This clause creates different levels of restriction that decrease over time. For example, it might say "you can't work for direct competitors for 12 months, but you can work for indirect competitors after 6 months." This is fairer than a flat restriction because it acknowledges that the company's need to protect itself gets weaker as time passes and your knowledge becomes outdated. Courts generally view step-down clauses favorably because they show the employer is being reasonable.
If you see a step-down clause, this is actually good news—it means the employer is thinking fairly about the restriction. Try to negotiate the steps to be more favorable to you: for example, push for the "indirect competitor" window to start at 3 months instead of 6, or ask for a complete release after 18 months instead of 24. ---
Frequently Asked Questions
What does this clause mean in simple terms?
This clause creates different levels of restriction that decrease over time.
Why should I care about this clause?
For example, it might say "you can't work for direct competitors for 12 months, but you can work for indirect competitors after 6 months." This is fairer than a flat restriction because it acknowledges that the company's need to protect itself gets weaker as time passes and your knowledge becomes outdated.
What are my options?
Courts generally view step-down clauses favorably because they show the employer is being reasonable.