Latest / The Internal Move Podcast with Fexingo: Lateral Roles, Internal Transfers, and Staying at Your Company / The Internal Transfer Noncompete You Signed Years Ago
Transcript
- Lucas: You have been at your company for three years. You see an internal role in a different division that is a perfect next step. You apply. You get an interview. Your current manager gives you a glowing reference. Then HR comes back and says: sorry, you cannot take this role because of the noncompete you signed when you joined. Luna: Wait. A noncompete blocking an internal transfer? I thought those only applied if you left for a competitor. Lucas: That is what most people think. And in many cases, that is exactly what happens. But a growing number of companies are now enforcing noncompete clauses to block lateral moves within the same organization, especially when the new division could be seen as competing with the old one. Luna: So if I work in the snack foods division and want to move to the beverage division at the same parent company, they could say no because technically those product lines compete for shelf space? Lucas: Exactly. And that is exactly what happened to a marketing manager at a large consumer goods firm. She had signed a standard noncompete when she was hired — it restricted her from working on any competing product for twelve months after leaving the company. She never imagined it would apply to an internal move. But when she applied for a role in the company's plant-based protein unit, her original division argued that plant-based protein competed with their dairy products. HR upheld the noncompete. She was stuck. Luna: That is wild. And it is not just consumer goods. I bet this happens in tech too. Lucas: Absolutely. Think about a software engineer at a big tech company who wants to move from the cloud infrastructure team to the advertising team. The company could claim those are separate business units with conflicting interests. And if your contract has a broad noncompete, they have the legal cover to block you. Luna: And I am guessing most employees have no idea this clause is even in their contract. You sign it on day one, you never look at it again. Lucas: Right. And that is the trap. You might have signed a noncompete three, five, even ten years ago, before the company reorganized into divisions that now compete with each other. The clause is still binding. Luna: So what can someone actually do? If you are in the middle of a transfer and HR drops this on you, are you just out of luck? Lucas: Not necessarily. The first step is to ask HR for a waiver. Some companies will grant one if both the current and future managers agree. But you need to ask explicitly and in writing. Do not assume they will offer. Luna: And if they say no? Lucas: Then you can negotiate a carve-out. You say: 'I understand the noncompete is meant to protect the company from me using proprietary information at a direct competitor. The internal role I am applying for does not involve that. Can we amend the clause to exclude this specific division?' That is a reasonable ask. Luna: And you have to do that before you accept the new role, I assume. Lucas: Yes. Once you have already moved, it is much harder to unwind. And if you push too hard, you risk souring the relationship with your current team. Luna: But what about the bigger picture? I feel like this is something people should check before they even start looking for an internal role. Lucas: Exactly. That is why I recommend everyone — whether you are planning a move or not — dig out your original employment contract and read the noncompete clause. It is usually a few paragraphs buried in the fine print. Look for language like 'any business that competes with any product or service of the company.' That is the broadest kind. Luna: And if you see that, what do you do? You cannot exactly go to your boss and say 'hey, I am planning to leave your team, can you loosen this?' Lucas: You can approach it differently. You can say: 'I am committed to growing my career here. I want to make sure my contract supports internal mobility. Can we update the noncompete to clarify that it does not apply to internal transfers?' Some progressive companies are actually doing that proactively. Luna: Speaking of progressive companies, there is a broader trend here. A lot of states are cracking down on noncompetes. California already bans them. But that does not help if your company is headquartered in a state that enforces them. Lucas: And even in California, some companies still try to enforce them with choice-of-law clauses. So the safest approach is to get the language changed in your own contract. And this is a negotiation you can do at any time, not just when you are leaving. Luna: I want to circle back to something you said earlier, that single sentence you can add to your next employment contract. What is it? Lucas: It is: 'This noncompete shall not apply to any internal transfer or promotion within the company or its subsidiaries.' That is it. If you get that in writing, you have removed the biggest barrier to internal mobility. Luna: That is gold. And it is so simple. Lucas: It is simple, but it requires you to ask. And most people never do because they do not know the risk exists. Luna: You know, this episode really makes me think. If we have helped you see a potential roadblock in your own career, or given you a practical step you can take, that is exactly why we do this show. And if you find value in these conversations, listener support is what keeps it ad-free. You can find us at buy me a coffee dot com slash fexingo. Lucas: And it genuinely helps. We don't have a big production team — it is just the two of us and our editor. So every bit of support lets us keep digging into these overlooked career topics. Luna: Alright, back to the noncompete trap. Lucas, what about people who have already signed a contract and cannot change it now? Is there any recourse if they get blocked? Lucas: There is. You can escalate to the company's legal department or even the chief HR officer. In some cases, the noncompete was never intended to apply internally — it was just poorly drafted. A legal review might get it overturned. Luna: But that takes time and guts. Lucas: It does. And that is why the preventive step is so much better. Before you even apply for an internal role, know what your contract says. If you find a broad noncompete, start the conversation with your manager or HR early. Frame it as a career development issue, not a legal challenge. Luna: And if you are the manager listening, what should you do? Because I imagine some managers might be happy to keep a good employee blocked in their current role. Lucas: That is a real dynamic. But smart managers know that blocking internal mobility hurts retention in the long run. If you prevent someone from moving internally, they will eventually leave externally. So the best managers proactively support contract updates that enable mobility. Luna: There is a study on that, right? Internal mobility increases overall tenure. Lucas: Yes. LinkedIn data shows that employees who move internally stay at the company an average of 41 percent longer than those who don't. So it is in the company's interest to remove barriers. Luna: But the noncompete is such a blunt instrument. It was designed for external moves, and now it is being used for internal ones. Lucas: Exactly. And that is why awareness is the first line of defense. If you know the clause exists, you can address it before it becomes a problem. Luna: So to wrap up: dig out your contract, read the noncompete, and if it is broad, ask for a clarifying amendment. That one conversation could save you from a nasty surprise later. Lucas: And if you are already in the middle of a transfer and HR drops the noncompete bomb, ask for a waiver or a carve-out. It is not a guarantee, but it is your best shot. Luna: Great advice. Next episode, we will look at another hidden clause: the training repayment agreement. Lucas: That is a good one. See you then.