Apr 1 2026
Amanda DeMatteis: Hi, Josh.
Josh Goodbaum: Hi, Amanda. What are we talking about today?
DeMatteis: I want to talk about non-competes. Let’s say a potential client comes to you. They have a non-compete. Maybe it’s with their current employer, maybe it’s with a previous employer; it doesn’t really matter. They are looking for a new job. What is that employee required to say to a prospective employer about this existing non-compete?
Goodbaum: Well, to start, Amanda, they don’t have any legal obligation to say anything. But they might well want to say something and, at some stage of the process, they probably should.
My first piece of advice is: Don’t lie. If you applied for a job, and your prospective employer asks you whether you have a non-compete, I would tell the truth. This is a relationship that you want to form with your potential employer and then build on. You want to succeed in your new job, and it’s hard to start and build a relationship when it’s based on something false.
As for offering information, the stage of the process matters. I would not submit a cover letter with a job application and mention your non-compete. I would wait to bring up that issue – if your prospective employer doesn’t affirmatively ask – until after you receive a job offer, and then you two are in the same boat. They want to hire you. You want to work there. How are you going to work together to figure out how to deal with this non-compete?
That raises another issue, which is: When do you talk with the employer who holds the non-compete? That might be your former employer (because you already separated from them), or it might be your current employer (because you’re looking to leave a job where you have a non-compete and go to a competitor). Again, in that situation, ideally, you want to have a job offer already; you want to talk with your hopefully-future employer; and you want to figure out together how you are going to strategize around dealing with the former employer.
Is your non-compete unenforceable? Can your new employer back you up? Will they pay a lawyer for you? Will they indemnify you? How will they protect you? Has this come up before with other employees who have left your current or past employer?
And in all of this process, you really want to think about talking with your own lawyer – that is, consulting with an expert employment lawyer who’s experienced in dealing with non-competes and other restrictive covenants – because that lawyer is going to have more experience than you have in dealing with non-competes, and they’ll be in a position to communicate with the lawyer for your potential employer in a privileged way that is going to coordinate your efforts and lead to the best possible outcome.
One further caveat: Some non-competes contain a provision that says that, if you apply for a job or if you accept another job, you need to inform your current or former employer about that job. In other words, you would need to tell your current or past employer if you get an offer from a competitor. So that’s something you want to watch for in your non-compete and make sure that you’re abiding by, or at least talking with an employment lawyer about, before you just accept another offer. You don’t want to breach your non-compete unintentionally.
DeMatteis: Josh, we’ve talked to a lot of employees who are already working for a competitor before they come talk with us about their non-compete. The best practice, if you’re thinking about leaving your employer to go work for a competitor, is to talk with your own employment lawyer as early as possible.
That way, you’re going to get good legal counsel on documents that you can and can’t take from your previous employer, what you should tell your previous employer when you resign, and many other issues. All of those little decisions are pretty critical when it comes to non-competes and restrictive covenants, so you want to be careful that you’re not making a misstep.
Thank you so much for watching, and we’ll see you next time. Take care.
