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Worth remembering, especially for those just entering the software field: by the time a potential employer gives you an employment agreement to sign, they've al
by etjossem 9y ago
Worth remembering, especially for those just entering the software field: by the time a potential employer gives you an employment agreement to sign, they've already decided they want you. At that point, it's on them to give you a palatable offer. They may include a noncompete clause for one of two reasons: 1) to prevent you from working somewhere else at the same time, which can create all sorts of conflicts of interest, or 2) because it'll keep you from looking for a new job, and they think you're too naive to argue.
Here's my suggestion. When you receive the document, read it and see if there's a noncompete clause. If so, you're going to want to send a redlined version back to them, changing the noncompete duration from "during and for 2 years following employment at the company" (or whatever they gave you) to "for the duration of employment at the company." By doing so, you show your willingness not to do any kind of work for a competitor while employed, while very clearly pointing out that you do have the right to get a new job. It may be important not to offend the person who wrote up the agreement and included something so ridiculous, so the minor nature of your modification will allow them to save face.
In the end, most employers won't bother to argue the second point, and the ones that do are probably shadily taking advantage of you in other ways.
Additional note: in California and several other states, these clauses are not legally enforceable anyway, and you should mention that when you give them the "fixed" agreement.
- mikeash 9y agoI've never been presented with one (and hope I never will) so this is hypothetical, but I have a hard time imagining even doing that. A company is paying me to work for them, they're not paying to own me. When I'm off the clock, my time is my own, up to and including doing paid work for anyone else I want. I'd make an exception if they increased my pay accordingly. But considering that they're asking for 4.2x more of my time than usual, they'd better be paying me at least 4.2x a normal full-time salary. I do have a little experience with making changes to contracts that the other party doesn't want to change, and to that end I'd like to add two more things. First, it's likely they'll use the phrase "standard contract" and say that it just can't be changed. Second, if you've gotten that far, it's quite likely they'll change your minds if you stick to your guns. It's tempting to cave in when they say "sorry, we can't accept changes," but don't.
- etjossem 9y agoThis suggestion is mainly directed at newcomers to the industry, who may not have the reputation or experience to be able to credibly push back on many points of their employment agreement. Once you're in a seller's market for your level of skill (as I'm sure you are), you don't need this advice anymore and I'd encourage you not to let your employer restrict your moonlight projects. But particularly if it's your first job, you may have to make concessions - for some folks, "if you want a paycheck, sign here" is a reality. If nothing else, it is very important that you keep the right to move up and out to a new job. That's the point you should focus on. In a realistic full-time first job, you're not going to work for a competitor at the same time, so it is fine to tell them you won't if that helps the two sides reach agreement. Good point about not taking "this is the standard agreement" for an answer. That's not good enough. Say you understand that it's a boilerplate legal document, and you'd be more than happy to give them a couple days to double-check your proposed change with their boss, counsel, or whoever they need to. Again, be firm while giving them an avenue to save face, and wait for them to call back with a sudden change of heart.
- stale2002 9y agoIt depends on the state. In California, for example, Non-completes are notoriously unenforceable. I'll sign whatever illegal documents you want me to sign, knowning that they don't matter. You might respond by saying something like "what if they go after you anyway, even though it is unenforceable.". But the problem is that they could just do that anyway, illegal contract or not.
- juiyout 9y agoSame here in Taiwan. Court has ruled more than once that non-complete cannot be applied to any employee who is not top-level executive.
- etjossem 9y ago> But the problem is that they could just do that anyway, illegal contract or not. The difference is that with an illegal contract, your future employer might actually believe it's more headache than it's worth to fight. I would err on the side of casually striking it out of the employment contract, simply saying "this part of the standard document doesn't apply in our state" etc.
- dsacco 9y ago> In the end, most employers won't bother to argue the second point, and the ones that do are probably shadily taking advantage of you in other ways. I can't say if you're right or wrong about this, but personally I'm pessimistic about the claim.
- vladimirralev 9y agoAnecdotally, I had a case where I managed to strike out the whole noncompete from the contract. And the management still came after me, because they "didn't read it" or "thought it's something else". They knew they had no standing but still went ahead to claim an implicit noncompete. So yes, in the end you are legally covered, but once someone demands a noncompete out of the blue after the compensation is negotiated, that's not an honest party and will probably get pissed off if you dispute it. Noncompetes cost money, they should be disclosed at appropriate time and people should be compensated for it.
- logicallee 9y agoWhy do you have to fix an unenforceable clause at all? On moral principle? Are they gonna tell you over some barbeque, "Hey by the way Bill you know and I know that we can't TECHNICALLY enforce the clause preventing you from working in this industry for two years after leaving your position with us but we both know that it was very shitty of you to take a job in this same sector." Who's going to say that with a straight face? Is there a moral aspect? If there's no moral aspect, why do you have to revise unenforceable clauses? ("let sleeping dogs lie.") I wanted to make sure the proverb I said was what I meant, this is the dictionary definition that came up: "avoid interfering in a situation that is currently causing no problems but may well do so as a result of such interference." Doesn't that describe redlining unenforceable clauses you don't like? ----- EDIT: Thanks for the replies guys. I was specifically asking about California. I think the replies give good reasons why you should redline unenforceable clauses (and this comment has been downvoted, but I'm keeping it for context for others reading the thread.)
- etjossem 9y agoI had to do this in a place that wasn't California. Also, they generally don't track you down at a barbecue. They'll try to tell the company you are jumping ship to that your employment there would be illegal, as TSG Finishing did. The future employer will then have to send back strongly worded letters clarifying California employment law. Frankly, you want to avoid that whole mess in advance.
- dsacco 9y agoI think the comment might be inclusive of noncompetes in territories other than California, which are more often than not encorceable.
- joeblow9999 9y agoThere is the small issue of whether or not your personal integrity allows you to sign an agreement you do not intend to abide, regardless of the legality.
- marcosdumay 9y ago
- ransom1538 9y agoLaughable unenforceable in CA. Basically equivalent to toilet paper for the employer in CA.
- icelancer 9y agoYou still don't want to deal with even a nonsensical court date if you can avoid it with 5 minutes of redlining.
- lmm 9y agoIs an extra round of back and forth to strike a legally meaningless provision worth it though? Another reply in this thread claims their former employee sued even with the redline.
- djsumdog 9y agoWell not just unenforceable, but they are specifically prohibited by law there.
- esoterica 9y agoRedlining the non-compete section is not a minor modification. Some companies are very serious about their non-competes. They will pay you millions of dollars to respect them (and sue you for millions of dollars if you don't). If you try and cross out your non compete agreement they will just withdraw your job offer. Non competes aren't intrinsically shady or evil. Some companies have business models that depend very heavily on secret IP. It's just another adverse factor you have to add into the mix when evaluating a job, along with compensation, work-life balance, advancement opportunities, etc. Many non-competes are very well compensated, and limited in scope to a particular niche industry, so you could still go off and work anywhere else in tech industry where your IP cannot be used against your old employer. Signing one isn't the worst thing in the world.
- etjossem 9y agoThis advice is not meant for people who are being paid millions of dollars to respect a non-compete they fully understand and consent to.
- esoterica 9y agoChange the numbers by a factor of 10 and the point still applies.
- etjossem 9y agoI agree. This is aimed at people who: - Are fairly new to the industry or are otherwise trying to act in a buyer's market for labor, - Are being offered market-rate or lower with no extra incentives, and - Have a potential employer trying to foist a noncompete on them for no particular business reason. Understand the employer's business model and whether noncompete will be a sticking point for them. If it is, then the situation is very different, and you should be asking for lots of money rather than the clause's removal.
- anarazel 9y ago> Non competes aren't intrinsically shady or evil. If they're not paying you while you're not allowed to work in your field, yes, they are. And unfortunately that's a lot of them. If you're being paid to sit in your backyard or do something in a another field, that's a different story.
- linkregister 9y agoI hear this advice about contracts of adhesion all the time, "just red line out the parts you don't like, just like in that scene in 50 Shades of Gray." Who in the software industry still gets offers like that? Everyone I know gets a DocuSign PDF they sign digitally. There's no opportunity to alter the document. There is basically no non-confrontational way to do this. If a software developer has a competing offer, sure, leverage it. Otherwise, I think the only realistic remedy is a state-wide or nation-wide legal protection.
- icedchai 9y agoI've had multiple employers "alter the document." I send an email, saying I have reviewed, saying I can't sign unless A, B, and C are done. Usually, this involves removing clauses about not having other employment or side work, which are a non-starter for me. One employer added an appendix full of "exceptions", saying "all side work is allowed, not further authorization required."
- etjossem 9y agoSure, they can turn off editing in DocuSign, but that doesn't change what this is: a negotiation. Download it as a PDF and then copy/paste it into a Google Doc. Edit the document as you feel is necessary, print both the redlined copy (so you can explain your proposed changes) and the clean one. If they're cool with it, sign the clean employment agreement together on the spot. Make copies and you're done.
- 3pt14159 9y agoWhat? Only if you're very inexperienced will this be tricky, once you're senior nobody bats an eye when I ask for things to be changed in the contract. A contract is part of communicating how we will work together. Demonstrate that you're competent by clearly communicating the changes you want and why you want them and if they react back poorly then you dodged a major bullet, since they'll also communicate poorly in day to day functions. I'm not saying you'll always get what you want, but there should never be anger, and just because you're sent a signable document via DocuSign doesn't mean you have to sign that version of it.
- trustfundbaby 9y agoJust be ready for the company to pull the offer. Lots of times it's not even on the principle (we don't actually agree to the changes) but ego ... as in "who does this guy think he is pushing back on this contract that 100s of our employees have signed" If you're not ready for the company to walk away, be careful with this approach.
- koolba 9y agoIf you're not ready to walk away then you're not ready period.
- etjossem 9y agoAgreed. Be aware of your BATNA (that's your "best alternative to negotiated agreement") as well as the potential employer's. As in any negotiation, you should stack the deck in your favor beforehand - be late-stage in the interview process elsewhere, ideally have other offers, truthfully signal that you do, and try to move at a time when the employer badly needs to make a hire.
- ChuckMcM 9y agoExactly right. Large companies are especially prone to this behavior. If you're coming in as a VP or Director its one thing, if you're coming in as a non-executive it is entirely something else.
- crdoconnor 9y agoIf it's an unreasonable contract and they refuse to make the contract reasonable upon request then having the company walk away probably means you dodged a bullet.
- umanwizard 9y agoIs starving to death really better than signing a shitty contract? It's not very easy for most people to find a new job.
- crdoconnor 9y ago
- djsumdog 9y agoI have always refused to sign these. I've been presented with five in my life and in every case they either remove them, or in one case they added an addendum to nullify it. In most contracts that are for companies that are across states, you'll see this clause marked with a "Not applicable in California."
- dror 9y agoTrying to get an employee to sign a non-compete in CA is not just a bad idea, it can cause problems for the employer. http://www.socalinternetlawyer.com/non-compete-agreements-california/ http://www.socalinternetlawyer.com/non-compete-agreements-ca...
- easilyBored 9y agoNon competes should be: Upon leaving you cannot work for a competitor BUT, only if we offer to pay you the salary you had when you left. And only for a max of 1-3 years. Otherwise they should be illegal.
- ccozan 9y agoIn german civil and commercial right, that is exacly the case. One can indeed enforce the non compete in which he has to stipulate in the contract the amount it is going to pay you if you are not allowed to work for someone else. If this is not stipulated, the clause cannot be enforced.
- simonebrunozzi 9y agoYou are correct. And naive. Most people (and also myself, for most of my career) are very weak when confronted with these things. The world doesn't work the way you describe it. Imagine you are getting your dream job at Amazon.com and someone is telling you to negotiate or discuss this part. Large companies are much less willing to accept anything like this. However, in your defense, I am pretty sure that negotiating in itself doesn't cause any harm to your opportunity to be hired.
- emodendroket 9y agoAlso, as the article describes, it is common to be presented with such agreements when you have little leverage.
- ryandrake 9y agoMost companies are indeed not willing to discuss these things. If your stance is "be able to negotiate these standard contracts or walk away" you will be doing a lot of walking away. In a world where employees have even an ounce of power, this might change, but we don't live in that world. Even in the software world, what new hire has any power whatsoever to negotiate their employment agreement? You're at your weakest: You have no track record yet at the company, few to no allies, and there is a line of other applicants out the door who would be thrilled to have your job offer. From the company's point of view, why should they bother with you if you're already being difficult?
- steelframe 9y agoThis is a good reason to start your career in California, where the government protects you until you get enough professional experience to negotiate.
- AndrewKemendo 9y ago1) to prevent you from working somewhere else at the same time, which can create all sorts of conflicts of interest, or 2) because it'll keep you from looking for a new job, and they think you're too naive to argue. Actually there is a third reason: An employee leaves and takes proprietary tech to a competitor. The standard answer is: Well that's what an NDA/Confidentiality clause is for so you don't need to worry about that. Unfortunately it doesn't really work like that. You can't just purge your brain of something you've been working on for months or years. On top of that it's nearly impossible to prove that a confidentiality infringement was made unless code or hardware was straight up exported/copied and implemented. Especially in the case where a megacorp hires away someone from a startup, the startup can't reasonably sue megacorp for this type of thing because it would cost too much and be basically a total loss. Effectively it happens like this: Employee 1 was implementing a novel computer vision algo for Startup X. Megacorp approaches Employee 1 with 3x salary offer and stock. Employee 1 leaves startup to work on a similar project for megacorp. Startup can't ask what Employee 1 is working on because Employee 1 and Megacorp have an NDA. Megacorp comes out with a new product that implements the algo, except it was implemented by the team Employee 1 was on which had been working on the same problem for a while and not just Employee 1 themselves. I've seen this happen first hand, so it's not like it doesn't go on. There are a million "reasons" why people are ok with this situation and just blame it on the startup not being competitive with salary, but increasingly that's basically impossible.
- siegel 9y agoI sympathize with what you're saying. But if this were truly such a problem, wouldn't you expect jurisdictions that enforce non-competes to have a more robust startup ecosystem than jurisdictions that don't?
- AndrewKemendo 9y agoThe point I am trying to make is that there are valid reasons to have non-competes that aren't just trying to handcuff employees as that is the standard way of thinking in this thread. Whether or not they could practically be used for them is a different question.
- timvp 9y agoIn the Netherlands is not legally enforceable either. You can only enforce not be able to take clients with you to your new employer for a fixed amount of time (e.g. 6 months).
- eggie5 9y agoCan you elaborate more on how it's not enforceable in NL or provide some reference? Here is an example of a contract from a tech company in NL w/ a noncompete: The Employee shall throughout the duration of this employment contract and for a period of one year after termination thereof, not be engaged or involved in any manner, directly or indirectly, whether on the account of the Employee or on the account of third parties, in any enterprise which conducts activities in a field similar to or otherwise competing with that of [COMPANY NAME] and/or its affiliates, nor act, in any manner whatsoever, directly or indirectly, whether on his own behalf or for third parties, as an intermediary in relation to such activities. This obligation applies solely to any work activities or involvement of you within the territory of Europe.
- mpfundstein 9y agoin my personal experience: no lawyer in NL will accept this. At least not for SE jobs where in doubt every other company could be in a similiar field. so don't worry. nevertheless, i wont ever accept such a clause again in any of my contracts
- timvp 9y agoOf course it is legally correct but there are dozens of ways to get out of it. Some examples: - If you can show that you are making a significant step career-wise (easy) - If your function is different than when you started and didn't sign a new non-compete (from backend to full-stack) - If the contract is temporary 6 months or 1 year its not valid - If you didn't specify a fine, you need to show evidence of damage/loss of that employee leaving to a competitor (impossible?) So just a few ways to get rid of it. Almost every (employment) attorney in NL will get this non-compete blown away. My 2 cents: It costs a lot of (negative) time and if someone wants to leave just let them go. If you respect them, they will respect you. If you screwed them over and over they already copied the data the want and will still leave. Turn the non-compete to a non-client clause (relatiebeding), way softer but ensures that they can't "steal" your clients. Because you are being generous not limiting the person to move to a better position this clause will be way harder to get rid off. Still be reasonable though :)
- 0898 9y agoWhen my previous employer sent me my offer letter and contract, they'd already signed it on their side. I simply crossed out the non compete clause, signed it and returned it. I don't think they even noticed.
- ryandrake 9y agoNeat, but in practice it doesn't work. In my ~20 years experience, I've found that while things like salary and vacation are negotiable, the terms in tech employment contracts are not negotiable. I've tried that cute "strike out the stuff in your employment agreement that you don't agree to" move, and in ALL cases, received a stern note from the corporate legal department a few days later basically saying "Sign it unmodified or GTFO." I don't know who all you Captains Of Industry are who have the power to negotiate these things, but I've found employees basically have no ability to change them.
- paulddraper 9y agoYes. While the engineering manager might desperately want you, legal/HR couldn't care less. You can negotiate successfully with the former, but not the latter.
- ethbro 9y agoI think the parent point is that if even your hiring manager / new boss can't negotiate with legal / HR... then the company is probably dysfunctional and you wouldn't want to be working there anyway.
- Confusion 9y agoCorporate legal departements try to pull the same thing with B2B contracts, but in our experience almost anything can be changed if you stand your ground.
- NoGravitas 9y agoB2B contracts are different, though, because they are effectively between equals, in a way employment contracts are not.
- Confusion 9y agoThe legal department usually tries to tell us differently and gives the same kinds of arguments as they would give for the 'non-standard' employment contract. "You are only a small company and every other company accepts these conditions". "Only manager X of small department Y wants to do business with you: we won't change our conditions just for them". "The contract is only for few$, we can't do specials for that". But in the end the wishes of someone in the business are more important and conditions can be changed to satisfy both parties.
- vivekd 9y agoYou are right they are not enforceable in California but they are enforceable in most jurisdictions. California is in the minority. The issue with requiring your employer to make it only be for the duration of the employment is many companies don't want you to learn about their customers, and methods and trade secrets and then quit to set up a business in the same area . . . which is reasonable. Non compete clauses are allowed in most jurisdiction so long as they are reasonable as to duration (don't last too long after employment) and reasonable as to distance (only cover a limited geographical area)