Non-Compete in NDA

searcher profile

September 14, 2023

by a searcher from Harvard University - Harvard Business School in Miami, FL, USA

Hello community - can you please share any experience or best practices you have regarding non-compete clause in an NDA? I'm approaching a prospective seller who would like 3 years of non-solicitation of the business of any of it's current or past clients.

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commentor profile
Reply by an intermediary
from Wesleyan University in Granville, OH, USA
I have seen noncompete both regarding clientele and talent. Both of these are sensible concerns from a seller's perspective. As with all negotiations, I would think about how this could restrict my future opportunities. If you're looking at many different sectors and are early in the process, the non-compete may be unlikely to have an impact. My position in that situation would be to accept it, maybe trying to shorten the time frame as much as the counterparty is willing. A second component of the negotiation is to think specifically about what the threat is to the counterparty. If possible, narrow the definition of the non-compete as much as possible while still addressing the concern. In the end, I find the request legitimate - it addresses a real risk when disclosing information to a current or future competitor. It's worth working through.
commentor profile
Reply by a searcher
from Harvard University in Miami, FL, USA
Thank you Daryl. Good to hear that it is a relatively common.
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