The offer arrives, and it is a good one. Better pay, a team you liked, interesting work. You start reading the contract on your phone, and halfway down there is a clause you have never seen before. For twelve months after you leave, you may not work for any competing business, anywhere. You are not sure who counts as a competitor. You are fairly sure it could include most of the companies you would want to work for next.
Do not skip past it because you are excited, and do not panic either. Clauses like this are common, and what they mean in practice varies enormously.
Start by working out what kind of clause it is. A restriction on working for competitors is different from a promise not to approach the company's customers, or not to recruit your former colleagues, or to keep its secrets. Confidentiality usually lasts anyway, and is fair enough. A broad ban on working in your field is a much bigger thing.
Then learn how they are treated where you live, because the difference is huge. In some places, California being the best known example, most of them cannot be enforced at all. In many others, courts will only uphold one if it is reasonable in length, area and what it protects, and a sweeping clause may be struck out entirely. In some countries, Germany for example, the employer usually has to pay you a share of your salary for the restricted period for it to be valid. Several governments have been reviewing these rules, so check what is current rather than what a colleague remembers.
Read the detail. How long does it last? What area does it cover? How is a competitor defined? Is there a garden leave period, where you are paid to stay at home instead? Does it apply however you leave, including if you are made redundant?
The most useful moment to deal with this is now, before you sign. You have the most leverage you will ever have, and asking is normal. You could say, I am very keen to accept. Could we narrow the restriction to direct competitors in this specific product area, for six months? Many companies use a standard template and will adjust it for someone they want.
If it is still unclear, a short conversation with an employment lawyer or your union costs far less than finding out later.
A clause you understand is just a term of the deal. A clause you skimmed is a decision somebody else made for you.
– Asael Shinder
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