Cross Border Joint Venture Governance Structure Design Fundamentals
Cross-border venture governance succeeds when public constitutional filings match private agreements, locking control, deadlock, tax transit, and exit terms.
Non Compete Tail
Meaning
Restrictive covenants extend the prohibition against competing with a former employer for a period after the termination of the working relationship. A non compete tail prevents a founder or executive from immediately joining a rival firm or starting a competing venture. It is designed to protect the trade secrets and customer relationships of the company.
The tail is limited by law to a reasonable duration and a specific geographic area.
Duration Limit
The Duration Limit of non compete tail typically ranges from six months to two years. Courts often refuse to enforce a tail that lasts longer than necessary to protect the legitimate interests of the employer. The exact length depends on the seniority of the person and the speed of innovation in the industry.
Geographic Scope
A Geographic Scope of non compete tail restricts the area where the person can work. This might cover a specific city or an entire country.
Consideration Payment
Mandatory Consideration Payment of non compete tail involves the money paid to the individual in exchange for their agreement. In some jurisdictions, a non compete is only valid if the company pays a portion of the salary during the restricted period. This payment compensates the individual for the loss of employment opportunities.