Posts tagged ‘Non-compete clause’

Negotiating the Non-Sense in your Non-Compete


Matt Barcus
President, Precision Executive Search, Inc
Managing Partner, CivilEngineeringCentral.com
View Matt’s profile & connect with him on LinkedIn

Finally, after months of suffering under a new regime as a result of a reorganization, or after months of being laid off due to a Reduction-In-Force, or after months of pounding your head on the proverbial “glass ceiling,” you have uncovered the perfect opportunity for the next step in your civil engineering career.  After going through three or four rounds of interviews and conducting your own due diligence you find a company that is a good fit professionally, technically, culturally; and the path to your professional goal is crystal clear, assuming of course that you live up to your end of the bargain.  But you are confident in your ability and there is no question in your mind that you’ve got what it takes to climb your way to the top.  The offer comes through, the money is right, the benefits are on target, the performance metrics, though challenging, are attainable, and everything is on the “up-and-up.”  And then you get to the non-compete/non-solicit/non-disclosure employment agreement.  These agreements are no longer just limited to C-Level Executives or Partners, but now they are surfacing for Vice Presidents, Division Managers, and even Project Managers.

Suddenly some of that wind has been taken out of your sail.

Terminology and phrasing limiting you to go to work for ANY competitor within a 100 mile radius of any existing office, or limiting you from contacting any clients or prospective clients (prospective clients, well,  that’s pretty much ANYONE), all while applying to not only to the company you are looking to join, but it all carries over in the event of an acquisition, which would further limit your geography, especially if acquired by a big civil engineering consulting firm with offices throughout the United States.  Oh, and by the way, there is nothing indicating that you would be protected from any of this even in the event that you are laid off, your office shuts down, or if you were given the ultimatum to relocate.  Sounds a little one sided, right?  If left un-negotiated, you would have to switch careers altogether should you separate from the firm.

Putting into effect a non-compete for company executives or partners makes sense.  After all, if they don’t have an ownership stake, they do at least have access to company financials and the intellectual property that has brought the company much success.  They will also have access to clients that they might not have otherwise with other companies.  I am personally not convinced that Non-Compete Agreements are necessary for Project Managers and others who do not have an executive role or who do not have “skin in the game,”  but this is a trending policy in the civil engineering consulting industry.

Whatever the case may be, more often than not there are some areas that you should consider negotiating before accepting “as is” if you are not fully comfortable (please keep in mind I am not an attorney nor do I pretend to be – only in my own home when negotiating with my wife and kids):

-> If you are a company executive or partner, you may want negotiate some sort of severance package to help protect you and your family should you separate from the company as it will buy time for you to secure a new position within the other constraints of the agreement.

->If your non-compete contains geographic restrictions, make sure you would still have the ability to work for a “client” or client side company.  In other words, make sure it is limited solely to competitors, not clients.

->Make sure that the agreement applies only to the company you are working for at the commencement of your employment, not any future acquisitions.  For example – if your employer has 5 or 6 offices, but then is acquired by a national consulting civil engineering firm with offices in every major city across the United States, your options become extremely limited should you not negotiate this ahead of time.

->The non-solicitation of clients is an understandable clause – but if the agreement includes not only existing clients, but potential clients, then again you are limiting your options should you separate as pretty much everyone is a potential client.  Try negotiating to only existing clients or those potential clients that have been proposed to over the past 12, 18, or 24 month period.

->Make sure that the non-compete portion of the agreement is null and void in the event of a lay off, a closing of the office, or an ultimatum to relocate with the company.

I am not an attorney, and neither are you.

No matter how dire your current work situation is, you should always go through a non-compete/non-soliticitation/non-disclosure agreement with a fine tooth comb, or even better, shell out some cash to have an attorney review the document – your wallet may become a little light, but that decision could easily save you thousands of dollars in the end… and much stress as well. You may even find that your non-compete agreement will not hold up in a court of law in your state.

Every agreement is different, and these are just a few thoughts based upon my experience in placing civil engineering professionals with consulting engineering firms.  Any further advice you can give to the civil engineering community on this topic would be greatly appreciated!

civil engineering jobs :: civil engineering resumes :: civil engineering blog :: civil engineering discussion

June 23, 2011 at 10:32 am 5 comments


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