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> they will have to pay an additional %30 of the total contract value to exercise it. So if you want to join a competitor, they can prevent it by paying you 30

• PragmaticPulp 6y ago
  The idea is that the payment is compensation for the fact that you'll have to continue searching for another job for a few more months if they block you from going to a competitor. Great if you can get it without restrictions. However, I'd expect most HR/legal minded people to want it structured similar to periodic severance payouts. That is, the 30% is paid out bi-weekly over a certain number of months, but the payments stop as soon as the person gets another job. This counteracts the perverse incentive.
  • motohagiography 6y ago
    Interesting, that scheme wasn't included, but the real value of non-competes is they reduce your leverage for comp internally within the company because your manager doesn't have to make their offers directly competitive to competitor companies because you've banned yourself from leaving for one. If it's going to cost them %30 to keep me from going to a competitor, it means they probably won't, and I can use the competitive environment to negotiate a raise or a bonus. Of course everyone has a plan until they get punched in the face, so YMMV, but negotiations are about that equilibrium of leverage.