It's estimated that 20 percent of American employees -- from all different kinds of industries -- are subject to noncompete clauses. In theory, noncompete agreements are designed to protect high-level secrets, client lists and intellectual property from being misused by ex-employees who want to go into business for themselves.
In practice, noncompete agreements can act like a straightjacket, keeping an employee trapped in a job they don't like and for which they aren't fairly compensated.
So, how do you work it out if an employer asks you to sign a noncompete agreement? Refusing to sign outright may not be an option if you want the job, but you can often negotiate for better terms. Here are some tips on how to negotiate a better agreement:
1. Put restrictions on the deal.
The employer may want to get a broad agreement in place. Your job is to narrow it down a little. Work to negotiate a limited geographical area. That way, you can retain your freedom to look for new employment in a different county or state.
You can also aim to shorten the time limits on the agreement. Not being able to work in the same industry for a year is a lot better than not being able to work in an industry for three years. The way technology and business rapidly evolve, a year should be long enough in most fields to make any special information you may have gained from your employment outdated again.
2. Ask for better compensation.
If you're going to be stuck sitting out a year, you might as well be compensated fairly for it. You can ask your employer to agree to pay a percentage of your salary during any period the noncompete clause is in effect.
Having the right advice before you sign a noncompete agreement is always smart. An attorney can help you identify potential problems with any agreement you're about to sign and better explain what options you may have.