How to Negotiate a Non-Compete Clause

A non-compete doesn't have to be a take-it-or-leave-it proposition. With the right approach, you can often negotiate more favorable terms. Here's how.

Before You Start Negotiating

Know Your State's Law

Non-compete enforceability varies dramatically by state. If you're in California, Colorado, or another restrictive state, you may have significant leverage because the clause may be unenforceable anyway.

Assess Your Leverage

Your negotiating position depends on:

• How much they want you specifically
• Your seniority level
• Alternative job offers
• Your industry's norms
• Whether this is a new hire or existing employee

What to Negotiate

1. Duration

Goal: As short as possible, ideally 6-12 months

Strategies:

• Ask: "What's the minimum duration that would protect your interests?"
• Offer alternatives: "Would you accept 6 months instead of 2 years?"
• Point out industry standards: "Most companies in our space use 12-month non-competes"

2. Geographic Scope

Goal: Limited to where you actually work

Strategies:

• Request limitation to specific cities or states
• Ask for the geography to match your actual territory
• Challenge nationwide restrictions if your role is local

3. Definition of "Competitor"

Goal: Specific list or narrow definition

Strategies:

• Request a defined list of specific competitors
• Add language: "engaged in directly competitive business activities"
• Exclude companies in different market segments

4. Scope of Prohibited Activity

Goal: Limited to your specific role, not any position

Strategies:

• Add: "in a substantially similar capacity"
• Specify prohibited job functions, not just "any employment"
• Carve out different roles at competitors

5. Termination Trigger

Goal: Non-compete doesn't apply if terminated without cause

Strategies:

• Add: "This restriction shall not apply if Employee is terminated without cause"
• Request garden leave (paid non-compete period)
• Tie duration to length of employment

Alternative Offers

Convert to Non-Solicitation

Propose: "Instead of a non-compete, I'll agree not to solicit customers I worked with."

This protects their key concern (customer relationships) while preserving your ability to work.

Offer Enhanced Confidentiality

Propose: "I'll sign a stronger confidentiality agreement if you'll remove the non-compete."

Request Compensation

If they won't modify the restriction, ask for compensation during the non-compete period (garden leave).

How to Frame the Conversation

Opening:

"I'm excited about the role, and I want to make this work. I have some concerns about the non-compete that I'd like to discuss."

Explaining Your Position:

"As currently written, this could prevent me from working in my field for two years. I want to protect your legitimate interests while ensuring I can support my family if things don't work out."

Proposing Solutions:

"What if we limit this to 12 months and only apply it to direct competitors in the Northeast?"

If They Won't Budge

• Get the final terms in writing
• Research enforceability in your state
• Consider whether the opportunity is worth the risk
• Document any verbal assurances about non-enforcement