Q. I am a Senior Vice President of marketing for a global corporation in a specialized field, and I have been offered a severance package to leave my position after a transition period of 6 months during a corporate restructuring. I have been on good terms with the company and would like to keep it that way. But I am concerned about a provision called, "Non-competition and non-solicitation" that says that I won't compete with the company or any of its affiliates, subsidiaries or other related companies for 2 years. This could effectively keep me from working in my field I hate to lose the severance, but they won't budge. Can they really do that?
A. It depends. Of course, you don't have to sign the agreement. But let's face it, it's hard to turn down a lump sum of money that could tide you over during your transition between jobs. If you do sign the agreement, it is possible, if not likely, that the non-compete provision could be enforced in Colorado under these circumstances. While Colorado law voids certain non-compete agreements, they can be enforceable if the scope, duration, and geographic locations are deemed reasonable, and if you qualify as executive or management personnel.
Never sign a non-compete provision in a severance thinking that you will be able to challenge it later. Get legal advice if you do not fully understand every provision in a severance agreement. Not only can you waive important legal rights in a severance agreement, you may be commiting to agreements like "non-competes" that may severely limit your future income. Since you have a good relationship with the company, you may be able to negotiate with them (either with legal counsel or on your own) to remove the provision, to narrow it, or to increase the amount of severance to account for the time you might be out of the market.
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