WUOMFM

Check out these tips before you sign that non-compete clause

Apr 8, 2016

Credit flickr user Government of Alberta / http://michrad.io/1LXrdJM

Nearly one in four American workers are asked to sign a non-compete agreement when they take a new job.

This used to be reserved for CEOs and TV anchors, but not anymore.

An article in Fortune reported the sandwich chain Jimmy John's has a non-compete clause which would prevent former employees from working at any nearby restaurant that gets at least 10 percent of its revenue from sandwiches for two years.

Norman Bishara is an associate professor at the Ross School of Business at the University of Michigan.

He has some suggestions for anyone taking a job that may require them to sign a non-compete:

1) Ask upfront

"Ask for it upfront, read it and look at it. Amazingly a lot of people don't read these contacts that could have a huge impact on the rest of their career," he says. "Read it, and kind of figure out what you're being asked to give up."

He adds that non-compete agreements aren't always stock documents and can often be negotiated.

2) Avoid being surprised

"General good business advice for when you're starting a job is, ask what you're being asked to sign. You can be subtle about it and go into the employer and say, you know, 'when I show up on the first day, what am I going to have to sign?' and dig a little deeper. Especially if you're in a field where non-competes are common."

3) Know the law

"If the stakes are high enough, you should go talk to a lawyer and take the contract terms. Any employer that really wants you should give you that breathing room," he says.

He adds that some states are adding laws that require employers to give potential employees notice of a non-compete agreement ahead of time.

4) Keep a copy

If you've signed a non-compete agreement and are considering taking a new job, Bishara says the first step is to figure out whether your new job would compete with your old one.

"Keep a copy and know where it is, so you can actually see what you agreed to in terms of what the scope is, what the risk is if you're really leaving for a competitor," he says.

He tells us it's important to negotiate the clause when entering the job, but also while leaving it. If you spot any ambiguity, Bishara says it's worth trying to negotiate.

Listen to our full conversation with Norman Bishara above.