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How a Legal Journalist Got Fired for a Non-Compete

192 points by weatherlight 11y ago

bluejekyll 11y ago
I can see non-competes as valuable for people who know business details that would be considered trade secrets (and only for a limited period of time). But for people further down the ladder, this seems like an extremely high burden.
- crdoconnor 11y ago
  >I can see non-competes as valuable for people who know business details that would be considered trade secrets It would still be in the public interest to do away with them at that level.
  - bluejekyll 11y ago
    I was unaware of the UK laws around this. That would take care of this pretty quickly even at the senior levels. If the company really believes that you have valuable knowledge, then the burden is on them (in terms of financial burden) to compensate you for not taking the other job. Obviously, they would only do this in the cases where they are worried that it really could harm their competitive advantage. It would also save companies money in the long run given the number of instances that two companies go to court over things like this.
- golergka 11y ago
  That conversation should take place before you sign something. After you sign something, it's not important if it's reasonable or not: you have to uphold it.
  - masklinn 11y ago
    > After you sign something, it's not important if it's reasonable or not: you have to uphold it. It very much is important, and you don't necessarily have to uphold it. In the vast majority of jurisdictions unreasonable[0] contractual clauses are unenforceable and may even be sanctionable. [0] what is or is not unreasonable being the primary variable. CNC clauses are generally unreasonable in california (reasonable CNC are related to goodwill and shared businesses) for instance, and in mainland europe they are limited and often must be compensated for their whole duration e.g. in Germany the leaving employee must be paid at least half their gross salary for the whole CNC term (no more than two years) and unreasonable clauses can be invalidated, lest the whole CNC be invalidated.
  - eropple 11y ago
    This idea is not upheld in any part of American jurisprudence. Plenty of contractual conditions are straight-up not enforceable; this is why so many have severability clauses.
  - tomg 11y ago
    > After you sign something, it's not important if it's reasonable or not: you have to uphold it. This is simply not true. Trivial examples include a contract without consideration, or an apartment lease with clauses that attempt to restrict rights granted by local law (very common in NYC). Most non-competes in the state of California are not enforceable as well, even if you agree to it.
  - gherkin0 11y ago
    > After you sign something, it's not important if it's reasonable or not: you have to uphold it. That's frankly a ridiculous idea that clearly leads to injustice. Contracts are often between people who are not equals, where one party has less ability to negotiate or walk away. If the weaker party does not have extra protections outside of the contracting process, the stronger party could use its power to abuse them.
  - dragonwriter 11y ago
    > After you sign something, it's not important if it's reasonable or not: you have to uphold it. This may be your personal moral preference, but it very much is not an accurate reflection of contract law (at least, not in any US jurisdiction.)
    - spacecowboy_lon 11y ago
      No it has to be "justicabale" even if you sign a contract that signs away for statutory rights that clause would be void. You cant sell yourself into slavery for example.
  - st3v3r 11y ago
    No. These agreements are immoral. There should be absolutely no obligation to uphold it.
    - pc86 11y ago
      That's a pretty odd definition of "immoral."
      - st3v3r 11y ago
        I fail to see how saying a clause who's only reason for existing is to prevent someone from earning a living in their field is immoral is odd.
- e0 11y ago
  Trade secrets are already specifically protected, even without non-compete clauses (https://www.law.cornell.edu/wex/trade_secret https://www.law.cornell.edu/wex/trade_secret). A former employee that divulges trade secrets will get into trouble for violating that.
  - bluejekyll 11y ago
    Thanks for sharing that. If any lawyers are reading this, I would be curious as to why non-competes exist if the above is true. I suppose I knew that implicitly, i.e. joining a competitor and divulging your previous employers secrets feels illegal, regardless of law. In theory, if trade secrets are already protected, then either the non-compete's are setup as a double protection, or they are only being used to restrict movement. (neither of which seems fair in the economic sense)
    - sokoloff 11y ago
      A salesperson's or financial adviser's Rolodex is not a trade secret in most circumstances and a public list of a firm's past/current clients never is (by definition), but all can be very valuable for a warm-introduction/client-poaching scenario.
    - acveilleux 11y ago
      Clients often follow their old account executive they like when that person leaves. Nothing illegal in that... Sometimes someone figures out a better solution to a problem than their current employer and they sucessfully go out and implement it. That's not a trade secret... The solution is wholly different. A good example of the later case can be seen in the healthcare field. The same person architected the Cloverleaf interface engine (which uses TCL as glue language) and then went on to implement the highly popular Corepoint interface engine (which generally tries to avoid the use of programming/scripting language). Corepoint is eating cloverleaf's lunch in the marketplace, the main similarity between them is what they do, how they do it is very different.
- cmdkeen 11y ago
  The UK's approach is generally to have "gardening leave" - if you want to be able to ensure I can't work for a competitor for 6 months after leaving you agree to pay me my full salary for 6 months after I leave in return for me not working anywhere else. It's fairly common in the client facing world of finance for instance to stop someone walking off with all of their clients to a new firm. For me at least it seems a fairly sensible compromise - 6 months in that example is really at the top end of the spectrum, usually it is 1-3 months. That's plenty of time to have a holiday, learn some new skills and arrive at your new job refreshed and ready to go. The length and scope of UK non-competes is fairly heavily restricted by the courts and the onus is on the employer to justify the business need. An example like in the article would be unthinkable.
  - acveilleux 11y ago
    Non competes in Canada are also enforced very selectively. The standard legal advice is to structure the agreement such as it still stands (severability) even if specific parts of it are struck down because of how likely that is. For non compete to work, the affected person has to have specific knowledge to protect (usually client accounts) and the restriction needs to be narrow to specific industry ("software" is not good enough, "Point of Sales software for Bars and Restaurants" probably is), duration needs to be only as short as it needs to be and geographically bounded. The only time broad non-compete really hold up is for things like sales of a business where the founders are barred from immediately competing with the company they just sold.
    - cookiecaper 11y ago
      It should be noted that in the U.S., there are really 50 individual jurisdictions. Contract law is a state matter. Some states may be better or worse at upholding non-competes. California in particular is known for disregarding non-competes. Also, many non-competes go totally unenforced. It's rare that a suit over a non-compete is actually filed for low-level employees. In the linked article, the writer wasn't fired because her old company sued her for competing, she was fired simply because the new company found out she had signed a non-compete and presumably wanted to avoid any potential lawsuit-related shenanigans. It's also possible that the company is trying to establish a precedent for voluntary, pro-active enforcement of competitors' non-competes within the industry specifically because they know the courts are unlikely to uphold them. If all the employers just agree not to hire someone who worked at a competitor within the last 2 years, then they don't need to worry about what the court thinks (though they may have to face the DOJ in a wage-fixing scandal, like the computer animation industry has).
FussyZeus 11y ago
How is a non-compete legal anyway? You're basically saying that a person can't get a job with a competitor in the same industry, how is anyone with any decent skillset supposed to get a new job without somewhat violating a noncompete?
- enraged_camel 11y ago
  Most non-competes aren't enforced because they can't be (due to the reason you mentioned). BUT it still adds a level of risk to people looking to jump ship.
  - ghaff 11y ago
    And many firms just don't want to deal with the potential hassle/exposure of hiring someone who has a non-compete that could potentially come into play. In a former role, one or two of the larger firms in the space were known for having non-competes they were known for trying to enforce that basically said that if someone left--even if they were laid off--they couldn't do the same type of job for a year. Someone I know who left one of those firms just took a year off before going out on their own. The firm I was at wouldn't even think of touching someone to whom those non-competes applied.
- fweespeech 11y ago
  Depending on the state and situation, it frequently isn't legal. But yeah, non-competes are unethical bullshit.
- Zikes 11y ago
  It completely removes your negotiating powers in regards to raises and promotions, as well. What incentive does an employer have to pay their employees fairly when they know that said employee is legally prohibited from working anywhere else? It seems the surest way to hamstring your own career is to sign a non-compete.
  - Xylakant 11y ago
    That sort of depends. My last non-compete contained the provision that if the employer needs to continue paying the full wage during the time of the non-compete. That doesn't fully remove the lock-in but it makes it a costly option, leveling the playing field somewhat.
deleted 11y ago
[deleted]
golergka 11y ago
How do you sign something first and then complain when it gets enforced? Even if she wouldn't get fired from her next job, her getting another job in a field covered by non-compete already shows that she didn't pay attention to her obligations and easily violated them. I have been in this situation myself: a company that wanted to hire me presented me with a non-compete agreement. I naively think that I should expect contracts and obligations that I sign to actually be upheld by all involved parties, including myself. If I signed it, nobody would fire me from another position — because I don't violate contracts that I sign, and I wouldn't apply for another position in the same field. Instead, I declined to sign it in the current form, explained my problems with it to an HR, and one day later got an edited agreement that had a non-compete with a reduced scope (only companies making similar products).
- derekp7 11y ago
  The problem happens when you accept a job offer, quit your previous job, then during new hire orientation you are given a stack of "standard HR forms" to sign. You are never told "Take these home and have your lawyer look them over" (how many of us even have a lawyer?), and are given the impression that everything is boilerplate.
  - vonmoltke 11y ago
    On top of that, you always run the risk (however small) that the company's response to your red-lines will be "you're fired".
  - frandroid 11y ago
    That's usually part of the employment contract, so it's not something you'll be shown after having gotten hired, and if it was, it would have even less standing than if the clause was included in the employment contract. When I got hired by Microsoft, I was specifically told to get a lawyer to review the contract before I sign it. I did and my lawyer promptly told me the same at the person here, which is that the two non-compete clauses were so broad as to be unenforceable. When a "partner company" to my MSFT division kept hiring our staff, Microsoft didn't try to enforce the non-competes, but instead threatened to sue the partner if they kept at it.
mc32 11y ago
What's the situation in New York, do you have give cause? Or it it at will and you can fire for no reason? Interesting here is that it's the new employer firing an employee for non compete rather than the previous employer trying to enforce it against the signator.
- chimeracoder 11y ago
  > What's the situation in New York, do you have give cause? Or it it at will and you can fire for no reason? Generally, New York is 'at-will', though it depends on the circumstances of employment: http://www.ag.ny.gov/labor/can-you-be-fired http://www.ag.ny.gov/labor/can-you-be-fired Note that New York City also has a some additional protections that are not present state-wide[0]. I'm not sure if any of those come into play here. [0] For example, discrimination against gender identity is protected in NYC and Long Island, but not state-wide. IIRC New York also protected against discrimination for sexual orientation before SONDA (state-wide law) was passed.
- jchendy 11y ago
  >Interesting here is that it's the new employer firing an employee for non compete She wasn't technically fired for non-compete. From the article: > On the application there was a question asking me to check a box acknowledging I wasn’t subject to any restrictive covenants that would prohibit me from doing my job at Reuters. I checked it. [...] >I was technically fired for “dishonesty,” because of the box I had checked.
mbrundle 11y ago
I've worked for several startups (US and UK) where the contracts contained very broad restrictions like this non-compete. Fortunately my wife is a lawyer and has helped me to read and red-line them, and then push back and get these sections rewritten. This is something I would NEVER have thought to do by myself, and I don't know many other tech people who do this either. I don't know the legality of these clauses, but my impression is that the companies don't really care - it's easy to put overly restrictive language into their contracts because they have little to lose out of it, as an employee is unlikely to undergo expensive future litigation to sue over it. Bottom line - there needs to be (a) some low cost support mechanism for people to be able to check whether their contracts contain anything overly broad that could hurt them later, and (b) some way of educating potential employees that they should read contracts in detail, and that they can challenge contracts and push for changes before signing them, and not to treat them as a binary sign as-is/no-sign decision.
- njs12345 11y ago
  Luckily, in much of Europe, overly broad non-competes aren't enforceable: https://en.wikipedia.org/wiki/Non-compete_clause#Europe https://en.wikipedia.org/wiki/Non-compete_clause#Europe
  - chinathrow 11y ago
    Read the article. It's not about being enforceable. It's about having a liability if someone is under such an non-compete.
    - hodgesrm 11y ago
      I did. :) The liability would not exist if the non-compete were unenforceable as it is in places like California.
      - chinathrow 11y ago
        No, even if it's unenforceable across the globe it would increase the risk of litigation. Hence a liability.
idsout 11y ago
Where I worked years ago, I told my employer flat out that I wouldn't sign the non-compete that he handed me. He asked me again two weeks later to sign it. I refused, explaining how it would essentially give me no bargaining power and could keep me from getting future work. That was the last I heard about it. I continued working with some awesome people (my employer included) for another two years.
golergka 11y ago
> You are never told "Take these home and have your lawyer look them over" (how many of us even have a lawyer?), and are given the impression that everything is boilerplate. I'm sorry, but you have to be told such obvious things, you shouldn't be considered an adult who's able to take care of herself.
- mfringel 11y ago
  You're not sorry. Just accuse the person. It's more honest.
- st3v3r 11y ago
  You're quite sorry, but not for the reasons you outlined.
  - pc86 11y ago
    Surely you could make the same point without baseless personal attacks.
- dang 11y ago
  This comment breaks the HN guidelines. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newswelcome.html https://news.ycombinator.com/newswelcome.html Please post civilly and substantively, or not at all. We detached this subthread from https://news.ycombinator.com/item?id=11059109 https://news.ycombinator.com/item?id=11059109 and marked it off-topic.
vonnik 11y ago
Fwiw, non-competes are unenforceable in California.
- dragonwriter 11y ago
  Non-competes are mostly unenforceable in California. But you definitely shouldn't just sign one and assume it won't be enforceable in your case.
  - fryguy 11y ago
    Assuming one did such a thing, would it be possible to take them to court and get a summary judgement that the clause of the contract is unenforceable and to be removed, so they can't use that as pressure against your new company as in the instance in the article?
    - dragonwriter 11y ago
      It might be possible to commence a legal action for a declaratory judgement (a summary judgement is a different thing) on the matter (declaratory judgement rules vary by jurisdiction.)
jimbokun 11y ago
“We are confident that our employment practices comply with all applicable laws, and we remain committed to maintaining the highest standards in our ethical, journalistic and employment practices.” Oh, please. The overly broad non-compete demonstrates a complete lack of ethical standards in your employment process. You're really just trying to say you are just as scummy, but no more scummy, than the prevailing standard for employment practices in the U.S. Which is a standard largely devoid of any ethical considerations whatsoever.
- stygiansonic 11y ago
  Agreed - these kind of boilerplate statements are so common that they virtually carry no weight anymore. It's almost just a standard "checkbox platitude" that any large size company will be expected to mention as a default response. (These statements are probably just there to provide some level of deniability when an employee does something bad, to say that it's not part of the company culture - which may or may not be true) As an example, Enron: "We are dedicated to conducting business according to all applicable local and international laws and regulations, including, but not limited to, the US Foreign Corrupt Practices Act, and with the highest professional and ethical standards" [0] 0. http://www.agsm.edu.au/bobm/teaching/BE/Cases_pdf/enron-code.pdf http://www.agsm.edu.au/bobm/teaching/BE/Cases_pdf/enron-code...
- bigtones 11y ago
  "We are dedicated to conducting business according to all applicable local and international laws and regulations, including, but not limited to, the US Foreign Corrupt Practices Act, and with the highest professional and ethical standards." - Enron Code of Ethics http://www.agsm.edu.au/bobm/teaching/BE/Cases_pdf/enron-code.pdf http://www.agsm.edu.au/bobm/teaching/BE/Cases_pdf/enron-code...
  - mikeash 11y ago
    When somebody states so strongly that they are following the law, you should be really suspicious that something is up. Like how if a hotel strongly advertises "our rooms are really, really clean," run away.
philjr 11y ago
I am curious, given the length of time she was employed at her new employer and her statement saying her editors were aware of this, whether this was just the HR compliant reason she was let go.
- srussellkraft 11y ago
  The editors in the legal news department knew; that doesn't mean the corporate side knew or cared until Law360 sent its letter. I was let go because of the non-disclosure of the non-compete - I can assure you there was no other reason. In fact, HR didn't even need a reason to fire me, but they still gave me one.
- timv 11y ago
  There's some confusing language in the article that might make you think that she worked at Reuters (the new employer) for a long time. In fact she was only there for a few weeks: ... who Thomson Reuters fired within weeks after hiring her in September The bit that confuses it is this: I also later found out that every editor in my section at Reuters had been well aware of the non-compete for years What I think she's saying is that the editors at her new employer were well aware (and had been "for years") that Law360 (her old employer) used these non-competes, and (by implication) that she'd be subject to one. It gives the impression that she worked there for years, but that seems to just be an unintended consequence of the phrasing.
derekp7 11y ago
Something I don't understand -- a non compete is between an individual and their (previous) employer. The new company hiring the employee has NO contractual or legal obligations to the former employer -- so why the tendency towards firing? And if the former employer contacted the new one, making legal threats in order to get a person fired, isn't that itself illegal? (Wrongful interference with Employment Relationship).
- bravo22 11y ago
  I am not a lawyer but I believe this is because there is a tort for inducing someone to break their contract with a third party. Therefore as the new employer they'd be on the hook.
  - stygiansonic 11y ago
    Even when the new employer has not been sued, there are cases where they have paid the previous employer to settle the non-compete, as was the case with a CEO Nortel hired from Motorola: "The two companies were involved in a brief legal dispute last year after Nortel announced it had chosen Motorola's former chief operating officer, Mike Zafirovski, as its next CEO. Citing non-compete agreements, Motorola sued Zafirovski in October. The dispute was settled a few days later when Nortel agreed to pay $11.5 million to end the matter. Under the terms of that October settlement, Zafirovski and Nortel agreed not to recruit Motorola employees." (Not trying to say this case is anything like that of a much lower-level journalist as described in the article. That seems unfair and harsh) http://www.infoworld.com/article/2674269/networking/nortel-appoints-ex-motorola-exec-as-operations-chief.html http://www.infoworld.com/article/2674269/networking/nortel-a...
- dragonwriter 11y ago
  > Something I don't understand -- a non compete is between an individual and their (previous) employer. The new company hiring the employee has NO contractual or legal obligations to the former employer Well, this part is wrong. Once they become aware of the contract, they risk the potential of liability for tortious interference. [0] > And if the former employer contacted the new one, making legal threats in order to get a person fired, isn't that itself illegal? So long as there was no misrepresentation involved, I don't see how it would be illegal. What law do you think would be broken? [0] https://www.law.cornell.edu/wex/intentional_interference_with_contractual_relations https://www.law.cornell.edu/wex/intentional_interference_wit...
leroy_masochist 11y ago
One important thing to note is that often, when you leave a company, they will offer you a severance package in return for signing an agreement. This may happen if you are fired, or also if you leave on your own accord. IANAL, but I've dealt with this situation and my key takeaways are as follows: 1. Pay a lawyer to read the document for you and provide advice. 2. There are major differences in state law, and jurisdiction is important. For example, if you worked for Google in NY[0], and your contract was a NY-based contract, and there was a harsh noncompete in it[1], and you subsequently took a job in California that violated the terms of the non-compete, it doesn't matter that your new job is in California and Google's HQ is in California and Alphabet is domiciled in Delaware. You signed, and are potentially in violation of, a contract whose potential violation would be adjudicated in New York. 3. Upon receiving advice from your lawyer, and bearing in mind the importance of state jurisdiction, ask your former employer to make changes to the agreement as you see fit, especially if there is an aggressively worded non-compete. 4. Don't believe them when they say "this is just a formality". Read the fine print and understand what it means. [0]: Has already been mentioned a couple times in this thread, but California is a much more employee-friendly state than NY. Non-competes are essentially unenforceable, as are non-poach agreements. It's my understanding that disparagement clauses are also a lot harder to enforce in CA, but IANAL. [1]: To be clear, I am not sure whether this would be the case at Google specifically, just using a well-known California-based company as an example.
- arethuza 11y ago
  Worth noting that in the UK it is pretty standard for your employer to pay for your lawyer (not their lawyer) to review your "compromise agreement" - there is a standard fee of £500 or so for this which a decent employment lawyer will be able to get a decent amount of work done even if their hourly rate is much higher. I left my previous employer a couple of years ago and it ended up with a fair bit of negotiation and it was all covered under the standard fee. The particularly nice thing is that they bill your employer, not you!
  - arrosenberg 11y ago
    Interesting. In the US, I would almost never use a lawyer paid for by someone else. I'd always assume the lawyer's client is whoever is paying them.
exelius 11y ago
This is the general problem when you have two parties with an asymmetry of power enter into an agreement with each other. The more powerful entity will spend time iterating over the process and identify every possible way they can be threatened. They will write contractual language that errs on the side of protecting the company. The less powerful entity will not argue any of this language for fear of no longer being allowed to engage the more powerful one. They don't know what to look out for anyway because they are inexperienced at entering in to these kinds of contracts. This is a problem for more than just employment contracts. We expect individuals to have to negotiate against highly-paid professional negotiators for even the most essential activities in our lives.
- crispyambulance 11y ago
  The good news is that most employers don't actually try to enforce non-competes unless the violation is egregious (like poaching clients). This particular case might be a cynical and calculated action to, as the article says, "send a message" to other young employees looking to move on. It could be the aggressor here has been suffering from a brain drain and this is how they've decided to deal with it.
  - mikeash 11y ago
    I don't know that this is good news. Limited enforcement is why they can get away with such clauses in the first place. A remarkable number of people will be placated by this when they really shouldn't.
  - exelius 11y ago
    Yeah, I realize that many non-competes don't get enforced, but the fact is that those companies will continue to demand them because the non-compete protects them in a small percentage of cases (regardless of its impact on their employees). The companies have zero downside from the NC but it can significantly affect workers who may feel they have no choice but to sign it if they want a job. Hell, many of the non-competes are likely unenforceable, but so few people ever push back on them their legality is never tested.
cdnsteve 11y ago
Never ever sign a non-compete, ever.
- billmalarky 11y ago
  From a position of power, of course. But the article is about jr employees who don't have much of a negotiating position.
- jchendy 11y ago
  For certain industries, that statement is equivalent to "never get a job."
  - st3v3r 11y ago
    Which is why the law needs to change to ban them completely. This isn't something the free market is going to fix.
    - gozur88 11y ago
      Sure it is. If the employer wants you, and you refuse to sign, they'll still hire you. If you can't find an employer who wants you badly enough, then work in another industry. You don't have to read very far on this page to find an example of someone who refused to sign an NC and was still hired.
      - st3v3r 11y ago
        No it won't. And there are anecdotes, that's it. There are just as many of people who felt they would be fired if they refused to sign. The free market will not fix this problem while the majority of employers hold the majority of the power in this situation.
hodgesrm 11y ago
Blanket non-competes undermine the creative destruction process in modern economies. They will end up hurting the companies using them by making it harder for successful firms to expand quickly and keeping less successful firms afloat longer. The problem is individual companies lose little in the short run by putting them on their own employees. The answer is to make non-competes unenforceable across the US in the way they are in California, which makes them generally unforceable but adds reasonable exceptions for situations like selling a company to an acquirer.
- LordKano 11y ago
  I have been asked to sign non-compete agreements by a couple of employers. One of them was just a legally worded agreement to not poach customers or go to work for a customer within 18 months of ending employment. That made sense to me and I agreed to it. I wouldn't sign a non-compete that forbade me from going to work for a competitor.
  - hodgesrm 11y ago
    Same here. Unfortunately most people either don't take the time to think through the consequences or do not have a choice about work that allows them to push back. I have similar feelings about binding arbitration, another area where corporate lawyers have gone crazy in recent years.
    - LordKano 11y ago
      In one case, I needed the job and a non compete was a condition of employment. Instead of signing, I wrote in cursive "Won't Agree" on the signature line. It may not hold up in court but it was enough to satisfy my personal ethics. If I decided to do something that was contrary to the agreement, I wouldn't be violating my own code of honor.
      - dalke 11y ago
        http://www.rudyrucker.com/blog/2010/09/10/what-was-alan-turing-like/ http://www.rudyrucker.com/blog/2010/09/10/what-was-alan-turi... > 1942, age 30. [Alan] Turing joined the Home Guard so he could learn to shoot. “[Turing] had to complete a form, and one of the questions on this form was: ‘Do you understand that by enrolling in the Home Guard you place yourself liable to military law?’ Well, Turing, absolutely characteristically, said: There can be no conceivable advantage in answering this question ‘Yes’ and therefore he answered it ‘No.’ … And … he was duly enrolled, because people only look to see that these things are signed at the bottom.” He learned to shoot, but he refused to attend parades, and the apoplectic chief officer confronted him, and Turing said, “You know, I rather thought this sort of situation could arise…If you look at my form you will see that I protected myself against this situation.” He’d decided on the “optimal strategy if you had to complete a form of this kind. So much like the man all the way through.”
st3v3r 11y ago
Non-competes are immoral, and anyone who uses them deserves to be ruined so bad they have to live under a bridge. I hope her employer gets sued into oblivion.
at-fates-hands 11y ago
As someone who worked at West Publishing and then Thompson West and its current iteration Thompson Reuters, I have some insight into why this happened. Many of Reuters businesses are starting to face more serious competition. There was a time when Reuters owned the media business. Now smaller, more nimble companies are coming in and giving them a LOT of competition. Legal reporting is one of these areas, and Law360 has been eating into their market share in several regions. As such, Thompson goes out of its way to try and hire their help. It gives them more of an insight into what the company is doing. For years, Thompson West used to hire Lexis sales people just to find out what they were doing. Reuters still does the same thing. None of the information is confidential, but it gives Reuters a lot of information into how they train their people, the areas of law they focus on, how many reporters are on a certain beat, etc. Any kind of information they can get, they do. Of course this isn't done in a formal way, it's more off the cuff stuff you hear around the lunch table, or during an training session. Law360 probably realized this and called in their ace card - the NDA. Tie it up in court, or just hamper the reporter in trying to get a new gig and their problem is solved. This is why Law360 sent out the letter about having "critical and sensitive confidential and proprietary information". Simply out, this is a resource war, Reuters is getting beat and uses employees from other companies to gain a competitive advantage. She just got caught in the middle is all.
NotHereNotThere 11y ago
Anybody find it weird that Law360 had the journalist sign the Non-Compete on her first day along with other HR forms? Every time I've had job offers that included a Non-Compete, the contract was always to be signed at the same time as the offer.
brightball 11y ago
Perks of a right-to-work state: broad non-competes are unenforceable for exactly this reason. You have to have specific and reasonably defined scope in order for it to be viable.
zekevermillion 11y ago
I find that even corporate lawyers are frequently ignorant of the laws applicable to post-employment restrictions. In NY these covenants are enforceable only to the extent that they protect the "legitimate business interests" of the employer, under BDO Seidman v Hirshberg. Those interests do not include preventing employees from practicing their trade, though some sleazier employers seem to think that is part of the game. In this case, it sounds like the employer is threatening some sort of trade secrets misappropriation claim, which would not be surprising as this usually accompanies any noncompete claim. However, it's hard to imagine what protectable trade secrets a "content" author would learn. I mean, how to write content is not a trade secret, it's a skill of the trade.
- phonon 11y ago
  You can read about that here...at Law360! http://www.law360.com/articles/558083/bdo-seidman-continues-to-rule-ny-restrictive-covenants http://www.law360.com/articles/558083/bdo-seidman-continues-...
  - zekevermillion 11y ago
    Typical of products and services marketed toward lawyers, law360 requires a silly subscription to read content that is largely already public info. Maybe the trade secrets that the Reuters journalist stole have something to do with the secret of convincing people to cross the paywall of this obnoxious publication! Anyway, here's a Google Scholar link to the opinion, which is self-explanatory: https://goo.gl/Vzq0XG https://goo.gl/Vzq0XG
    - phonon 11y ago
      You can read the article in full if you google the title and click the result link.
djrogers 11y ago
I see a lot of advice here to never sign a non-compete form. Sounds reasonable, but I have another possibly simpler suggestion. I've been asked to sign 3 non-compete agreements in the course of my career, in spite of working the entirety of it in California, where they're useless. When I got the first one, I consulted a lawyer who told me as much and suggested I sign it with all of the non-compete language redlined out. I've done that with all 3 of them, and have never once gotten so much as a comment about it from my employers. The hiring manager is happy to get al his paperwork, HR is apparently happy to have a bunch of stuff to file away, and I'm pretty sure legal either knew I was in the right or they never even looked at it.
- ryandrake 11y ago
  You got lucky. Lots of places will insist that you either sign their documents unmodified or GTFO.
coldcode 11y ago
I worked at a place once that had a not only non-compete, but barred me from buying anything from a supplier the company used (including Walmart). I objected and crossed it out before signing. Never came up again. A lot of these agreements are legally useless but often put in just in case it might be useful later.
chrisbennet 11y ago
Very sad. I recently gave my 3 page (really 2.5 pages) client services contract to a client and they came back with their own 9 page "standard contract" for contractors. (I'm a developer.) I couldn't believe how overreaching their contract was. The most egregious paragraph stated that if I introduced a bug I would be liable for not just what they paid me - I would be liable for their estimated loss of profits !!! I quoted that part of the contract and wrote back: "Nice try but yeah, no." I had my lawyer go over it and take out all the stupid stuff and we came to an agreement. Lesson: Read the contract. If you find that the contract is unduly unfair, ask if you can cross out the parts you don't like. If they say yes, turn it over to your lawyer. Lesson: There is no "standard contract". Lesson: If they say "It's a formality that we'll never enforce." Cross it out. ("Then you won't mind if I cross it out.") Lesson for contracts [my lawyer taught me this]: If you put something egregiously one sided in your contracts you will break trust with the other party. In my case it triggered a "Whoa, where else are they trying to screw me?" response which triggers the "this is job for my lawyer" response. If the contract is for your enemies, do whatever you want. If it is designed for parties that you want to work with, it's sending the message that you can't be trusted is not a good way to start the relationship.
- mcv 11y ago
  I have renegotiated terms of almost all my freelance contracts. Usually, a non-compete was the main culprit. Generally, the non-competes don't come from the client, but from a mediator that wants to prevent me from bypassing them and working directly for the client, which is fair. But sometimes they're still ridiculously broad. For example: I'd already worked for a major bank, quit that project because of a new baby, and when I looked for a new project, found one at the same bank through a different recruitment agency. They wanted a non-compete on all my work for that bank. That was obviously not fair, so I got it reduced to only the department where I would be working. I'd be free to work for any other department.
- kyrra 11y ago
  Similar story: My dad was part owner of the business which he got out of 10 years ago. The company went bust a couple years ago and the debt collectors started trying to get what they could. One of those was a laundry service that would wash uniforms of the employees. My dad had signed the contract for it 25+ years ago to start the account going. On the contract it stated my dad was personally liable for owed fees. But when he originally signed it, he crossed out those 2 words (personally liable) and turned it over signed. He pointed this out to the debt collectors when they came knocking and they stopped bothering him.
kafkaesq 11y ago
Meanwhile, the HR flackey at Law360 who incompetent advise her still has their job: When I signed the agreement, the HR representative who conducted my orientation called it a formality and told me it just meant I couldn’t freelance for a competing site while still working there.
- csense 11y ago
  > who incompetent advise her That was very competent advice from the point of the company -- the HR person convinced her to sign the provision the company wanted her to sign, the company didn't have to face a choice between agreeing to strike the non-compete or letting her walk, and there was no record of the misleading "sales pitch" the HR representative used (which might have served as evidence of conflicting intentions, allowing a court to strike the non-compete provision on the grounds that the parties didn't intend it to be binding, or even caused future liability for the company if the HR rep's description of the non-compete crossed the line between legal sales techniques "oh that's not important, you don't want to think too hard about this part of the thing, everybody signs it" and illegal fraudulent misrepresentation "it says X" when it clearly it actually says Y which is totally different). It sounds like the HR person did their job competently.
sparky_z 11y ago
"I also later found out that every editor in my section at Reuters had been well aware of the non-compete for years." I thought she'd only been there for a month. What am I missing here?
- srussellkraft 11y ago
  I later found out that other reporters had run into trouble when moving from Law360 to Reuters, but those were before my time. Law360 has had a non-compete since around 2011.
- paulclinger 11y ago
  I read it as they knew the situation with Law360 non-competes in general, which would apply to her as well.
chippy 11y ago
When I was a freelancer working on my own, a few companies would include a non compete clause. I challenged them on this always and they were all very happy to alter the wording. It's about the wording mostly, and about definition of competition. For example if I am working for a web agency shop that does e-commerce websites for sports and I am just working on a site for a surf shop, I would alter the clause to read "in the realm of surf shops" rather than competition in general. They were happy to change it because it kept the spirit of the agreement, what they actually meant there. Yeah, I was fine not making directly competing in a specific domain, but I wasn't going to be limited by contract in competing in a general sense. It was also clear that reducing from 12 months to 6 months is usually acceptable also. Now. The worst clause in a permanent contract is the other works / open source projects etc. They sometimes want to own all your code even the things you do in your spare time. They will ask for a list of all projects you contribute to before working, and if you want to contribute to something new in your spare time you will need approval from management. Now, I think this is very unreasonable, and I've pushed back on this so much that I've rejected job offers because of it. What I do in my own time is my business.
CyberDildonics 11y ago
I was faced with a non compete clause that would have barred me from working in the same industry for 2 years. I said I wasn't ok with. They said 'it isn't usually enforced'. I said 'then it shouldn't be in there'. I was told 'they don't usually allow any changes' (and this was a big company). The result was that they did change it and send me a new contract. Companies make a huge play for legal rights with contracts. Usually you have wasted a lot of time to get to that point since they haven't sent you a template in the first place. Suddenly there is an unreasonable amount that you are giving up for the privilege of working for someone. Selective enforcement is bullshit. Anything in the contract can be used as leverage against you if the company doesn't like the position they are in at any particular moment.
gizi 11y ago
The internet has completely changed contracting for me. The contract is the email thread up to the point at which we have an agreement. If the counter-party suggests that we sign another document than that, he is a liar and a cheater, and I will not do business with him. In those circumstances, non-compete clauses will have been discussed during the mail thread. If we discussed and we agreed to them, they are valid. Otherwise, they are not. I do not understand that anybody would still agree to sign a contract document drafted solely by someone else. If it was not drafted together, it is bound to be abusive, and it is always the party who did not participate in its drafting who will be abused. I have always imposed my will or else walked out of bad deals, regardless of whether the counter-party is an individual or a large company. What difference does it make?
chrismcb 11y ago
Outside of selling your company why do we have these and why are they enforceable? Well I know why we have them, but why are they allowed to exist? What is even worse are companies forcing noon compete on essentially unskilled workers

192 points by weatherlight 11y ago

I can see non-competes as valuable for people who know business details that would be considered trade secrets (and only for a limited period of time). But for people further down the ladder, this seems like an extremely high burden.

crdoconnor 11y ago
>I can see non-competes as valuable for people who know business details that would be considered trade secrets It would still be in the public interest to do away with them at that level.
- bluejekyll 11y ago
  I was unaware of the UK laws around this. That would take care of this pretty quickly even at the senior levels. If the company really believes that you have valuable knowledge, then the burden is on them (in terms of financial burden) to compensate you for not taking the other job. Obviously, they would only do this in the cases where they are worried that it really could harm their competitive advantage. It would also save companies money in the long run given the number of instances that two companies go to court over things like this.
golergka 11y ago
That conversation should take place before you sign something. After you sign something, it's not important if it's reasonable or not: you have to uphold it.
- masklinn 11y ago
  > After you sign something, it's not important if it's reasonable or not: you have to uphold it. It very much is important, and you don't necessarily have to uphold it. In the vast majority of jurisdictions unreasonable[0] contractual clauses are unenforceable and may even be sanctionable. [0] what is or is not unreasonable being the primary variable. CNC clauses are generally unreasonable in california (reasonable CNC are related to goodwill and shared businesses) for instance, and in mainland europe they are limited and often must be compensated for their whole duration e.g. in Germany the leaving employee must be paid at least half their gross salary for the whole CNC term (no more than two years) and unreasonable clauses can be invalidated, lest the whole CNC be invalidated.
- eropple 11y ago
  This idea is not upheld in any part of American jurisprudence. Plenty of contractual conditions are straight-up not enforceable; this is why so many have severability clauses.
- tomg 11y ago
  > After you sign something, it's not important if it's reasonable or not: you have to uphold it. This is simply not true. Trivial examples include a contract without consideration, or an apartment lease with clauses that attempt to restrict rights granted by local law (very common in NYC). Most non-competes in the state of California are not enforceable as well, even if you agree to it.
- gherkin0 11y ago
  > After you sign something, it's not important if it's reasonable or not: you have to uphold it. That's frankly a ridiculous idea that clearly leads to injustice. Contracts are often between people who are not equals, where one party has less ability to negotiate or walk away. If the weaker party does not have extra protections outside of the contracting process, the stronger party could use its power to abuse them.
- dragonwriter 11y ago
  > After you sign something, it's not important if it's reasonable or not: you have to uphold it. This may be your personal moral preference, but it very much is not an accurate reflection of contract law (at least, not in any US jurisdiction.)
  - spacecowboy_lon 11y ago
    No it has to be "justicabale" even if you sign a contract that signs away for statutory rights that clause would be void. You cant sell yourself into slavery for example.
- st3v3r 11y ago
  No. These agreements are immoral. There should be absolutely no obligation to uphold it.
  - pc86 11y ago
    That's a pretty odd definition of "immoral."
    - st3v3r 11y ago
      I fail to see how saying a clause who's only reason for existing is to prevent someone from earning a living in their field is immoral is odd.
e0 11y ago
Trade secrets are already specifically protected, even without non-compete clauses (https://www.law.cornell.edu/wex/trade_secret https://www.law.cornell.edu/wex/trade_secret). A former employee that divulges trade secrets will get into trouble for violating that.
- bluejekyll 11y ago
  Thanks for sharing that. If any lawyers are reading this, I would be curious as to why non-competes exist if the above is true. I suppose I knew that implicitly, i.e. joining a competitor and divulging your previous employers secrets feels illegal, regardless of law. In theory, if trade secrets are already protected, then either the non-compete's are setup as a double protection, or they are only being used to restrict movement. (neither of which seems fair in the economic sense)
  - sokoloff 11y ago
    A salesperson's or financial adviser's Rolodex is not a trade secret in most circumstances and a public list of a firm's past/current clients never is (by definition), but all can be very valuable for a warm-introduction/client-poaching scenario.
  - acveilleux 11y ago
    Clients often follow their old account executive they like when that person leaves. Nothing illegal in that... Sometimes someone figures out a better solution to a problem than their current employer and they sucessfully go out and implement it. That's not a trade secret... The solution is wholly different. A good example of the later case can be seen in the healthcare field. The same person architected the Cloverleaf interface engine (which uses TCL as glue language) and then went on to implement the highly popular Corepoint interface engine (which generally tries to avoid the use of programming/scripting language). Corepoint is eating cloverleaf's lunch in the marketplace, the main similarity between them is what they do, how they do it is very different.
cmdkeen 11y ago
The UK's approach is generally to have "gardening leave" - if you want to be able to ensure I can't work for a competitor for 6 months after leaving you agree to pay me my full salary for 6 months after I leave in return for me not working anywhere else. It's fairly common in the client facing world of finance for instance to stop someone walking off with all of their clients to a new firm. For me at least it seems a fairly sensible compromise - 6 months in that example is really at the top end of the spectrum, usually it is 1-3 months. That's plenty of time to have a holiday, learn some new skills and arrive at your new job refreshed and ready to go. The length and scope of UK non-competes is fairly heavily restricted by the courts and the onus is on the employer to justify the business need. An example like in the article would be unthinkable.
- acveilleux 11y ago
  Non competes in Canada are also enforced very selectively. The standard legal advice is to structure the agreement such as it still stands (severability) even if specific parts of it are struck down because of how likely that is. For non compete to work, the affected person has to have specific knowledge to protect (usually client accounts) and the restriction needs to be narrow to specific industry ("software" is not good enough, "Point of Sales software for Bars and Restaurants" probably is), duration needs to be only as short as it needs to be and geographically bounded. The only time broad non-compete really hold up is for things like sales of a business where the founders are barred from immediately competing with the company they just sold.
  - cookiecaper 11y ago
    It should be noted that in the U.S., there are really 50 individual jurisdictions. Contract law is a state matter. Some states may be better or worse at upholding non-competes. California in particular is known for disregarding non-competes. Also, many non-competes go totally unenforced. It's rare that a suit over a non-compete is actually filed for low-level employees. In the linked article, the writer wasn't fired because her old company sued her for competing, she was fired simply because the new company found out she had signed a non-compete and presumably wanted to avoid any potential lawsuit-related shenanigans. It's also possible that the company is trying to establish a precedent for voluntary, pro-active enforcement of competitors' non-competes within the industry specifically because they know the courts are unlikely to uphold them. If all the employers just agree not to hire someone who worked at a competitor within the last 2 years, then they don't need to worry about what the court thinks (though they may have to face the DOJ in a wage-fixing scandal, like the computer animation industry has).

FussyZeus 11y ago

How is a non-compete legal anyway? You're basically saying that a person can't get a job with a competitor in the same industry, how is anyone with any decent skillset supposed to get a new job without somewhat violating a noncompete?

enraged_camel 11y ago
Most non-competes aren't enforced because they can't be (due to the reason you mentioned). BUT it still adds a level of risk to people looking to jump ship.
- ghaff 11y ago
  And many firms just don't want to deal with the potential hassle/exposure of hiring someone who has a non-compete that could potentially come into play. In a former role, one or two of the larger firms in the space were known for having non-competes they were known for trying to enforce that basically said that if someone left--even if they were laid off--they couldn't do the same type of job for a year. Someone I know who left one of those firms just took a year off before going out on their own. The firm I was at wouldn't even think of touching someone to whom those non-competes applied.
fweespeech 11y ago
Depending on the state and situation, it frequently isn't legal. But yeah, non-competes are unethical bullshit.
Zikes 11y ago
It completely removes your negotiating powers in regards to raises and promotions, as well. What incentive does an employer have to pay their employees fairly when they know that said employee is legally prohibited from working anywhere else? It seems the surest way to hamstring your own career is to sign a non-compete.
- Xylakant 11y ago
  That sort of depends. My last non-compete contained the provision that if the employer needs to continue paying the full wage during the time of the non-compete. That doesn't fully remove the lock-in but it makes it a costly option, leveling the playing field somewhat.

deleted 11y ago

[deleted]

golergka 11y ago

How do you sign something first and then complain when it gets enforced? Even if she wouldn't get fired from her next job, her getting another job in a field covered by non-compete already shows that she didn't pay attention to her obligations and easily violated them. I have been in this situation myself: a company that wanted to hire me presented me with a non-compete agreement. I naively think that I should expect contracts and obligations that I sign to actually be upheld by all involved parties, including myself. If I signed it, nobody would fire me from another position — because I don't violate contracts that I sign, and I wouldn't apply for another position in the same field. Instead, I declined to sign it in the current form, explained my problems with it to an HR, and one day later got an edited agreement that had a non-compete with a reduced scope (only companies making similar products).

derekp7 11y ago
The problem happens when you accept a job offer, quit your previous job, then during new hire orientation you are given a stack of "standard HR forms" to sign. You are never told "Take these home and have your lawyer look them over" (how many of us even have a lawyer?), and are given the impression that everything is boilerplate.
- vonmoltke 11y ago
  On top of that, you always run the risk (however small) that the company's response to your red-lines will be "you're fired".
- frandroid 11y ago
  That's usually part of the employment contract, so it's not something you'll be shown after having gotten hired, and if it was, it would have even less standing than if the clause was included in the employment contract. When I got hired by Microsoft, I was specifically told to get a lawyer to review the contract before I sign it. I did and my lawyer promptly told me the same at the person here, which is that the two non-compete clauses were so broad as to be unenforceable. When a "partner company" to my MSFT division kept hiring our staff, Microsoft didn't try to enforce the non-competes, but instead threatened to sue the partner if they kept at it.

mc32 11y ago

What's the situation in New York, do you have give cause? Or it it at will and you can fire for no reason? Interesting here is that it's the new employer firing an employee for non compete rather than the previous employer trying to enforce it against the signator.

chimeracoder 11y ago
> What's the situation in New York, do you have give cause? Or it it at will and you can fire for no reason? Generally, New York is 'at-will', though it depends on the circumstances of employment: http://www.ag.ny.gov/labor/can-you-be-fired http://www.ag.ny.gov/labor/can-you-be-fired Note that New York City also has a some additional protections that are not present state-wide[0]. I'm not sure if any of those come into play here. [0] For example, discrimination against gender identity is protected in NYC and Long Island, but not state-wide. IIRC New York also protected against discrimination for sexual orientation before SONDA (state-wide law) was passed.
jchendy 11y ago
>Interesting here is that it's the new employer firing an employee for non compete She wasn't technically fired for non-compete. From the article: > On the application there was a question asking me to check a box acknowledging I wasn’t subject to any restrictive covenants that would prohibit me from doing my job at Reuters. I checked it. [...] >I was technically fired for “dishonesty,” because of the box I had checked.

mbrundle 11y ago

I've worked for several startups (US and UK) where the contracts contained very broad restrictions like this non-compete. Fortunately my wife is a lawyer and has helped me to read and red-line them, and then push back and get these sections rewritten. This is something I would NEVER have thought to do by myself, and I don't know many other tech people who do this either. I don't know the legality of these clauses, but my impression is that the companies don't really care - it's easy to put overly restrictive language into their contracts because they have little to lose out of it, as an employee is unlikely to undergo expensive future litigation to sue over it. Bottom line - there needs to be (a) some low cost support mechanism for people to be able to check whether their contracts contain anything overly broad that could hurt them later, and (b) some way of educating potential employees that they should read contracts in detail, and that they can challenge contracts and push for changes before signing them, and not to treat them as a binary sign as-is/no-sign decision.

njs12345 11y ago
Luckily, in much of Europe, overly broad non-competes aren't enforceable: https://en.wikipedia.org/wiki/Non-compete_clause#Europe https://en.wikipedia.org/wiki/Non-compete_clause#Europe
- chinathrow 11y ago
  Read the article. It's not about being enforceable. It's about having a liability if someone is under such an non-compete.
  - hodgesrm 11y ago
    I did. :) The liability would not exist if the non-compete were unenforceable as it is in places like California.
    - chinathrow 11y ago
      No, even if it's unenforceable across the globe it would increase the risk of litigation. Hence a liability.

idsout 11y ago

Where I worked years ago, I told my employer flat out that I wouldn't sign the non-compete that he handed me. He asked me again two weeks later to sign it. I refused, explaining how it would essentially give me no bargaining power and could keep me from getting future work. That was the last I heard about it. I continued working with some awesome people (my employer included) for another two years.

golergka 11y ago

> You are never told "Take these home and have your lawyer look them over" (how many of us even have a lawyer?), and are given the impression that everything is boilerplate. I'm sorry, but you have to be told such obvious things, you shouldn't be considered an adult who's able to take care of herself.

mfringel 11y ago
You're not sorry. Just accuse the person. It's more honest.
st3v3r 11y ago
You're quite sorry, but not for the reasons you outlined.
- pc86 11y ago
  Surely you could make the same point without baseless personal attacks.
dang 11y ago
This comment breaks the HN guidelines. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newswelcome.html https://news.ycombinator.com/newswelcome.html Please post civilly and substantively, or not at all. We detached this subthread from https://news.ycombinator.com/item?id=11059109 https://news.ycombinator.com/item?id=11059109 and marked it off-topic.

vonnik 11y ago

Fwiw, non-competes are unenforceable in California.

dragonwriter 11y ago
Non-competes are mostly unenforceable in California. But you definitely shouldn't just sign one and assume it won't be enforceable in your case.
- fryguy 11y ago
  Assuming one did such a thing, would it be possible to take them to court and get a summary judgement that the clause of the contract is unenforceable and to be removed, so they can't use that as pressure against your new company as in the instance in the article?
  - dragonwriter 11y ago
    It might be possible to commence a legal action for a declaratory judgement (a summary judgement is a different thing) on the matter (declaratory judgement rules vary by jurisdiction.)

jimbokun 11y ago

“We are confident that our employment practices comply with all applicable laws, and we remain committed to maintaining the highest standards in our ethical, journalistic and employment practices.” Oh, please. The overly broad non-compete demonstrates a complete lack of ethical standards in your employment process. You're really just trying to say you are just as scummy, but no more scummy, than the prevailing standard for employment practices in the U.S. Which is a standard largely devoid of any ethical considerations whatsoever.

stygiansonic 11y ago
Agreed - these kind of boilerplate statements are so common that they virtually carry no weight anymore. It's almost just a standard "checkbox platitude" that any large size company will be expected to mention as a default response. (These statements are probably just there to provide some level of deniability when an employee does something bad, to say that it's not part of the company culture - which may or may not be true) As an example, Enron: "We are dedicated to conducting business according to all applicable local and international laws and regulations, including, but not limited to, the US Foreign Corrupt Practices Act, and with the highest professional and ethical standards" [0] 0. http://www.agsm.edu.au/bobm/teaching/BE/Cases_pdf/enron-code.pdf http://www.agsm.edu.au/bobm/teaching/BE/Cases_pdf/enron-code...
bigtones 11y ago
"We are dedicated to conducting business according to all applicable local and international laws and regulations, including, but not limited to, the US Foreign Corrupt Practices Act, and with the highest professional and ethical standards." - Enron Code of Ethics http://www.agsm.edu.au/bobm/teaching/BE/Cases_pdf/enron-code.pdf http://www.agsm.edu.au/bobm/teaching/BE/Cases_pdf/enron-code...
- mikeash 11y ago
  When somebody states so strongly that they are following the law, you should be really suspicious that something is up. Like how if a hotel strongly advertises "our rooms are really, really clean," run away.

philjr 11y ago

I am curious, given the length of time she was employed at her new employer and her statement saying her editors were aware of this, whether this was just the HR compliant reason she was let go.

srussellkraft 11y ago
The editors in the legal news department knew; that doesn't mean the corporate side knew or cared until Law360 sent its letter. I was let go because of the non-disclosure of the non-compete - I can assure you there was no other reason. In fact, HR didn't even need a reason to fire me, but they still gave me one.
timv 11y ago
There's some confusing language in the article that might make you think that she worked at Reuters (the new employer) for a long time. In fact she was only there for a few weeks: ... who Thomson Reuters fired within weeks after hiring her in September The bit that confuses it is this: I also later found out that every editor in my section at Reuters had been well aware of the non-compete for years What I think she's saying is that the editors at her new employer were well aware (and had been "for years") that Law360 (her old employer) used these non-competes, and (by implication) that she'd be subject to one. It gives the impression that she worked there for years, but that seems to just be an unintended consequence of the phrasing.

derekp7 11y ago

Something I don't understand -- a non compete is between an individual and their (previous) employer. The new company hiring the employee has NO contractual or legal obligations to the former employer -- so why the tendency towards firing? And if the former employer contacted the new one, making legal threats in order to get a person fired, isn't that itself illegal? (Wrongful interference with Employment Relationship).

bravo22 11y ago
I am not a lawyer but I believe this is because there is a tort for inducing someone to break their contract with a third party. Therefore as the new employer they'd be on the hook.
- stygiansonic 11y ago
  Even when the new employer has not been sued, there are cases where they have paid the previous employer to settle the non-compete, as was the case with a CEO Nortel hired from Motorola: "The two companies were involved in a brief legal dispute last year after Nortel announced it had chosen Motorola's former chief operating officer, Mike Zafirovski, as its next CEO. Citing non-compete agreements, Motorola sued Zafirovski in October. The dispute was settled a few days later when Nortel agreed to pay $11.5 million to end the matter. Under the terms of that October settlement, Zafirovski and Nortel agreed not to recruit Motorola employees." (Not trying to say this case is anything like that of a much lower-level journalist as described in the article. That seems unfair and harsh) http://www.infoworld.com/article/2674269/networking/nortel-appoints-ex-motorola-exec-as-operations-chief.html http://www.infoworld.com/article/2674269/networking/nortel-a...
dragonwriter 11y ago
> Something I don't understand -- a non compete is between an individual and their (previous) employer. The new company hiring the employee has NO contractual or legal obligations to the former employer Well, this part is wrong. Once they become aware of the contract, they risk the potential of liability for tortious interference. [0] > And if the former employer contacted the new one, making legal threats in order to get a person fired, isn't that itself illegal? So long as there was no misrepresentation involved, I don't see how it would be illegal. What law do you think would be broken? [0] https://www.law.cornell.edu/wex/intentional_interference_with_contractual_relations https://www.law.cornell.edu/wex/intentional_interference_wit...

leroy_masochist 11y ago

One important thing to note is that often, when you leave a company, they will offer you a severance package in return for signing an agreement. This may happen if you are fired, or also if you leave on your own accord. IANAL, but I've dealt with this situation and my key takeaways are as follows: 1. Pay a lawyer to read the document for you and provide advice. 2. There are major differences in state law, and jurisdiction is important. For example, if you worked for Google in NY[0], and your contract was a NY-based contract, and there was a harsh noncompete in it[1], and you subsequently took a job in California that violated the terms of the non-compete, it doesn't matter that your new job is in California and Google's HQ is in California and Alphabet is domiciled in Delaware. You signed, and are potentially in violation of, a contract whose potential violation would be adjudicated in New York. 3. Upon receiving advice from your lawyer, and bearing in mind the importance of state jurisdiction, ask your former employer to make changes to the agreement as you see fit, especially if there is an aggressively worded non-compete. 4. Don't believe them when they say "this is just a formality". Read the fine print and understand what it means. [0]: Has already been mentioned a couple times in this thread, but California is a much more employee-friendly state than NY. Non-competes are essentially unenforceable, as are non-poach agreements. It's my understanding that disparagement clauses are also a lot harder to enforce in CA, but IANAL. [1]: To be clear, I am not sure whether this would be the case at Google specifically, just using a well-known California-based company as an example.

arethuza 11y ago
Worth noting that in the UK it is pretty standard for your employer to pay for your lawyer (not their lawyer) to review your "compromise agreement" - there is a standard fee of £500 or so for this which a decent employment lawyer will be able to get a decent amount of work done even if their hourly rate is much higher. I left my previous employer a couple of years ago and it ended up with a fair bit of negotiation and it was all covered under the standard fee. The particularly nice thing is that they bill your employer, not you!
- arrosenberg 11y ago
  Interesting. In the US, I would almost never use a lawyer paid for by someone else. I'd always assume the lawyer's client is whoever is paying them.

exelius 11y ago

This is the general problem when you have two parties with an asymmetry of power enter into an agreement with each other. The more powerful entity will spend time iterating over the process and identify every possible way they can be threatened. They will write contractual language that errs on the side of protecting the company. The less powerful entity will not argue any of this language for fear of no longer being allowed to engage the more powerful one. They don't know what to look out for anyway because they are inexperienced at entering in to these kinds of contracts. This is a problem for more than just employment contracts. We expect individuals to have to negotiate against highly-paid professional negotiators for even the most essential activities in our lives.

crispyambulance 11y ago
The good news is that most employers don't actually try to enforce non-competes unless the violation is egregious (like poaching clients). This particular case might be a cynical and calculated action to, as the article says, "send a message" to other young employees looking to move on. It could be the aggressor here has been suffering from a brain drain and this is how they've decided to deal with it.
- mikeash 11y ago
  I don't know that this is good news. Limited enforcement is why they can get away with such clauses in the first place. A remarkable number of people will be placated by this when they really shouldn't.
- exelius 11y ago
  Yeah, I realize that many non-competes don't get enforced, but the fact is that those companies will continue to demand them because the non-compete protects them in a small percentage of cases (regardless of its impact on their employees). The companies have zero downside from the NC but it can significantly affect workers who may feel they have no choice but to sign it if they want a job. Hell, many of the non-competes are likely unenforceable, but so few people ever push back on them their legality is never tested.

cdnsteve 11y ago

Never ever sign a non-compete, ever.

billmalarky 11y ago
From a position of power, of course. But the article is about jr employees who don't have much of a negotiating position.
jchendy 11y ago
For certain industries, that statement is equivalent to "never get a job."
- st3v3r 11y ago
  Which is why the law needs to change to ban them completely. This isn't something the free market is going to fix.
  - gozur88 11y ago
    Sure it is. If the employer wants you, and you refuse to sign, they'll still hire you. If you can't find an employer who wants you badly enough, then work in another industry. You don't have to read very far on this page to find an example of someone who refused to sign an NC and was still hired.
    - st3v3r 11y ago
      No it won't. And there are anecdotes, that's it. There are just as many of people who felt they would be fired if they refused to sign. The free market will not fix this problem while the majority of employers hold the majority of the power in this situation.

hodgesrm 11y ago

Blanket non-competes undermine the creative destruction process in modern economies. They will end up hurting the companies using them by making it harder for successful firms to expand quickly and keeping less successful firms afloat longer. The problem is individual companies lose little in the short run by putting them on their own employees. The answer is to make non-competes unenforceable across the US in the way they are in California, which makes them generally unforceable but adds reasonable exceptions for situations like selling a company to an acquirer.

LordKano 11y ago
I have been asked to sign non-compete agreements by a couple of employers. One of them was just a legally worded agreement to not poach customers or go to work for a customer within 18 months of ending employment. That made sense to me and I agreed to it. I wouldn't sign a non-compete that forbade me from going to work for a competitor.
- hodgesrm 11y ago
  Same here. Unfortunately most people either don't take the time to think through the consequences or do not have a choice about work that allows them to push back. I have similar feelings about binding arbitration, another area where corporate lawyers have gone crazy in recent years.
  - LordKano 11y ago
    In one case, I needed the job and a non compete was a condition of employment. Instead of signing, I wrote in cursive "Won't Agree" on the signature line. It may not hold up in court but it was enough to satisfy my personal ethics. If I decided to do something that was contrary to the agreement, I wouldn't be violating my own code of honor.
    - dalke 11y ago
      http://www.rudyrucker.com/blog/2010/09/10/what-was-alan-turing-like/ http://www.rudyrucker.com/blog/2010/09/10/what-was-alan-turi... > 1942, age 30. [Alan] Turing joined the Home Guard so he could learn to shoot. “[Turing] had to complete a form, and one of the questions on this form was: ‘Do you understand that by enrolling in the Home Guard you place yourself liable to military law?’ Well, Turing, absolutely characteristically, said: There can be no conceivable advantage in answering this question ‘Yes’ and therefore he answered it ‘No.’ … And … he was duly enrolled, because people only look to see that these things are signed at the bottom.” He learned to shoot, but he refused to attend parades, and the apoplectic chief officer confronted him, and Turing said, “You know, I rather thought this sort of situation could arise…If you look at my form you will see that I protected myself against this situation.” He’d decided on the “optimal strategy if you had to complete a form of this kind. So much like the man all the way through.”

st3v3r 11y ago

Non-competes are immoral, and anyone who uses them deserves to be ruined so bad they have to live under a bridge. I hope her employer gets sued into oblivion.

at-fates-hands 11y ago

As someone who worked at West Publishing and then Thompson West and its current iteration Thompson Reuters, I have some insight into why this happened. Many of Reuters businesses are starting to face more serious competition. There was a time when Reuters owned the media business. Now smaller, more nimble companies are coming in and giving them a LOT of competition. Legal reporting is one of these areas, and Law360 has been eating into their market share in several regions. As such, Thompson goes out of its way to try and hire their help. It gives them more of an insight into what the company is doing. For years, Thompson West used to hire Lexis sales people just to find out what they were doing. Reuters still does the same thing. None of the information is confidential, but it gives Reuters a lot of information into how they train their people, the areas of law they focus on, how many reporters are on a certain beat, etc. Any kind of information they can get, they do. Of course this isn't done in a formal way, it's more off the cuff stuff you hear around the lunch table, or during an training session. Law360 probably realized this and called in their ace card - the NDA. Tie it up in court, or just hamper the reporter in trying to get a new gig and their problem is solved. This is why Law360 sent out the letter about having "critical and sensitive confidential and proprietary information". Simply out, this is a resource war, Reuters is getting beat and uses employees from other companies to gain a competitive advantage. She just got caught in the middle is all.

NotHereNotThere 11y ago

Anybody find it weird that Law360 had the journalist sign the Non-Compete on her first day along with other HR forms? Every time I've had job offers that included a Non-Compete, the contract was always to be signed at the same time as the offer.

brightball 11y ago

Perks of a right-to-work state: broad non-competes are unenforceable for exactly this reason. You have to have specific and reasonably defined scope in order for it to be viable.

zekevermillion 11y ago

I find that even corporate lawyers are frequently ignorant of the laws applicable to post-employment restrictions. In NY these covenants are enforceable only to the extent that they protect the "legitimate business interests" of the employer, under BDO Seidman v Hirshberg. Those interests do not include preventing employees from practicing their trade, though some sleazier employers seem to think that is part of the game. In this case, it sounds like the employer is threatening some sort of trade secrets misappropriation claim, which would not be surprising as this usually accompanies any noncompete claim. However, it's hard to imagine what protectable trade secrets a "content" author would learn. I mean, how to write content is not a trade secret, it's a skill of the trade.

phonon 11y ago
You can read about that here...at Law360! http://www.law360.com/articles/558083/bdo-seidman-continues-to-rule-ny-restrictive-covenants http://www.law360.com/articles/558083/bdo-seidman-continues-...
- zekevermillion 11y ago
  Typical of products and services marketed toward lawyers, law360 requires a silly subscription to read content that is largely already public info. Maybe the trade secrets that the Reuters journalist stole have something to do with the secret of convincing people to cross the paywall of this obnoxious publication! Anyway, here's a Google Scholar link to the opinion, which is self-explanatory: https://goo.gl/Vzq0XG https://goo.gl/Vzq0XG
  - phonon 11y ago
    You can read the article in full if you google the title and click the result link.

djrogers 11y ago

I see a lot of advice here to never sign a non-compete form. Sounds reasonable, but I have another possibly simpler suggestion. I've been asked to sign 3 non-compete agreements in the course of my career, in spite of working the entirety of it in California, where they're useless. When I got the first one, I consulted a lawyer who told me as much and suggested I sign it with all of the non-compete language redlined out. I've done that with all 3 of them, and have never once gotten so much as a comment about it from my employers. The hiring manager is happy to get al his paperwork, HR is apparently happy to have a bunch of stuff to file away, and I'm pretty sure legal either knew I was in the right or they never even looked at it.

ryandrake 11y ago
You got lucky. Lots of places will insist that you either sign their documents unmodified or GTFO.

coldcode 11y ago

I worked at a place once that had a not only non-compete, but barred me from buying anything from a supplier the company used (including Walmart). I objected and crossed it out before signing. Never came up again. A lot of these agreements are legally useless but often put in just in case it might be useful later.

chrisbennet 11y ago

Very sad. I recently gave my 3 page (really 2.5 pages) client services contract to a client and they came back with their own 9 page "standard contract" for contractors. (I'm a developer.) I couldn't believe how overreaching their contract was. The most egregious paragraph stated that if I introduced a bug I would be liable for not just what they paid me - I would be liable for their estimated loss of profits !!! I quoted that part of the contract and wrote back: "Nice try but yeah, no." I had my lawyer go over it and take out all the stupid stuff and we came to an agreement. Lesson: Read the contract. If you find that the contract is unduly unfair, ask if you can cross out the parts you don't like. If they say yes, turn it over to your lawyer. Lesson: There is no "standard contract". Lesson: If they say "It's a formality that we'll never enforce." Cross it out. ("Then you won't mind if I cross it out.") Lesson for contracts [my lawyer taught me this]: If you put something egregiously one sided in your contracts you will break trust with the other party. In my case it triggered a "Whoa, where else are they trying to screw me?" response which triggers the "this is job for my lawyer" response. If the contract is for your enemies, do whatever you want. If it is designed for parties that you want to work with, it's sending the message that you can't be trusted is not a good way to start the relationship.

mcv 11y ago
I have renegotiated terms of almost all my freelance contracts. Usually, a non-compete was the main culprit. Generally, the non-competes don't come from the client, but from a mediator that wants to prevent me from bypassing them and working directly for the client, which is fair. But sometimes they're still ridiculously broad. For example: I'd already worked for a major bank, quit that project because of a new baby, and when I looked for a new project, found one at the same bank through a different recruitment agency. They wanted a non-compete on all my work for that bank. That was obviously not fair, so I got it reduced to only the department where I would be working. I'd be free to work for any other department.
kyrra 11y ago
Similar story: My dad was part owner of the business which he got out of 10 years ago. The company went bust a couple years ago and the debt collectors started trying to get what they could. One of those was a laundry service that would wash uniforms of the employees. My dad had signed the contract for it 25+ years ago to start the account going. On the contract it stated my dad was personally liable for owed fees. But when he originally signed it, he crossed out those 2 words (personally liable) and turned it over signed. He pointed this out to the debt collectors when they came knocking and they stopped bothering him.

kafkaesq 11y ago

Meanwhile, the HR flackey at Law360 who incompetent advise her still has their job: When I signed the agreement, the HR representative who conducted my orientation called it a formality and told me it just meant I couldn’t freelance for a competing site while still working there.

csense 11y ago
> who incompetent advise her That was very competent advice from the point of the company -- the HR person convinced her to sign the provision the company wanted her to sign, the company didn't have to face a choice between agreeing to strike the non-compete or letting her walk, and there was no record of the misleading "sales pitch" the HR representative used (which might have served as evidence of conflicting intentions, allowing a court to strike the non-compete provision on the grounds that the parties didn't intend it to be binding, or even caused future liability for the company if the HR rep's description of the non-compete crossed the line between legal sales techniques "oh that's not important, you don't want to think too hard about this part of the thing, everybody signs it" and illegal fraudulent misrepresentation "it says X" when it clearly it actually says Y which is totally different). It sounds like the HR person did their job competently.

sparky_z 11y ago

"I also later found out that every editor in my section at Reuters had been well aware of the non-compete for years." I thought she'd only been there for a month. What am I missing here?

srussellkraft 11y ago
I later found out that other reporters had run into trouble when moving from Law360 to Reuters, but those were before my time. Law360 has had a non-compete since around 2011.
paulclinger 11y ago
I read it as they knew the situation with Law360 non-competes in general, which would apply to her as well.

chippy 11y ago

When I was a freelancer working on my own, a few companies would include a non compete clause. I challenged them on this always and they were all very happy to alter the wording. It's about the wording mostly, and about definition of competition. For example if I am working for a web agency shop that does e-commerce websites for sports and I am just working on a site for a surf shop, I would alter the clause to read "in the realm of surf shops" rather than competition in general. They were happy to change it because it kept the spirit of the agreement, what they actually meant there. Yeah, I was fine not making directly competing in a specific domain, but I wasn't going to be limited by contract in competing in a general sense. It was also clear that reducing from 12 months to 6 months is usually acceptable also. Now. The worst clause in a permanent contract is the other works / open source projects etc. They sometimes want to own all your code even the things you do in your spare time. They will ask for a list of all projects you contribute to before working, and if you want to contribute to something new in your spare time you will need approval from management. Now, I think this is very unreasonable, and I've pushed back on this so much that I've rejected job offers because of it. What I do in my own time is my business.

CyberDildonics 11y ago

I was faced with a non compete clause that would have barred me from working in the same industry for 2 years. I said I wasn't ok with. They said 'it isn't usually enforced'. I said 'then it shouldn't be in there'. I was told 'they don't usually allow any changes' (and this was a big company). The result was that they did change it and send me a new contract. Companies make a huge play for legal rights with contracts. Usually you have wasted a lot of time to get to that point since they haven't sent you a template in the first place. Suddenly there is an unreasonable amount that you are giving up for the privilege of working for someone. Selective enforcement is bullshit. Anything in the contract can be used as leverage against you if the company doesn't like the position they are in at any particular moment.

gizi 11y ago

The internet has completely changed contracting for me. The contract is the email thread up to the point at which we have an agreement. If the counter-party suggests that we sign another document than that, he is a liar and a cheater, and I will not do business with him. In those circumstances, non-compete clauses will have been discussed during the mail thread. If we discussed and we agreed to them, they are valid. Otherwise, they are not. I do not understand that anybody would still agree to sign a contract document drafted solely by someone else. If it was not drafted together, it is bound to be abusive, and it is always the party who did not participate in its drafting who will be abused. I have always imposed my will or else walked out of bad deals, regardless of whether the counter-party is an individual or a large company. What difference does it make?

chrismcb 11y ago

Outside of selling your company why do we have these and why are they enforceable? Well I know why we have them, but why are they allowed to exist? What is even worse are companies forcing noon compete on essentially unskilled workers