of employment, Non-Compete agreements have legal standing provided they don’t violate some aspect of the law.
- If you’re asked (or required) to sign AFTER you’re employed, they typically are not enforceable unless you were compensated in some way for signing it (bonus, higher wage, etc.)
- Yes, it’s a legal document but don’t hesitate to edit it. Add things you like, strike those you don’t and change the terms how you see fit. Most companies are willing to negotiate the finer points of a Non-Compete.
- Unless you’re hiring for a law firm,. the person asking you to sign isn’t the legal wordsmith that drafting that abomination of a document. Don’t take it personally. They won’t either when you ask for changes.
- Limit the companies you can’t work for. What if they dominate an industry and most of your potential future employment options are “a customer”? e.g. I won’t go to work with anyone I’ve had direct interaction with as a result of my employment…etc.
- Ask that they have a clause that if THEY terminate your employment, that the clause is null and void.
- You’ll still need to honor confidentiality agreements but you should be able to work anywhere if they terminate your employment.
- Work to limit the duration of the terms. e.g. 3 months as opposed to 5 years.
- Ask to add a buyout clause, an extended notice to leave or other options to exit the agreement.
In short, get creative. You don’t have to have all the answers. It’s an opportunity to have a conversation where you can discuss your concerns and they can even help find creative ways to ease your concerns while addressing their own.