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What you should know about negotiating non-compete clauses

Some Texas workers might be asked to sign a non-compete agreement with their employers. If you have been asked to sign one, it’s important to understand the terms.

What is a non-compete agreement?

A non-compete agreement is an agreement employers present to employees who are either entering or leaving the company. The document states what the employee can or cannot do in terms of joining a competing business in the future. The purpose of a non-compete agreement is to protect a company’s interests. Employees are prohibited from sharing or using certain practices or activities that would hurt the company if they were to leave and join a new company or start their own business.

How to negotiate a non-compete agreement with an employer

Typically, a non-compete agreement will cover a certain distance over which an employee is prohibited from working for a competing business. The document also lays out types of businesses or industries that employees cannot share information with if it could potentially hurt the company. However, it’s possible to negotiate certain terms of a non-compete agreement with an employer.

If a competing business isn’t a direct threat to the employer, there is leeway in negotiating the non-compete agreement. You should also consider what you want for the future before signing the document. For example, if your ultimate goal is to form your own company in the same industry or one that’s similar, you might not want to wait for the specific amount of time the employer asks you to refrain from doing that.

If you have already left the company and another company is interested in your skills, talking directly to your former employer is wise. There may be certain details that separate the new company from your former one that doesn’t make things uncomfortable for the former company. Make sure to get it in writing if your former employer agrees.

A non-compete agreement could be a hindrance to your career goals. Always negotiate before signing.