Latest / Executive Careers with Fexingo: VP, C-Suite, and Senior Leadership Career Strategy / How Senior Leaders Negotiate Non-Compete Clauses
Transcript
- Lucas: So let me start with a number: nearly sixty percent of senior executives — VPs and above — are subject to a non-compete clause in their current employment contract. That's from a 2025 survey by the Corporate Executive Board. Luna: That's a lot of people who can't just walk across the street. Lucas: Exactly. And for a long time, the conventional wisdom was: you sign it or you don't get the job. But I've been watching this shift — especially in the last eighteen months — where senior leaders are actually negotiating non-compete terms before they accept an offer. Luna: So it's becoming a point of leverage, not just a take it or leave it term. Lucas: Right. And the case I want to walk through today is a real one — a former Goldman Sachs partner who moved to a private equity firm in 2025. His original non-compete was eighteen months. He got it down to six months with a tailored garden leave arrangement. Luna: What was his leverage? I mean, Goldman Sachs is famously aggressive with non-competes. Lucas: It was a combination of things. First, he was a specialist — he covered a very narrow sector, structured credit. He could argue that a broad non-compete effectively prevented him from working anywhere in finance, which could be seen as punitive in some jurisdictions. Second, he had the new firm ready to offer a start date, so he could negotiate a delayed start with partial garden leave pay. Luna: Garden leave pay — that's where the old employer pays you during the non-compete period, right? Lucas: Exactly. In his case, he negotiated that Goldman would pay him one hundred percent of his base salary for six months — the reduced non-compete period — rather than the standard fifty percent for eighteen months. That was a win-win: Goldman saved on total payout, and he got full pay and his freedom sooner. Luna: So he effectively traded duration for full compensation. Lucas: Yes. And that's a template I'm seeing more often. But the key is you have to have a credible alternative — a real offer — and you have to be ready to walk. That's the leverage. Luna: Speaking of leverage, I think this is a good moment to mention something. If you're listening and you've found our episodes helpful for navigating your own career moves, we want to keep this show free and accessible. No ads, no sponsors. The way that happens is through listener support at buy me a coffee dot com slash fexingo. It's a simple way to say 'this matters' — and it keeps us independent. Lucas: Yeah, that really does make a difference. And honestly, the research we do for episodes like this one — digging into actual negotiation case studies — that takes time. So if you've ever gotten a useful tip or a new framework from the show, think about it. Luna: Okay, back to the non-compete. So what other levers do senior leaders have besides duration and pay? Lucas: Scope is the big one. Most non-competes are written broadly — 'any business in which the company is engaged.' That could be everything from the core business to a tiny experimental side project. You can ask to narrow it to your specific division or functional area. Luna: So instead of 'any financial services,' it becomes 'structured credit at Goldman Sachs.' Lucas: Exactly. And geographic limits too. If you're a global executive, they'll try to restrict you worldwide. But if your actual client relationships are in, say, the Southeast U.S., you can push for a regional limit. That's a very concrete negotiation point. Luna: And then there's the legal environment. The FTC proposed a rule in 2023 to ban most non-competes, and while it's been challenged in court, some states have already moved. California, Colorado, Minnesota — they've all tightened restrictions. Lucas: That's a huge factor. If you're based in or moving to one of those states, your non-compete may be unenforceable except in very narrow circumstances. And even in states like New York or Delaware, courts are increasingly scrutinizing non-competes for senior leaders — especially if they restrict a person's ability to earn a living. Luna: So if you're negotiating a new role, you can say: 'Look, in this legal climate, a two-year global non-compete is likely unenforceable anyway. Let's agree on something reasonable.' Lucas: That's exactly the language. And you can back it up with data. There's a 2024 study from the University of Utah that found the average non-compete duration for senior finance executives dropped from fourteen months to nine months between 2019 and 2024, purely because of legal pressure. Luna: What about the idea of a 'non-solicit' instead? I've seen some senior leaders propose replacing a non-compete with a non-solicit agreement — promising not to poach clients or colleagues. Lucas: That's a very common alternative. And it's often more acceptable to employers because they care most about protecting client relationships and team stability. A non-solicit can be tailored to specific clients you worked with directly, and a specific list of colleagues you recruited or managed. Luna: So it's a narrower restriction, but it addresses the company's real fear. Lucas: Exactly. And the beauty is, for a senior leader, a non-solicit is often easier to comply with and less likely to be challenged. I've seen CFOs and COOs successfully swap a one-year non-compete for an eighteen-month non-solicit — they get a longer restriction but one they can actually live with. Luna: Let's talk about the actual negotiation moment. When do you bring this up? Before the offer? After? Lucas: Before you accept, ideally. But not during the first interview. You want to build enough rapport and value perception first. I usually advise clients to raise it after the verbal offer, but before the written contract is finalized. That's when you have maximum leverage — they've already decided they want you, and they don't want to lose you over a legal clause. Luna: So you say something like: 'I'm thrilled about the role. I'd like to discuss the non-compete provision to make sure we're aligned on terms that work for both of us.' Lucas: Perfect framing. And you should have your specific ask ready: duration, scope, geography, garden leave pay. You don't want to be negotiating in the abstract. You want to say: 'I'm proposing a six-month restriction limited to your direct competitors in the Northeast, with full base salary during the period.' Luna: And if they push back? What do you say? Lucas: You can reference industry norms. For example, in 2025, the average non-compete for a vp level role in financial services was ten months, according to the same CEB survey. So if they're asking for eighteen, you can say: 'I understand your concern, but the standard for this level role is closer to ten months. Can we meet in the middle at twelve?' Luna: That's specific and reasonable. Lucas: And if they still won't budge, you have to decide how important it is. For some executives, a restrictive non-compete is a dealbreaker — especially if they plan to move industries or start a company. For others, it's acceptable if the role is that good. Luna: I want to go back to the garden leave concept. How does that actually work in practice? You're paid but you don't work for six months? What do you do? Lucas: You're still an employee during garden leave — you're on the payroll, you get benefits, but you don't go into the office or access company systems. You're expected to be available if needed, but it's essentially paid time off. Many executives use it for board work, consulting, or just a breather before the next role. Luna: It sounds like a pretty good deal, actually. Lucas: It can be. But the key is to negotiate it upfront. Some companies will offer garden leave as a default, but at lower pay. You want to negotiate for full compensation — or at least a percentage you can live with. Luna: One last angle: what about non-competes in the C-suite versus VP level? Is there a difference? Lucas: Yes. C-suite executives — CEOs, CFOs, COOs — are often subject to longer non-competes, sometimes two years or more, because they have access to the most sensitive strategic information. But they also have more leverage to negotiate. The CEO of a public company, for instance, can often negotiate a twelve-month non-compete with garden leave at full pay, plus accelerated equity vesting. Luna: So the higher you go, the more you can push back — but the more they want to protect themselves. Lucas: Exactly. And the legal trend is toward more scrutiny. As of June 2026, the FTC's proposed ban is still tied up in courts, but several states have passed laws restricting non-competes for low-wage workers — and that pressure is slowly moving up the income ladder. Some legal experts predict that within five years, non-competes for all but the most senior executives will be significantly limited. Luna: So the smart move is to negotiate now, while you still can. Lucas: That's the takeaway. If you're a senior leader and you're considering a move, don't treat the non-compete as a fixed term. Treat it as a negotiating point. You have more leverage than you think — especially if you have data, a clear alternative, and a willingness to walk. Luna: And maybe a good lawyer. Lucas: That too. But even without one, just by asking the right questions — duration, scope, geography, garden leave — you can often improve your terms significantly. I've seen it happen. Luna: Alright, that's a solid roadmap. Thanks, Lucas. Lucas: Thanks, Luna. And thanks to everyone listening. We'll be back with another episode soon.