JUST SAY “NO” TO NON-COMPETES
Do you know my nick name for “non-competes”?
Niche killers.
A non-compete is a provision that restricts your ability to seek and work with similar clients. And what is a group of similar clients? A niche!
💣Non-competes are the enemy of strong positioning.
Here are a couple of examples of non-compete provisions to be on the lookout for.
Easily recognized:
Non-competition. During the Term of this Agreement and for a period of 1 year after the termination of this Agreement, Contractor shall not engage in any employment, consulting, or other activity that competes with the business, proposed business or business interests of Company, and Contractor will not assist any other person or entity in doing so, without Company’s prior written consent.
Any language about “proposed business or business interests” is especially far reaching and deadly. Never, never, never agree to give up your existing relationships.
Not as easy to recognize:
Exclusivity of Services: During the term of this Agreement, Consultant may perform similar services for Company’s competitors, provided that: (1) Consultant notify Client in writing of Consultant’s acceptance of an assignment from another entity within two business days; (2) Client determines in its sole discretion that such assignment will not create a conflict of interest with Client; and (3) such assignment does not prevent Consultant from providing the Services agreed to under this Agreement.
While this seems a bit more reasonable (s/), it guarantees that you will need to breach either (i) the agreement with the competing entity, since virtually all services agreement require you to keep the engagement confidential, or (ii) the agreement with this client because your confidentiality obligations to the competing entity means you cannot comply with this provision.
Here is how I suggest you respond: DELETE THE ENTIRE PARAGRAPH.
Always try to avoid a non-compete provision. Point the client to the non-disclosure and non-use obligations, which are surely elsewhere in the agreement. So long as you are using your expertise, not the client’s confidential information, there is no reason to limit who you can work for.
I know that you know the advantages of niches, so I won’t repeat them here. So I’ll end with long story short: When it comes to non-compete provisions for engagements using your expertise, Just 👏🏽 Say 👏🏽 No 👏🏽.