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Non-compete agreements

A non-compete can keep you out of your own field after you leave. This guide reads one from a real employment agreement filed with the SEC.

What it costs

If all the work you can do is barred, a year out of your field could cost $535,000 of salary.

Assumes the $535,000 base salary in section 4.1 and no other work you can do outside the radius or for a different kind of business. This agreement also pays severance if the officer is let go without cause. An illustration, built on the assumptions stated here.

The clause, from a real filing

7.4 Non-Competition

… from the Commencement Date until the date one year after his last day of employment with Employer, Officer will not at any time perform duties that are the same as or substantially similar to those duties performed by Officer for Employer … within a fifty (50) mile radius … if those duties are performed for a business that is the same as or substantially similar to the business in which Employer was engaged …
Employment Agreement, Exhibit 10.1, CIK 1947463, Form S-4, filed with the SEC on July 31, 2026. Read the original on SEC.gov
  • High risk

    A year out of your field

    It applies whether you quit or are let go. Section 7.4.2 lifts it in one change in control case, and some states limit non-competes or do not enforce them.

The change to ask for

Before: … from the Commencement Date until the date one year after his last day of employment with Employer, Officer will not at any time perform duties that are the same as or substantially similar to those duties performed by Officer for Employer … within a fifty (50) mile radius …

After: … from the Commencement Date until the date six months after his last day of employment with Employer, Officer will not at any time perform duties that are the same as or substantially similar to those duties performed by Officer for Employer … within a ten (10) mile radius, and only while Employer continues to pay Officer’s Base Salary …

Suggested language to discuss, not legal advice. Six months and ten miles are examples.

Before you sign: the non-compete

  1. Find the restriction. It may sit under Non-Competition, Restrictive Covenants, or Confidentiality.
  2. Check how long it runs after you leave.
  3. Check where it applies: a radius, a state, or everywhere the employer does business.
  4. Check what it stops: the same duties, the same industry, or any work at all.
  5. Check whether it applies if you are let go, and whether you are paid while it lasts.
  6. Check your state’s law. Some states limit non-competes, and some do not enforce them.
Open the one-page checklist to print
Transcript
  1. 0:00This clause can keep you out of your own field.
  2. 0:03It comes from an employment agreement filed with the SEC.
  3. 0:07For a year after you leave, you cannot do the same job for a similar business within fifty miles.
  4. 0:13It applies whether you quit or are let go.
  5. 0:16At this salary, a year out of the field could cost up to $535,000.
  6. 0:21Three limits decide how far it reaches: how long it lasts, how wide the area is, and what work it covers.
  7. 0:29Where you live matters too. Some states ban or limit these, and the rules differ by state.
  8. 0:34Ask for less time, a smaller radius, and pay while it lasts.
  9. 0:39A BeforeJD read marks a clause like this, explains it in plain English, and writes the change to ask for.
  10. 0:46It also drafts the email that asks for it.
  11. 0:49Check your contract for this clause.
  12. 0:52Your first read is free.

Keep reading

Check your contract for this clause.

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BeforeJD is not a law firm. This is informational only, not legal advice.