How to negotiate a non-compete agreement


Employers or business owners have a right to protect their secrets, assets, and their clients. There are two instances when a business contract lawyer is needed when an employee is released from their duties with a company, or when a business is sold. Contracts known as non-compete agreements are signed by both parties to protect the business and the business owner. Any violation of this contract is known as a breach of contract and there are fines and possibly imprisonment involved. It depends on how much damage has been done with the breach of contract. It is up to the business lawyer to determine should it go this far. Compromises or negotiations are slim but possible. The number one goal in mind is removing the competition from the equation. 

Knowing the Basics of Non-Compete Agreements

At the time of termination or layoff when an employee is signing off, they must sign a non-compete agreement acknowledging they will not disclose any information from their employer, workers, or the company’s policies or operations. This is set in place to protect the business owner from having his or her competitors gaining access to valuable information that can cost the company money or closure. Any information released to the competitors could crush the business and cost the business owner a fortune. Not to mention, all the work to get to where they are, they could lose their personal property by having to sell what they purchased if the business debt outweighs the damage. Limited Liability Companies (LLC), corporations, and industries all have this right to keep their personal belongings out of the system. Doing Business As (DBA) companies have this right as well, but most do not use this option because their business is a sole proprietorship or has few employees.

Negotiations With An Employer

Since a business attorney draws up the paperwork for the non-compete agreement, there are little chances for negotiations since. A business owner most likely has gotten with their attorney at the time their business was established. The rules and regulations have already been set in place. Once an employee signs on to get hired, they have already agreed while employed to take whatever they know about the business to their graves. After they quit or they are released from the company, the only agreements they can negotiate are those which do not concern the clients or anything concerning the business. Salary may be the only exception to the rule. This is about the only thing that the employee can disclose with other companies. If they go to another company, they will need to negotiate with their future employer on what they desire to get paid. To do this they have to disclose their previous salary. A legal attorney may need to get involved in the contract is unclear in these circumstances.

Another instance would be the time frame of working for a competitor. The stipulation cannot be removed, but in some instances, the time frame can be lessened. For example, if the employee signs an agreement for up to a year without working for the competitor, the employee can get an attorney to shorten the time span to six months or however long is needed. This will keep the employee working especially if they were laid off or terminated. It may be all they know in the industry to continue on in their field to support themselves and their families. 

Negotiations After Purchasing A Business

If a business owner decides to sell their business, they have to sign a non-compete agreement. Once again, the only thing that can be negotiated is the time frame in which they cannot work or open another business in the same field. Sometimes if the owner of the business sells out to another, they may want to move out of state or country. These are probably the only reasons allowed to negotiate. Everything is up to the lawyer, and they follow the state law when the contract is drawn up. There is little to no waiver, but there is a slim chance something can be found in an agreement by all parties involved during the bill of sale. 

Signing on the Dotted Line

With every legal document, once a person signs on the dotted line, it is completed. Whatever document becomes a legal document and the courts will always go by the signature. It is almost like signing your life away because there is no way out once the paperwork is signed. This is why it is very important for all parties to have a business attorney present when signing such documents. All parties have to understand every word on the paper and agree before signatures are set in stone. All negotiations must happen before, otherwise, it becomes law.

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About Snehal Tanwar 51 Articles
I believe in the power of words and I think God has blessed me with the same. I have a strong experience in the area of writing and love to share my work with the readers. Happy reading!!

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