Our key employees do not have non-compete or non-solicitation agreements in place, which we know will scare off potential buyers. How do we introduce these agreements on our exit runway without causing friction or resentment?

Question

Tyler Smith · Accepted Answer

Introducing restrictive covenants like non-competes and non-solicitations close to a sale can trigger alarm bells and breed resentment among your team. To avoid this, handle this transition as a routine part of your professionalization process rather than an exit preparation task. The best time to introduce these agreements is during your annual review cycle or when rolling out your long-term incentive plans. Frame these agreements as mutual protections that safeguard the company's proprietary systems, client relationships, and team stability. Offer meaningful consideration, such as a salary increase, a promotion, or eligibility for your new retention bonus pool, in exchange for signing. This ensures the agreements are legally enforceable and fair. Add these compliance steps to your human resources seat on the Accountability Chart, making them a standard onboarding requirement for all future hires. By institutionalizing these employment protections early in your exit runway, you provide potential buyers with the operational security they require while maintaining high morale across your leadership and staff.