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Can I contest non-compete clauses in a severance package?

If your employer terminates you, you may receive a severance package as a part of the process. On the one hand, this is better than the alternative, which is no severance package at all. Depending on the nature of your employment, you may or may not have the right to receive a severance package. On the other hand, you should never accept your severance package at face value without carefully scrutinizing it. This is particularly true when it comes to non-compete clauses, which may seriously affect the type of employment you can obtain subsequent to your termination.

In most cases, the non-compete clause included in your severance agreement merely restates the terms of non-competition that you agreed to as a part of joining the employer in the first place. It is wise to check the terms of your severance against the terms of your employment contract to determine if there exist any inconsistencies you can use to negotiate better terms.

Even if the non-compete clause in your severance agreement is identical or practically identical to the non-compete clause in your employment contract, you may still have grounds to fight aspects of it. Look closely at these three areas within the clause:

  • Geographical restrictions that may keep you from working in your home city or state
  • Field restrictions that may bar you from accepting other work in your field rather than simply a direct competitor
  • Time restrictions that may last much longer than you can accept reasonably

If your severance agreement's non-compete clause has a scope that is too wide and restricts your ability to work beyond reason, the human resources department of your employer may tailor the terms to something that serves the employer's interests while still granting you fair opportunity to transition to other employment. If your employer refuses to listen to your concerns, you may need to consider the legal tools you have available to fight this sort of unjust practice in court.

Protecting your rights in the workplace is not only essential for your own well being and success, but also for the well being of all workers. Take great care to address this issue fully for the protection of your own rights as well the rights of many others around you.

Source: Salary.com, "9 Things To Know About Your Severance Package," accessed June 01, 2018

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