Lawyers You Can Love

Non Compete and Non Solicit Tips (Part 2)

If you are faced with negotiating a non compete agreement, a non solicit agreement or both, the following tips (6-10), part of our 2 part series, will help you navigate such provisions in employment agreements, consulting agreements or even the sale of your company.

 6. Do not agree to pay for attorneys fees for the employer should you want to challenge the non compete. The thought of having to pay your own attorneys fees plus the employers fees is enough to keep most employees from challenging a non compete. It is also an effective deterrent to settlement. Why? The employer has leverage knowing you will balk because of attorney fees.

7. Non Solicit clauses--make sure the contract distinguishes between customers your new employer has vs. your old employer. Agree only not to “solicit” customers. Do not agree to restrictions on soliciting where your former employer’s customers seek you out or the customers are already customers of the new employer.

8. You can often change such provisions despite employer’s claim that they have to have the same provisions against all employees. Executives often have very different provisions than intermediate or lower level employees within the same company. You can often limit the length and the scope of the non compete. You can also have different start dates and exclude from the non compete specified customers and industries.

9. Keep track of the covenant you signed, including paperwork and emails, and whether your employer is enforcing covenants uniformly. If not, the company may not be able to enforce the non compete against you. Most employers want to know if you are subject to such provisions—you may not get hired if you have signed one. Good to know if you did and what it says.

10. You are better off with a non solicit than a non compete. You want to be able to work for future employers. Tell your prospective employer if you are subject to a non compete. Your new employer does not want to get a demand letter threatening a lawsuit.

Non Compete and Non Solicit Tips

As business competition heats up and the economy (not to mention the weather) cools down, we are being asked to review both non compete agreements and non solicit agreements for executives and companies.

 Companies don’t want valuable information walking out the door and business professionals want to know they can earn a living elsewhere.

Whether it is a non compete (you may not go to work for a competitor for a specified period of time) or a non-solicit (you may not solicit customers, clients and employees from your former company or client) or both, you should be wary of such provisions.

Top 10 Non Compete Non Solicit Tips

 Here are our tips should you be asked to sign such restrictive provisions whether it is in a customer contract or an employment agreement.

1. If you sign an agreement with a non compete or non solicit provision, be prepared to live with it as written. You are likely unable to afford the costs of challenging the clause. And, even if you can, judges vary widely on how they apply them because they are so fact dependent.

2. Try to avoid signing the contract with such provisions. If the employer wants you badly enough, they may back down. Or they may agree to just a trade secret provision.

3. If you must sign a contract with a non compete, narrow the scope. The amount of time, the scope of the business and the geographic limitation are usually broad in these provisions.

4. Make sure that the non compete or non solicit contained in the contract is linked to a business interest, i.e. protection of trade secrets, confidential information and/or investment in training and education for employees. If you are not exposed to such information or don’t get the training, the non compete may not be enforceable. The employer has to protect more than general job knowledge in order for the non compete to be enforceable.

 5. If you must sign a non compete, try to get extra compensation for it if possible, e.g. a signing bonus or a severance package. If the employer balks, tell that them that such compensation or “consideration” makes this covenant enforceable. You should note that in most states, the signing of a covenant not to compete at the beginning of employment is sufficient.

We'll cover Tips 5-10 in the next blog post.

Negotiating Salary, Women and Negotiation in Business

Negotiation for Women in business was the topic for my presentation yesterday at the University of Colorado Deming Center with women MBAs.  Women just don't ask or ask as effectively--whether it is research studies, anecdotal evidence or our years of experience in negotiating--the consensus is that women use negotiation less than men to get what they want in the workplace.

Ask, prepare and listen are the negotiation mantras we think are helpful to women, particularly as negotiations have become more collaborative than confrontational.

 Ask--get in the mindset to negotiate for what you want, don't assume your hard work will be rewarded and set higher goals.

Prepare--get a wide database, e.g. not just asking women for salary information, gather information from networks and mentors, get factual support and anticipate negotiating ploys and responses.

Listen--elicit needs of the other side through listening and asking open ended questions, silence and the taking of time can add dollars to salary offers,  understand both the relationships and the issues in negotiations through listening, careful listening that enables you to ask inclusive, open ended questions allows for a collaborative solution that satisfies both parties needs.

Some excellent resources we recommend to any woman about to embark on salary negotiations or any other type of negotiation, especially negotiating in the workplace:

Breaking into the Boys Club

Self Nurture Learning to Care for Yourself As Effectively As You Care for Everyone Else

Negotiating Your Salary How to Earn $1000 a minute

Getting Past No

As one woman MBA noted, you have to remember Gandhi's quote , "You don't ask, you don't get" .

Grateful Dead, one page contracts and saving the planet

On Valentine's Day 2008, we prefer to think in black and white (not the traditional Red Valentine nor the au courant Green Valentine).  If Greenpeace UK is right that Loving the Planet is the Best Valentine (see their Green Valentine's Guide), we think the Grateful Dead and an actress in LA have the right approach.

The Grateful Dead apparently insisted on one page contracts with their promoters. Not only did they live life on the edge, but so did their contracts.

And Tamara Krinsky, the once starving actress, printed out pages and pages of scripts, until it struck her to widen the margins. She now has a campaign petition  to Microsoft, at Change the Margins, to set Word's default margins to 0.75.

Like the battle hardened VC we met last year at a clean energy investment conference, we think it's the simple, black and white things that cut costs that will reduce energy consumption.  We believe Less is More when it comes to contracts and saving the planet.

Lawyers You Can Love

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