Efficient and Effective Legal Representation

What if a severance agreement includes a non-compete clause?

On Behalf of | Jul 18, 2023 | Employment Law |

When you move on from a job, a severance agreement can offer important support as you look for new opportunities. Unfortunately, that support can come with a price, and employers may ask you to sign a non-compete agreement in order to receive your severance package. What should employees know about non-compete clauses in severance agreements?

A non-compete agreement could significantly impact your career.

Non-compete agreements limit your ability to work for your employer’s competitors for a specific amount of time and and sometimes within a specific geographic area. These agreements also prevent employees from starting a new business that might compete with their former employer. While these agreements protect confidential information from competitors, they can also significantly limit an employee’s career and lead to lower wages.

Unfortunately, non-compete clauses are a common feature of severance agreements. This often means that employees are asked to choose between limiting the future of their career and providing for their family today.

What if my employer asks me to sign a non-compete agreement?

When faced with a non-compete clause in a severance agreement, you may wonder whether you have other options. You may also be unaware whether the agreement is legal after recent decisions that have limited the use of non-compete clauses.

Consider also that proposed non-compete agreements and even those extant between the parties at the time of separation, are not “all or nothing.” Rather, the terms may be negotiated, limited, and customized.

If your employer has asked you to sign a non-compete agreement to receive your severance package, it can be particularly important to ensure that the terms are fair before you sign the agreement. The right legal guidance can help you fully understand the terms of the agreement, determine whether signing is the right choice for you and negotiate terms that protect your interests and career.