# Draft Restrictive Covenant Agreement > Guides drafting of a post-closing restrictive covenant agreement and accompanying memorandum where cumulative restriction duration, choice-of-law tensions, and garden leave mechanics require enforceability analysis. - Skill: `finchipaiorg/draft-restrictive-covenant-agreement` (Agent Skill) - Install (CLI): `npx skillmds@latest add finchipaiorg/draft-restrictive-covenant-agreement` - Raw SKILL.md: https://api.skillmd.com/api/skills/finchipaiorg/draft-restrictive-covenant-agreement/raw - Safety review: pending - Works with: Claude Code, Claude.ai, OpenAI Codex - Category: Coding & Dev Tools - Author: FinchipAIOrg (https://skillmd.com/u/finchipaiorg) - Updated: 2026-09-22 - Page: https://skillmd.com/skills/finchipaiorg/draft-restrictive-covenant-agreement --- # Skill: Post-Closing Restrictive Covenant Agreement Drafting ## 1. Subject-matter triage - This task has two outputs: draft the operative restrictive covenant agreement first, then the memorandum that explains and justifies the drafting choices. - If the source set contains more than one triggering relationship, jurisdiction, departure date, or pre-existing restraint, enumerate each before analysis and draft against each applicable scenario separately. - If only one governing law or one triggering employment/relationship path is in scope, say so expressly and avoid blended analysis. ## 2. Failure modes the skill is correcting - The total restraint period is not tested for enforceability when existing covenants and new covenants overlap or run consecutively. - The agreement assumes a single governing law without addressing a forum, services-location, or residence-based enforceability challenge. - Garden leave is drafted without a clear trigger, duration, pay treatment, and interaction with the restrictive period. - The agreement omits a passive investment exception or states it too broadly to survive scrutiny. - Contractor non-solicitation is drafted like employee non-solicitation without tailoring to relationship intensity or access to sensitive information. - Cause-based and no-cause separations are treated the same even where the governing law or deal context calls for different covenant treatment. - The memo describes risks but does not tie each drafting point to a specific enforceability rule and a concrete revision. ## 3. Legal frameworks / domain conventions that apply - Acquisition-related restrictive covenants are generally analyzed under reasonableness principles tied to legitimate business protection; the core variables are duration, scope, and activity restriction. Use the controlling state-law standard that applies to the covenant. - Where the agreement’s governing law differs from the work state, residence, or service location, evaluate whether the chosen law will be respected and whether another state’s restrictive-covenant limits may control under conflict-of-law principles. - Where a prior covenant already binds the founder, the enforceability question turns on the cumulative restraint period and whether the new agreement extends or restarts the clock. - Garden leave should be drafted with a clear invocation right, a definite leave period, and a defined compensation mechanic so the consideration analysis is transparent. - A passive investment carve-out is typically limited to a small minority holding in a public company or comparable liquid market investment, subject to an express threshold. - Independent contractor non-solicitation should usually be narrower than employee non-solicitation and tied to material contact, access to confidential information, or a similar relationship-based limiter. - If termination for cause and without cause change covenant obligations, state that distinction expressly in the operative text. - Cite the controlling authority for each legal proposition used in the memo, including the governing statute, regulation, or leading case for the relevant jurisdiction. ## 4. Analytical scaffolds - Identify every restraint that could apply to the founder, including pre-existing covenants, side letters, equity-related restrictions, and any post-closing covenant in the draft package. - For each restraint, assess: triggering event, duration, activity scope, customer/solicitation scope, geography if any, and whether the drafting is narrower or broader than necessary. - Compare the governing law clause with the location of services, the founder’s residence, and the deal nexus; if they differ, analyze both potentially applicable regimes and explain the drafting implication. - Review any garden leave language for an unambiguous trigger, compensation during leave, whether the leave counts toward the restricted period, and whether the memo should recommend express offset language. - Check for a passive investment exception and confirm it is tied to a defined ownership threshold and market-liquidity limitation. - Review contractor non-solicitation language for overbreadth; tailor it to contacts, responsibilities, or access rather than a blanket ban. - Determine whether cause-based termination modifies the restrictive covenants; if so, align the operative clause and the memo so they match. - For every substantive issue discussed in the memo, state the governing rule, the drafting risk, and the exact revision that should be made. ## 5. Vertical / structural / temporal relationships - Treat temporal sequencing as central: pre-closing covenants, closing date, post-closing leave, and post-termination restraint periods may interact and should be mapped in order. - If a pre-existing restriction already runs from a prior departure or prior closing, analyze how the new agreement affects the remaining run time instead of analyzing the new covenant in isolation. - If the transaction documents contain multiple restrictive regimes for different roles or signing dates, keep them separate and do not average the terms. - If the founder’s obligations change based on termination reason, preserve that distinction throughout the operative clauses and the memo. ## 6. Output structure conventions - Produce the restrictive covenant agreement as a complete operative document with defined terms, covenant provisions, carve-outs, governing law, and standard enforcement language suited to the transaction. - Then produce the drafting memorandum as a separate advisory document that addresses each material covenant issue with controlling authority, enforceability analysis, and a specific drafting recommendation. - In the agreement, incorporate the recommended limitations and exceptions in the text itself; do not leave key protections only in the memo. - In the memorandum, end with a concise Recommended Actions section that assigns each action to a role and ties it to the transaction timing. - Draft both deliverables so they can stand alone in .docx form, with the agreement containing operative clauses rather than narrative summaries.