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PLAYBOOK TEMPLATES
Executive Employment Agreement
An Executive Employment Agreement sets forth compensation, duties, and protections for senior executives. This playbook highlights negotiation around severance, equity awards, and restrictive covenants.
Restrictive Covenants
Negotiation strategy
Ensure the restrictive covenants are narrowly tailored to protect legitimate business interests without being overly restrictive. Consider the specific role and access to sensitive information when negotiating terms.
Negotiate for reasonable geographic and temporal limits to ensure future employment opportunities are not unduly restricted. Seek clarity on what constitutes competition and solicitation.
Essential elements
1
Non-Compete Clause
Restricts employment with competitors.
2
Non-Solicitation Clause
Prevents solicitation of clients.
3
Non-Disparagement Clause
Prohibits negative statements.
Action framework
ACCEPT
Propose edits to narrow overly broad restrictions, ensuring they are reasonable and enforceable.
EDIT
Reject clauses that are excessively restrictive or lack clear justification.
ADD
Add clauses if missing, ensuring they protect business interests while being fair.
PRO TIP
Always consider the enforceability of restrictive covenants in the relevant jurisdiction before finalizing terms.
Real-world examples
FAVORABLE
Balanced Non-Compete Clause
"During the term of this Agreement and for a period of [insert duration] following the termination of this Agreement, the Executive shall not, directly or indirectly, engage in or be employed by any business that competes with the Company within [insert geographic area]."
NEUTRAL
Standard Non-Solicitation Clause
"For a period of [insert duration] following the termination of this Agreement, the Executive shall not, directly or indirectly, solicit or attempt to solicit any business from any of the Company's clients."
UNFAVORABLE
Overly Broad Non-Compete Clause
"The Executive shall not engage in any business that competes with the Company anywhere in the world for five years following termination."
Alternative scenarios & positions
High-Level Executives
For high-level executives, broader restrictions may be justified due to access to sensitive information and strategic roles. However, ensure they remain reasonable and enforceable.
Entry-Level Employees
For entry-level employees, restrictive covenants should be minimal, focusing on non-disclosure rather than non-compete, to avoid unnecessary limitations on career growth.
Jurisdiction-Specific Laws
In jurisdictions like California, non-compete clauses are generally unenforceable. Focus on non-solicitation and confidentiality agreements instead.
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