non-compete agreement

How to Protect Yourself from a Non-Compete Agreement

Are you considering taking a new job but you’re afraid your previous non-compete agreement might come back to haunt you?  At Gardner Employment Law, we have helped other clients negotiate their way out of a binding non-compete. Call us if you are searching for an expert to review your non-compete agreement.

How Can You Get Out of a Non-Compete?

Two strategies can help you to escape the heavy burdens in a non-compete agreement that you signed.  Both are based on negotiations. One, if you are interviewing for a new position you can request indemnification from the new employer.  And, two, you can ask your current employer to amend the terms of your non-compete.  Both approaches require a fair amount of sophisticated strategy.

A valid non-competition agreement is a binding contract that contains restrictive covenants.  These “covenants” are promises that you made not to compete.  We explained the ramifications of signing a non-compete agreement in Non-Compete Lawyer.  However, even a valid non-compete agreement may have language that is overbroad, unreasonable, or arguably insufficient to meet the requirements of the Texas Business & Commerce Code.

Therefore, the first step is to analyze your non-compete to determine the agreement’s legal strength.  In other words, is it enforceable? The more unenforceable provisions that are contained in the agreement, the better your leverage in coming negotiations.

What is Indemnification from the Non-Compete Obligations?

Indemnification generally is defined as a promise by one party to protect the other party from potential harm.  In the non-compete context, you would request your prospective employer to protect you from a judgment and provide a defense should your former employer, with whom you signed the non-compete agreement, decide to file suit against you claiming that you have breached the non-compete agreement. This means that the new employer will take over the full liability for any damages that you may incur in any such lawsuit, according to the American Bar Association.

Why Should Any Employer Indemnify You?

Your leverage is key in negotiating for indemnity by your new employer. Are you by far the best qualified for the position? Are you highly competitive? What can you offer the new employer that no other applicant has? Does the employer want to hire you so badly that it will take the risk of a possible lawsuit by your former employer?

As we discussed in Executive Compensation, leverage is that special persuasive power to move the other side closer to your desired outcome. Leverage can be positive or negative. Positive leverage is your ability to supply what your opponent wants. Your value, your superior abilities, your contacts, your book of business are examples of assets that you can provide that will benefit a prospective employer. If others can provide these same assets as well or better than you, your leverage is diminished. Think about what you can bring to the table that other applicants do not. The prospective employer must believe that you’re the best.

The second part of this negotiation is the degree of strength or weakness of the non-compete agreement.  If the agreement is poorly worded, your new employer likely would prevail in court and be able to recover its attorneys’ fees.  With these assets in your arsenal, your superior qualifications and a weak or non-enforceable non-compete agreement, some companies will be willing to take the risk to indemnify you.

Will the Employer Who Signed the Non-Compete Agreement Change the Terms?

Frankly, that doesn’t happen very often. However, any time you resign or even if you are terminated, the company almost always will want you to sign a release of “any and all” claims that you may have against the company.  Especially if you have been a valuable employee with significant information about the company principals and historical events, that company will want you to sign a release when you leave. The company wants your assurance that you will never sue them. The company will offer you a “severance” payment to sign the release.

In this instance, some of your leverage is your signature on the release agreement. You can use that leverage to request revisions to your non-compete agreement as part of your severance package.

Hire a Non-Compete Expert

These negotiating tactics require a considerable amount of finesse.  The timing is critical, what points to press, when to raise those points, and numerous other negotiating skills.

Gardner Employment Law has analyzed countless non-compete agreements. If you need an expert to review your non-compete agreement or provide legal counsel, we’re here for you. If you want an expert to negotiate protection from your non-compete — Gardner Employment Law is the call to make. 

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