Non-compete clauses are a common feature of many employment contracts, especially in highly competitive industries where companies seek to protect their intellectual property, trade secrets, and customer relationships. These clauses typically prohibit departing employees from working for a competitor or starting a competing business for a certain period of time, usually between six months to two years.
While non-compete clauses can be an effective tool for employers to safeguard their interests, they can also create tension and disputes between employers and employees. Employees may feel that the non-compete clause restricts their ability to find suitable work or advance their careers, while employers may feel that the clause is necessary to protect their investment in their business.
As a mediator with extensive experience in employment law, I have mediated many cases involving non-compete clause disputes. In my experience, these disputes can be resolved more efficiently and amicably through mediation than through litigation. Mediation allows parties to work together with a neutral third party to find a mutually agreeable solution that satisfies their interests.
As a mediator, my role is to help parties understand their legal rights and obligations and to facilitate constructive communication between them. I often begin by asking parties to identify their underlying interests and concerns, as opposed to their positions or demands. For example, an employee may be concerned about their ability to earn a living and support their family, while an employer may be concerned about protecting their competitive edge and preserving their client relationships.
In one case I mediated, a departing employee was subject to a non-compete clause that prohibited her from working for a competitor in the same industry for two years. The employee had accepted a job offer from a competitor that she believed was not in direct competition with her former employer, but her former employer disagreed. The parties were at an impasse and were mired in litigation over the issue. Through mediation, we were able to identify the parties’ underlying interests and concerns. The employee was upset that she would not be able to work for the new company that she had already started working for in a role that offered good career advancement and an above-market salary. The employee also felt angry and that it was unjust for her employer to be able to dictate where she could and could not work.
The employer, on the other hand, was concerned about protecting it’s trade secrets and customer relationships as the employee’s new company had recently taken a large client of theirs and was a known bidder in another business opportunity it was also competing for. By understanding these interests, we were able to explore creative solutions that satisfied both parties. Ultimately, the employer agreed to modify the non-compete clause to allow the employee to work for the competitor so long as she did not work with the customers the employer was most concerned about. The employee agreed to additional confidentiality and non-solicitation provisions to address the employer’s concerns.
Once parties have identified their interests, we can begin to explore various options for resolving the dispute. These options may include modifying the non-compete clause to make it more reasonable, negotiating a settlement or severance agreement, or finding alternative ways for the departing employee to work for the employer without violating the clause (as occurred in the case I referenced above).
In many cases, parties can avoid the expense, stress, and uncertainty of litigation by reaching a satisfactory resolution through mediation that addresses their underlying interests and concerns. As a mediator, my goal is to help parties reach a resolution that is fair, reasonable, and practical, and that allows them to move forward with their lives and careers. Non-compete clauses are a complex and often contentious issue in employment law, but they can be effectively resolved through mediation. By focusing on parties’ underlying interests and exploring creative solutions, mediators can help employers and employees alike reach mutually agreeable solutions that avoid costly and time-consuming litigation.