32 ms·

Why I Don't Sign Non-Competes

• tomohawk 9y ago
  I've had non-compete agreements provided to me to sign in the past, usually as part of a packet of things to sign. In each case I just pocketed them without signing them. I've never had a company come back later and demand that I sign the thing. If they don't do their diligence, I don't see why I should do it for them. In other words, just because someone puts something in front of you to sign doesn't mean you have to sign it, or even comment or push back on it. You can just ignore it.
  • chrisabrams 9y ago
    In a similar light, there are many places that ask you fill out your social security number among other items on paperwork. 9/10 times they will never ask you to fill in the blanks you left out...
    • ethbro 9y ago
      If you leave off your social security number, your employer is presumably going to have difficulty paying taxes / social security / etc to you. Depending on work relationship (e.g. contract), they may not be doing this anyway. But there are some things they need it for.
      • Bartweiss 9y ago
        With all the stupid and unjustified uses of SSN, it's sort of funny to see this as the one people are objecting to. Working out Social Security contributions for your paycheck is pretty much the most reasonable use for that number I can think of.
      • s73v3r_ 9y ago
        That's bullshit. There are appropriate tax forms for that information.
      • chrisabrams 9y ago
        I was speaking generally, not specifically employers. I was asked for my SSN to get a mailbox once...
  • sillyquiet 9y ago
    I mean, I get that approach, but tbh I would rather hash that out with a company before I get hired rather than 4 months down the road when some HR person notices the paperwork is incomplete.
    • tomohawk 9y ago
      By that point, the paperwork is complete. The hiring completes the transaction as being satisfactory to both sides.
      • mseebach 9y ago
        Depends. There could be a reference in the main contract listing execution of the non-compete as a condition of the validity of the contract.
      • Vinnl 9y ago
        I'd still prefer to have issues resolved before I start employment somewhere, rather than having to deal with it when you're already at work and walking away is a bigger step.
      • treis 9y ago
        That's not generally how it works. Modifying a contract without being clear that you are making a counter offer isn't going to hold up in court. They are going to see the company's offer, your acceptance, and then hold you to the original company offer.
        • ethbro 9y ago
          Fwiw, I'd say at least half of the clauses I've been asked to sign were not included at contract time, but rather at post-contract "do HR paperwork" time. So I don't see how that could be construed to be 'part of the original offer'. Especially if you asked (in writing) if such a clause existed and received a negative / no response before signing the contract.
      • emodendroket 9y ago
  • inetknght 9y ago
    Now if only I could do that with software-enforced EULAs. You know, the things that nobody reads but generally sign away all your rights.
    • jonathanstrange 9y ago
      In theory you can (but unfortunately nobody does). Send a letter via snail mail that clearly states that you disagree with their EULA but were unfortunately only made aware of the EULA after your purchase. Include a printed, revised EULA with your proposals for changes. Be reasonable in the changes you propose. If they reply to you that they disagree with the changes, they can prohibit you from using the software or service, but then you're also entitled to a full refund, of course. If they forget to reply, their EULA will not be enforceable.
      • inetknght 9y ago
        gasp Are... are you... this is the internet and are you... you are serious? Can I believe this? I want to believe this.
      • Terr_ 9y ago
        I don't know, this sounds a little bit like that sovereign citizen "wrong flag in the courtroom" stuff. Even if they haven't replied, the original contract is still sitting there clearly stating that a certain set of assumptions are in place if you use the software. I don't see any way to argue that a non-reply implies consent to new terms or abandonment of any terms.
        • jonathanstrange 9y ago
          A contract is only valid if both parties agree. If one of them explicitly disagrees, the contract is definitely not valid.
          • deleted 9y ago
            [deleted]
  • taneq 9y ago
    I've done this with a client in the past. They badly needed my help but tried to get me to sign some ridiculous paperwork (basically a noncompete / NDA plus more simply for being on the premises). They handed me the paperwork to fill out, I smiled and nodded, end of story. They asked about it again a few weeks later and I just said I didn't get around to it. Never came up again.
  • crusso 9y ago
    Kind of an interesting approach to it, I guess. I wonder how far you could take such a thing. * Could you initial every page but remove any pages you didn't like from a single contract? * Could you insert your own subtly edited version of their non-compete that you signed? I'm wondering where the legal line is between the employer's need to do due diligence and the expectation that the employee isn't doing something to trick the employer into thinking that everyone agrees to the employment arrangement.
    • lightbyte 9y ago
      Sounds like this [1] case where a man received a credit card offer in the mail, re-wrote some terms and sent it back, and the bank accepted it without reading it. He did win the initial lawsuit from the bank. [1] https://www.telegraph.co.uk/finance/personalfinance/borrowing/creditcards/10231556/Man-who-created-own-credit-card-sues-bank-for-not-sticking-to-terms.html?fb https://www.telegraph.co.uk/finance/personalfinance/borrowin...
      • meuk 9y ago
        I really respect that guy. From the linked article: "They signed the documents without looking. They said what usually their borrowers say in court: 'We have not read it',” said Mr Mikhalevich. I am always pissed off at the stuff that companies get away with, just because they often have a dedicated team of lawyers and a big budget for this stuff. Oleg Tinkov, founder of the bank, tweeted: "Our lawyers think he is going to get not 24m, but really 4 years in prison for fraud. Now it's a matter of principle for @tcsbanktwitter." Typical scare tactics, seems like they were trying to scare him into a settlement.
      • jermaustin1 9y ago
        He technically won a consolation prize (30% cash back debit card) on his counter suit after both parties withdrew their suits[1]. [1]https://themoscowtimes.com/articles/man-who-outwitted-bank-ends-700k-lawsuit-26770 https://themoscowtimes.com/articles/man-who-outwitted-bank-e...
  • Carioca 9y ago
    I've had an HR person tell me I needed to sign an NDA on the day I quit because it was missing (they forgot to hand me mine the day everyone got theirs). It included minimum damages of one year's salary for ANY breach. I had a lawyer friend write a much nicer and more reasonable version and told them that was the most I would sign. The only reason I even signed anything was to preserve the connections I had made there.
    • paultopia 9y ago
      That was very generous. I'd have laughed in their face in a similar situation.
      • Sean1708 9y ago
        No point burning bridges if you don't have to, you never know when a connection could come in handy.
        • PurpleBoxDragon 9y ago
          That's why you say no in a professional way. But I would still say no. If professionally saying no to such an unreasonable request burns a bridge, then it isn't just a bridge you shouldn't miss, it is a bridge that is better burned.
        • ben509 9y ago
          They're also kind of burning bridges. "Hey, remember our company? When you left we demanded you sign something that threatened you with damages!"
        • s73v3r_ 9y ago
          Burning bridges with who? The HR Drone?
    • otterley 9y ago
      It’s pretty typical to be asked to sign an NDA or other restrictive agreements at termination time if you’re getting a severance payment or other benefits that you wouldn’t otherwise get if you were voluntarily leaving the company. What were the circumstances in which they asked you to sign?
  • djsumdog 9y ago
    I've had two agreements that were separate pages, but all the recent ones were part of the actual job offer or employment contract. I feel like that's becoming more the standard/boilerplate.
    • cynicalreason 9y ago
      Is that even legal ? I think in Europe they can't be part of the employment contract but as additional papers ( i may be wrong )
  • asaph 9y ago
    Lately more companies are using digital hiring packets which employees e-sign, making this strategy essentially moot. You're unlikely to sneak under the radar when each field is required.
  • lmkg 9y ago
    (IANAL) Not signing the contract is one thing. Misrepresenting your position is something else. If you gave the impression that you agreed to the terms provided, then it's possible you could be held to those terms. A contract isn't defined by a signature. A contract is defined by a "meeting of the minds." The signature is commonly-accepted evidence that such a thing occurred, but it's not essential. By pocketing the contract rather than pointing it out to them, you've arguably violated the "meeting of the minds." The company was under the impression that was part of the agreement. You can dither about "due diligence" and say it was there responsibility to check, but in some cases that can be seen as an intentional misrepresentation on your part, for which there are consequences. I will concede that this is unlikely to come back to bite you in practice. But others should be aware that it is technically playing with fire. And personally, I consider it unethical.
    • bluGill 9y ago
      When you get a job offer and do not have a current job you are automatically signing everything under duress. You don't get to eat unless you sign that, therefore you signed it. Such arguments tend to hold weight in court.
      • ben509 9y ago
        I'd love to see just one case where someone flew that line past a judge.
    • ethbro 9y ago
      Unethical? It seems ethically equal to a company using their bargaining position to advantage themselves and disadvantage their prospective employees.
      • nordsieck 9y ago
        > It seems ethically equal to a company using their bargaining position to advantage themselves and disadvantage their prospective employees. You must be unfamiliar with the software development market. In which way do employers have massive market power which renders prospective employees vulnerable? If anything, it seems like developers have the upper hand (perhaps with the exclusion of game developers).
  • raarts 9y ago
    Be very careful with this. I have run into trouble because of exactly this. There was a conflict in payment, I left. Their lawyer argued that even though the agreement was not signed, I had acted as if it had been (by not objecting and continuing the employment), so it was still valid. I ended up settling, so losing money.
    • deleted 9y ago
      [deleted]
  • psychobabble 9y ago
    You can amend any contract given to you before signing and dating. Simply cross out the sections you do not approve of and initialize the amended sections. I have done this several times with both contract clients and employers and not yet been met with any opposition, but it always went a bit different each time. Every time I advised the employer or client of the contract amendment, sometimes with no detail, sometimes with reasons why. Only once did the customer sign and give me a copy of the amended contract, while in his presence at the office, no questions. All other times the employer or client never sent me a co-signed copy of the contract, but things went forward and I was paid. As others here have already suggested, I would agree that not signing the given contract and just going forward is not the right approach if you truly want to avoid the non-compete trap. Instead, amend the contract (or have a new contract drafted, as also mentioned earlier) and return it signed; it shows both your commitment to the work, and your attention to detail. The ball is then in their court. YOU now possess an amended, signed and dated copy of THEIR contract, returned to them along with an advisory of amendment.
• joezydeco 9y ago
  So recently I came across an Invention Disclosure agreement that a company wanted me to sign. The phrasing of this kind of threw me off: "I will promptly communicate to the Company each and every invention, discovery or item of intellectual property made or conceived by me, either as an individual or jointly with others, during my period of employment, and I agree that any such invention, discovery or item of intellectual property which I may disclose to anyone within one (1) year after the termination of my employment shall be presumed to have been made during my period of employment hereunder and shall become the sole property of the Company." At first glance it looks like a typical "I assign everything I invent while employed" deal, but the 1 year post-employment clause sure looks like a non-complete to me. What do you think?
  • organsnyder 9y ago
    Run away. No client/employer is worth that kind of baggage. It's even worse than a non-compete: instead of you simply being prohibited from competing with them, they automatically own your creations.
    • commandlinefan 9y ago
      Although I agree with you - no client/employer is worth that kind of baggage - I was sort of surprised, after four months of unemployment when my last company shut down abruptly (no warning, no severance), just how many things seem negotiable when you're starting to worry about unemployment running out.
      • bluGill 9y ago
        Fortunately when that is your only offer and you don't have a job you can tell the court you signed that under duress. Which is to say courts will not look favorably on the whole thing. Courts tend look unfavorably on any agreement that doens't allow you to earn a living doing what you know how to do. As such non-competes as bad as they are are very hard to actually enforce in court. The threat of going to court though can be scary. Remember if you need legal advice ask a lawyer not some random idiot on a forum.
• wemdyjreichert 9y ago
  How can I politely say "no way" while still getting the job?
  • maxxxxx 9y ago
    I think by politley saying "no way" :). When I did contracting I saw excessive non competes and usually when I told them calmly that I wouldn't sign this they would back off without problems. Only some companies made a fuzz.
  • logfromblammo 9y ago
    The answer is that you don't want to take the job if saying "no way" would be a problem. It's a coal-mine canary whose death indicates that more severe problems will occur after you have committed yourself. The presence of the clause that requires rejection is itself a lesser warning, but not necessarily cause for immediate alarm.
  • vorpalhex 9y ago
    "Hi, would it be possible to remove clause X?" usually works for me. I've occasionally had to use the slightly stronger, "I'm sorry, but I actually can't sign this until clause X is removed." Don't go into reasons, or get into a philosophical debate about it. The only time I've given an explanation was for a volunteer gig where I refused to sign an NDA at all, and had to explain to the coordinator "We can either be employee and employer where you pay me a lot more money then you have, or we can be two buddies working on a thing for free. We can't be two buddies where one guy has a contract against everyone else."
    • maxxxxx 9y ago
      "Don't go into reasons, " Agree with that. Never explain your reasoning without being asked. It makes you look weak.
      • foo101 9y ago
        And also gives them an opportunity to offer a counter-argument which now requires you to offer your own counter-argument which could lead to a long and unpleasant debate. Not a great way to start work at a new company.
• lr4444lr 9y ago
  Good article, except for the strange conflation of non-compete with debt. Debt implies an asset of value was received by the debtor at some point. No such thing takes place with a non-compete. Employment itself is a contract, not an asset. That's the reasoning behind CA's ban of these clauses.
  • jhauris 9y ago
    I thought it was an interesting way to look at it, and while I see your point I still think there's value in the company store comparison.
  • beagle3 9y ago
    Depends on jurisdiction. Turns out that in Israel, for example, where non-compete agreements require material specific pay, a non-compete lasting 3 years or more, is generally considered an asset sale and is taxed as a capital gain transaction (25% instead of the ordinary income which has brackets that go as high as 55%).
    • lr4444lr 9y ago
      where non-compete agreements require material specific pay That's materially different. Anywhere in the United States, AFAIK, non-compete is not part of a "golden parachute" with continued post-severance pay except for C-suite people - sometimes. Employment is at-will on both sides in the United States in the vast majority of private labor.
      • beagle3 9y ago
        Employment in Israel is (if there's no union involved) mostly at-will as well, even if not quite as at-will as the US. However, it is my understanding that e.g. California is similar. It's not that asking someone to sign a non-compete clause is illegal; what is illegal is not properly compensating them for it. That is, a clause like "in the event of lawful termination of employment by either side, for a period of up to (at the employer's discretion) 12 months, you will continue to receive your salary and will not be allowed to compete with employer". Such a clause is legal in Israel, and indeed it is how binding non-competes are implemented. I haven't had employees in California in almost 20 years now, but AFAIK it is similar there. It is probably worded differently because of how the non-compete laws on the books are written, but I've heard of cases where something to that effect was deemed legal and enforceable.
• jxramos 9y ago
  I remember reading about these clauses in contracts as the "fear and loathing" clause https://books.google.com/books?id=nWWAGnBDzJEC&lpg=PA164&ots=u0Z5JEZh7U&dq=fear%20and%20loathing%20clause&pg=PA164#v=onepage&q=fear%20and%20loathing%20clause&f=false https://books.google.com/books?id=nWWAGnBDzJEC&lpg=PA164&ots...
  • 52-6F-62 9y ago
    Glad I read that. Thank you. I probably be taking a look at the rest of that book. Is it worth the full read?
    • sedachv 9y ago
      Not the OP. I have read that book and highly recommend it.
    • jxramos 9y ago
      It definitely opened my eyes to the realities of this contract world that's strongly established by now. I'd recommend reading it, its a pretty fun read too being an ethnographic study and all. Covers the historical evolution and causes for it and basically the interests of the three parties that form the triangle of vying interests: employer, staffer, contractor.
• agmcleod 9y ago
  I think the only non compete i've had was for one of my 4-month co-op jobs. I think it lasted only a few months, and it was not to work at a software company in the same field. Which was fine, as I would be at school during that time anyways. I have signed agreements where anything I do on the company laptop is considered theres. So I just made sure to only use it for work, and put nothing else on it.
  • fencepost 9y ago
    > I have signed agreements where anything I do on the company laptop is considered theres. So I just made sure to only use it for work, and put nothing else on it. That is (or should be) pretty standard both on the company's part and on yours. As someone who spends chunks of his days as an IT admin for clients, work systems should be used for work, personal devices should be personal devices and in addition should not be allowed connection to company/internal wifi. I'm sure that "you" are the most brilliant and secure flower in the field, but if we don't have and enforce policies against personal use then it gets harder to crack down on Boris in the mailroom who wants to check his personal email on Yandex and download every elf bowling attachment that gets sent his way.
• saltandvinegar 9y ago
  I had an employment contract where I appreciate the IP competitiveness concerns of the firm/industry. The employment contract specifies that if they wish to enforce the 1 year non-compete they must pay my full base salary for that time. Seemed like a reasonable compromise to me.
• bungie4 9y ago
  Accept a job, NCA/NDA had a clause that gave them rights to any intellectual property I had developed in the PREVIOUS 20 years. I refused to sign. I was looking for work again after that pay period. Sidenote: The company I now work for does business with the first company, I ended up inheriting the first companies code base written for my current company. It looks like they can't hire much beyond script kiddies.
• jorgec 9y ago
  LAW > CONTRACT. Let's say that you sign a contract you should kill a person. It is illegal, and, since then, the contract is null and void, since you are not forced to honor it.
• holstvoogd 9y ago
  I've signed some crazy NCA's in my time, it the full knowledge that the only way to enforce them (here in the Netherlands that is), is through a judge that will asses the if it is reasonable and will force the employer to continue paying you in full until said NCA expires and it prevents you from performing your profession. I'll sign that 'you will not work in IT for 2 years' and take 2 years paid vacation if you insist on enforcing it, thank you ;)
• CaptSpify 9y ago
  The problem I have with non-competes, is that I've always been given them as I'm filling out paperwork. So my options are: Say no to the job that I've just quit my last job and moved two states away for, or sign it.
  • ep103 9y ago
    yeah, which technically makes the non-compete invalid. They can't change the terms of your contract after you've already accepted the position. What they're hoping for, is that you'll just bow down and take it, rather than pursue any other option, because you actually do want the job. The next problem you run into, is if you do sign it, and then don't immediately start looking for another position, then they could argue back that you accepted the new terms of the agreement. In order to push the case that the non-compete is invalid, you have to immediately begin taking action in accordance with the idea that the non-compete is a deal-breaking change of your employment contract for you. If you continue working at the job for another 2 years, for example, you likely won't be able to convincingly make that case. If you do leave the position, you likely have a case on your hands. In the event that they try to use the non-compete against you, you could claim the offer was invalid, because of the misrepresentation of your employment conditions, something you attempted to fix immediately upon starting the job (by attempting to leave again). This has been successfully argued in court before. You may even be able to argue for damages, particularly if you moved across country, like you imply. It is grossly illegal for an employer to, for example, change your pay rate right after starting a new job, so you might be able to argue the same for an unexpected non-compete. But obviously, I am not a lawyer. Everything I just said could be wrong, and you'd be crazy not to talk everything above through with one during the entire process. But that's the general gist of how these things work. Any company that does this is a very scummy company. Or they're just unorganized, and didn't think to send you all the paperwork before you started. I like chadash's suggestions above a lot.
  • chadash 9y ago
    I've asked companies for copies of all paperwork that I'll be expected to sign before starting. I just frame it casually before I accept the offer, like "hey, I'm very excited about this opportunity! I should have a final decision in a few days, but I just want to run everything by a lawyer friend of mine. Would you mind sending me any documents that I'll be expected to sign before I start working?". I've never had any resistance to this. If a company doesn't want to show you legal contracts until you show up to the office, there's something shady going on.
• robodale 9y ago
  There's a relevant discussion that happened recently here: https://news.ycombinator.com/item?id=16575920 https://news.ycombinator.com/item?id=16575920
• skrebbel 9y ago
  I agree with the general gist out there, but there are sane non competes. To take the one example I'm intimately familiar with, here in the Netherlands it's common for agencies to "rent out" some or all of their employees to work directly at customers (formally called secondment but I'm not sure that's a common term anywhere). This is because Dutch employment laws make firing someone hard, but terminating a secondment contract is easy. So it brings flexibility, plus the agencies are typically good at recruitment. Many tech companies's engineers have a huge chunk of their engineering teams be seconded via agencies. Those agencies typically have a non-compete which, if it's the Good Kind Of Non-Compete, disallows employees who quit to take a job at the company they were last seconded to. This means that you can't, on paper, quit the agency to work directly for the company you were already working at via the agency. In practice this works out fine, because the agency adds two values: flexibility and recruitment. What happens in practice is that if a company wants to take you over (a bit like buying a top sports player maybe), then the customer has to negotiate with the agency for some sort of buy-off fee. They tend to come to a sensible agreement fast, because the job market is great and if Joe Employee just was told he can't get his dream job because his current employer pulled a legal trick, he's not gonna want to keep working for the screwover employer long. So there's an incentive for the agency to make the deal. There's also plenty evil non-competes here btw. Like "you can't ever work in our industry anymore" or "you can't ever work for any of our customers (and oh by the way all tech companies in the area are a customer haha lol)", etc.
• quickConclusion 9y ago
  Thought experiment: it may be interesting for a corporation to insert a fairly crazy NCA rule just to see how the applicant reacts. Every now and then there are some crazy stuff happening in big organizations, and you probably want someone who is able to call those out, politely but firmly, rather than pushing them under the rug.
  • s73v3r_ 9y ago
    I don't think the lawyers would allow that kind of trickery.
• meuk 9y ago
  For my current consulting job I signed a contract with a non-compete clause for 1.5 years (and a similar relation clause - which forbids me to work with any relation of my employer for 1.5 years). I did discuss this with both my employer and friends in the industry. In the end my employer convinced me that it's non-negotiable and standard in consulting (which, I think, is true). This is kind of bitter, as I plan to leave this company after half a year (work is not challenging, I feel lonely since the rest of my team is offshore, not happy with the pay, 3 hour commute every day, many unpaid hours). I don't assume my employer will start a fuzz, since it's a nice company in general (just not for me). However, I can imagine that this could be a major problem if I left the company on bad terms (since they are basically a vanilla IT company, and most companies could be a client or relationship).
• chadash 9y ago
  I see a lot of stories/comments about not signing non-compete agreements on HN, so I want to throw in my own 2 cents. Many times, companies have standard paperwork that they want you to sign and they don't want to deal with the hassle of hiring someone who won't sign the forms that their lawyers already drafted. Making modifications means that they have to call up their lawyer (who charges $300+/hour), have a conversation where the lawyer tries to convince them why they should keep the clause in, and then pay said lawyer to modify the contract. It's a hassle at the very least and it makes you look like a difficult person to deal with. So think carefully about negotiating on this, because it means less room to negotiate in other areas. There are people out there who have a strong moral conviction against non-competes and who refuse to sign them. Power to those people. I don't care much for these agreements myself. But if you are thinking in practical rather than principled terms, I think it makes sense for many people to just sign the paper and move on. What it comes down to is this: How likely are you to ever want to work for a direct competitor of this company? If you are a chemical engineer working for a drug company, you are likely to find your next employment offer from another drug company and they very likely compete with your current employer. So be careful. But if you are a software engineer joining, for example, Dropbox, a non-compete might prohibit you from taking your next job at Box, Backblaze or any other online storage company, but it's very likely that you won't want your next job to be at a cloud storage company anyway, so think about that when deciding about whether to sign a non-compete. In general, the more specialized your skillset is, the more you should care about non-competes. But as my lawyer once told me before I signed a pretty lengthy non-compete contract, "sometimes it's best to just sign the thing and not worry about it. You're almost certainly never going to work for a direct competitor anyway". edit: Added emphasis above on the word "many", in response to rgbreneer's comment below. It's not that I don't think you should blindly sign non-compete agreements. It's that, like it or not, many employers don't like dealing with the hassle of someone who won't sign their standard paperwork. Maybe they don't care but their investors don't like it. Maybe it's a big company and the hiring manager doesn't want to deal with the bureaucracy of the legal department. Maybe they just really really don't want you working for a competitor. In any case, sometimes it's not worth fighting over. I once interned as a software engineer for a wristwatch manufacturer who made me sign a non-compete. The chances of me starting a wristwatch company or working for a direct competitor were close to zero. If that's the case for you, then weigh the risks involved, but you might decide that it's worth it to sign anyway.
• YogeeKnows 9y ago
  This is just one of those things which looks evil from 'Employee' perspective but important enough from 'Employer' Perspective. You have to also look at the how these clauses found their way into these contracts. Certain professions; Legal/Software/IT Services/Accounting; make it very easy for one or group of employees, to just take a company's current clients, offer them a low price, and start a new firm thereby causing losses for the original service company. Business which got burnt by their employees starting competitive business thereby started adding these clauses into their agreements. Sometimes competitors itself would poach key employee which is working for a Client X thereby gaining an edge and thats why the clause for 'Client'. It's much easier for a Company to let a potential employee go then position themselves to a losing client situation. Also Most software engineers when they leave the company take backup of not only the entire code they've written but also the entire code for the project they've been working on. Thats why the IP Protection clause. Again, your blog content would be different if you stopped being a Computer Scientist and started your own Company.
  • rrdharan 9y ago
    > Also Most software engineers when they leave the company take backup of not only the entire code they've written but also the entire code for the project they've been working on. Is that really common practice? I don't doubt some people do this but it seems very foolish to me so I'm surprised that you think most engineers do this.
    • CodeCube 9y ago
      I've known enough people that have done this, as to believe it to be pretty common
    • falcolas 9y ago
      I agree. Doing this would be stupid as hell, since it just opens you up to a lawsuit over stealing company secrets. Having knowledge in your head is one thing. Having actual code is another entirely.
      • 9y ago
• toolslive 9y ago
  I'm not a lawyer, but in Belgium these type of agreements are subject to extra constraints. For example a non-compete can only be triggered if they payed you enough. The reasoning is that if you did not earn enough you were not important enough for the company to have such a clause. They also need to compensate the fact they are invoking it (at least 6 months of wages iirc). Anyway, check with your legal representative how valid/legal the clause is, and if it isn't you can sign.
• evilmushroom 9y ago
  My division got laid off... my company is paying my full salary + bonus through my enforced non-compete duration of a year, which I think is the right thing to do if they're going to enforce such. (and knowing what I know, and what I worked on, it's in their best interests)
• emodendroket 9y ago
  This should be "why non-compete agreements should be legally curtailed," not "why I, personally, do not sign them."
• jglauche 9y ago
  One of the NDAs someone wanted me to sign had a phrase like "I will not share or use anything that I learned working on this project". Not limited to the client's project or anything. Whenever I work on something, I learn something. Be it a minor thing. How would I ever met that contract on my side? I can't forget what I just learned. My policy is that I charge about 33% extra if they don't trust me not disclosing sensitive information. In fact, if the project requires such, my obligation is to use more work and resources to make sure that this will never leak, including encrypting project files separately, make sure I don't write down notes in my usual 'survival notebook', etc. But the NDA has to be sane.
  • biztos 9y ago
    > I charge about 33% extra Has that ever come up for you in real life, with the client paying you the 33% extra and you accepting such a wide-ranging NDA/noncompete? It seems to me that you'd be taking on a risk much greater than 33% of your earnings on the project, though I suppose the risk of actual "enforcement" of the letter of the agreement is not very high.
    • jglauche 9y ago
      Once I was asked and I stated my conditions, but we ended up not having mutual trust in each other. The communication was weird and seemed very suspicious on their side. I slept over it and my gut feeling said not to do it. No one has ever sued me before but with my personal business as company structure, I am legally liable with up to all my private assets. I am not an anonymous entity, I get jobs mostly by recommendation, getting letters from lawyers messes me up mentally easily and I can't mess with my client's sensitive data in the first place. My extra charge is giving me extra time and compensation for adding extra security measures and most importantly (encrypted) documentation for myself if in any unlikely case they'd enforce their part. In essence: I value mutual trust a lot, if I feel lack of trust on their side, I need to be extra careful. The more mutual trust I form with a client, the easier it is to get a mutual understanding and less likely that they'll escalate it to lawyers and courts.
• doctorbigtime 9y ago
  I agree with the general gist of the article, for one specific reason: the non-competes discussed don't come with any pay. In much of trading-related finance, non-competes or garden leaves are ubiquitous, with periods lasting between 6 months and 2 years. However, they are usually paid, and in many cases paid well (more than your annual base salary). In my view, this makes sense: you may have learned a trading strategy that is highly valuable to the firm you are leaving and it is expected to decay over time. You are being compensated not to share this with competition. In that context, I eagerly sign non-competes with the expectation of having 6-18 months paid vacation at some point in the future. Some non-compete periods can be _glorious_. A guy in Chicago sued his former employer to have his non-compete enforced (and thus collect a massive pay cheque): https://www.natlawreview.com/article/employer-s-waiver-non-compete-period-order-to-avoid-1-million-payment-held https://www.natlawreview.com/article/employer-s-waiver-non-c...
  • rmc 9y ago
    That's fine. If someone is willing to pay you, then they are allowed to tell you what to do. Whether that's "Do this job", or "sit at home watching TV, but don't work for this company"
• dumbfounder 9y ago
  >Non-competes are agreements that challenge that basic freedom. They limit the freedom, it's a little dramatic to say they "challenge" it. A non-compete is just a contract, one that you enter (or don't enter) willingly. THIS is capitalism, that you can decide what you want to do without the government intervening. California's law is actually limiting capitalism by making rules that companies need to follow. (I am not judging either way, just trying to point out an inconsistency in the argument) I agree, don't sign non-competes if you can avoid it, because that's what's best for you. But this person is a little out there on their reasoning.
• mrchicity 9y ago
  Non-competes are fine so long as: -You are in a role with high search/discovery costs but low replication costs: A quant developing predictive signals, a salesperson or attorney building a client base, a researcher improving Google's machine learning techniques, a chemical engineer at a petroleum company improving their processes, a pharmaceutical researcher, a chef trying new dishes hoping to find a hot new idea. -Your work can't easily be protected by a patent. If you're developing brake pads or some other consumer product, the company should protect itself with a patent instead since competitors will just buy the product in the open market and reverse engineer it. However, even for these cases, knowledge of ideas that failed is a valuable roadmap for a competitor. -The non-compete is specific and targeted to direct competitive behavior. For example a law partner should be blocked from taking his book of business to another big law firm for a period, but working as a judge or government official should be permitted. -If unpaid, the period should be short. For a year or more, there should be significant compensation to enforce. The primary purpose should be protecting the company, not trapping employees or lowering compensation. For retention, bonuses and deferred compensation should be used instead. If used fairly, non-competes are good for both the employer and employee. Businesses that share ideas openly, with mutual trust among employees, tend to perform better. People in R&D all work very hard, and eventually each should generate results, but some people are just lucky and discover great ideas sooner. If all your lucky guys/gals walk out the door immediately, the company can't invest as much in R&D. And NDA/confidentiality contracts can only do so much. In obvious cases like a salesperson downloading his client list and profit numbers, or an engineer putting the source tree or product designs on a USB stick, it's a slam dunk case. But you can't vacuum someone's head. Someone who created a system at one company will likely create a similar system elsewhere. It's hard to make the case that a different system with some similar ideas, thought processes, or architecture is a direct copy.
• njarboe 9y ago
  What this author misses is that California also has a law[1] that makes unenforceable contracts that claim ownership of anything employees do on their own time with their own equipment. Passed in 1979 (amended 1991). I think other places hoping to create "Silicon $X" need to put anti-non-compete and this law in place to even have a possibility to create a similar culture to the Valley. (a) Any provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her rights in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using the employer’s equipment, supplies, facilities, or trade secret information except for those inventions that either: (1) Relate at the time of conception or reduction to practice of the invention to the employer’s business, or actual or demonstrably anticipated research or development of the employer; or (2) Result from any work performed by the employee for the employer. (b) To the extent a provision in an employment agreement purports to require an employee to assign an invention otherwise excluded from being required to be assigned under subdivision (a), the provision is against the public policy of this state and is unenforceable. [1]https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=LAB&sectionNum=2870 https://leginfo.legislature.ca.gov/faces/codes_displaySectio....
  • ryandrake 9y ago
    > Relate at the time of conception or reduction to practice of the invention to the employer’s business, or actual or demonstrably anticipated rese You can fit the entire planet through that loophole. Most employers can easily show that your side project “relates” to something they do or might one day do.
    • yebyen 9y ago
      I would be careful trying too hard to fit anything at all through that loophole though, as I'm pretty sure in California, companies that push employees to sign non-compete agreements that are deemed unenforceable (which is objectively most non-competes in California), may be subject to statutory damages and may wind up getting summarily owned in the countersuit. I have no source for this and I am not a lawyer (but nobody knows you're a dog on the internet...) – if anyone knows more about this than I do, I'll happily read and be glad to learn something, but this is a subject I've read a bit about. OK, actually, it wasn't that hard to find a citation: http://levinebakerlaw.com/publications/post-employment-non-competes-unenforceable-in-california/ http://levinebakerlaw.com/publications/post-employment-non-c... see the phrase "independent wrong" You still have strong protections as an employer against "unfair competition" but you are better off not trying to pass any non-compete agreement to your employees, as you may be on the hook for damages if it's determined that your NCA is unenforceable, so you misled the employee(s) who have signed it. California law is (and has always been) very favorable to employees, compared to other states.
• ideonexus 9y ago
  This is the flip-side benefit to living in Right-to-Work states. On the one hand, it's nearly impossible to unionize, but working as a contractor in Virginia, I had an agency try exercise the non-compete against me when I tried to take a job directly with their client. That client happened to be the Society for Human Resource Management. Their management laughed at the attempt and had a lawyer send the agency a letter explaining that Virginia was a Right-to-Work state and the non-compete was unenforceable. In North Carolina, another Right-to-Work state, my government contractor tried to exercise the non-compete I had with them to prevent other companies from competing for the contract. My co-worker had us all sign up with his lawyer, who defended us breaking the non-compete as unenforceable in NC. The contractor didn't bother taking the case to court and was only using the non-compete to bully employees who didn't know better. I've been hearing about lobbyists working to make non-competes enforceable in Right-to-Work states, and I'm not surprised. The point of the laws was to defend corporations against unions. I imagine the fact that it protects individuals against companies is undesirable to the powers that be.
  • pktgen 9y ago
    Right-to-work is strictly anti-union BS and has nothing to do with non-compete agreements. A quick search suggests that non-competes are enforceable in both VA and NC if they meet certain criteria.
  • twblalock 9y ago
    These things aren't related. For example, California is not a right-to-work state but it has banned noncompete agreements since the late 1800s, except in a small number of very specific situations.
• arca_vorago 9y ago
  Like I've said before, learn how contracts work people! First, never sign willy nilly. second, you always have a right to mark out and modify parts and present them back for acceptance. Third, each thing is a separate contract, don't assume because you accepted the employment agreement that also means you have to sign (an unmodified) anything else like an nda or non-compete. I just got out from under a biotech non-compete of two years recently, but after talking with friends in the legal friend they just laughed and said they love getting non-compete tossed because they are mostly unenforceable. As a senior sysadmin I always saw it as a sort of test. I'm going to be entering the company into contracts (with the isp for example) so I better be able to actually read them and know how to modify and negotiate them. It's one of the things I tell my teams too... stop signing anything anyone puts in front of you, and that includes HR! These are the sort of issues on the tech side that a MBA in a role like CTO/CIO should be catching and correcting. As for employment agreements, there is a lot of stuff that HR does that ought to be consulted with counsel but isn't, and is therefor is questionably legal or enforceable.
• kentt 9y ago
  Last time I signed one it was very weakly worded. I laughed and said "I'll only sign this because it's completely unenforceable here". It was a bit awkward.
• CharlesMerriam2 9y ago
  I work in California, specifically in Silicon Valley. What is the "Non-compete Clause" of which you speak? The only time I have heard of is a snippet of conversation that "Judges just laugh at them." In practice, there a plethora of laws that provide legitimate protection to employers. Taking a copy of the software, copying the customer list, purloining the secret to creating nooks and crannies in muffins are all protected theft. You even have restrictions on your research if you are paid for research in one company and try to do the exact same thing for another company. It works.
  • yebyen 9y ago
    In California, judges do laugh at them, because the vast majority of US non-compete agreements would be unenforceable in California. Employees can be prohibited from using trade secrets from the job after their employment is ended as you say, but the "non-compete" itself as generally described can only be enforced in the case of a business owner who sells his business, and "its good-will" (edit: and the good will is revokable and must be spelled out and compensated.) The assumption underlying the exception being, last I heard at least, that if a business owner sells their business to you, there is an expectation that they are doing it in good faith, and they will not intentionally undermine the success of the business that you bought. It would be "in bad faith" or faithless for that former business owner to go out and round up all of the customers of your business, and start marketing at them new contracts with a new competing company that does just what the company you purchased does. This is, to my knowledge, only really the law in California (non-competes are mostly enforceable in other states), but my understanding is that if a person from another state has some other kind of non-compete agreement that they wish to escape, they can also do it safely by moving to California and going to work for a CA employer. My ailing memory tells me there was a third different condition in which non-competes were able to be enforced in CA, but that it was also very narrow and unlikely to cover a regular former employee, or ever prevent them from working for a competitor... if anyone knows the law better than I do, feel free to chime in with whatever I'm missing. I think I remember that the "good-will" clause needs to be spelled out explicitly, in terms of a period of time and a specific compensation that it is tied with... that might be what I had forgotten. The good-will is revokable and the penalty for revoking it can be no more than the specific compensation associated. I seem to remember actually, that the good-will compensation must be structured as a series of payments, because the penalty for revoking your good-will is actually just the discontinuation of those payments, not a statutory damage or requirement of returning any of that money that was already paid. IOW California judges will usually just laugh at non-competes. I think I also remember that there is a statutory damage amount that employers must pay, if they write and attempt to pass any overly broad or non-enforceable non-competes as a condition of employment. IANAL though, of course ask your lawyer if you really needed to know...
• dahart 9y ago
  There's a 3rd alternative. I recently signed a non-compete, but hired a lawyer to write an exception to the non-compete for my own nights & weekends startup. As part of that process, the company hiring me and asking for the non-compete agreement had to agree that my startup was not currently competing. It was some of the best money I ever spent, and it allowed me peace of mind, and also allowed me to sign the company's contract, so there was some peace of mind for them as well. The language of my non-compete (and most non-competes I've seen) is so vague that just writing any kind of software for someone else could be seen to violate the agreement.
• deleted 9y ago
  [deleted]
• heywire 9y ago
  What are your thoughts about a non-compete which is tied to a bonus, restricted stock, or some other reward? I worked for my employer for several years without a non-compete before I received my first chunk of restricted stock. In accepting the stock grant, I had to accept a non-compete for a period of 1 year, which included both competitors and customers of my employer. It was a significant sum, but not a year's salary. I feared that if I turned it down, I would be seen as disloyal, and it could cause my employer to pass me up for promotions or include me in the next reduction-in-force. Since then, I've received almost yearly bonuses and stock grants which carry the same non-compete, so I am probably closer to having received a year's salary worth of additional consideration by now, but I still feel wary about the non-compete. (edit) Note: I'm not in California
  • beagle3 9y ago
    It depends on your jurisdiction, mostly. In some jurisdictions, enforceable non compete requires extra-ordinary compensation, which has to be comparable to a base salary. If the industry (and especially the company) gives almost everyone a bonus, then it is ordinary and thus not enough to make the non-compete agreement valid. It was customary for employers to negotiate a reasonable salary, say $96K, and write it down in the employment contract that "you get a base salary of $48K/year, and an additional $48K/year is compensation for your 2-year non compete". Courts struck this down many times, since this wouldn't be extraordinary in the first place; and also, because if employee quit after 1 month, they would get $4K in compensation for a 2-year non compete, which is not remotely of the same order of magnitude as the income lost due to that non-compete.
• Doches 9y ago
  From the tail end of the OP: > I’m a Computer Scientist. We don’t have unions and we don’t collectively bargain. Basic workers rights are our responsibility I've always been bothered by this question. Why _don't_ we have unions? What is it about the tech industry that makes it so resistant (especially in the US) to labor organization? I work in the EU for a US company, and my American colleagues universally seem to find the idea of collective bargaining _preposterous_. Often, they even seem offended by the idea! Is this a particularly American trait, or something endemic to tech?
  • deskamess 9y ago
    When we are young hubris and arrogance are quite up there. We are worshipped with $100K+ salaries and it goes to our head. We do not think about age-ism or time needed to spend with a spouse, a child, or a parent. There is a lot of stuff that comes down the road, but right now, all we know is that we are gods. No need for a CBA - even though other high paying professionals use it. No use of agents who can bargain better on our behalf. We know we can do it all. And we do. Life slowly comes into play. Family, health, house... the dynamics change. Your control diminishes. You look behind and a new generation is at the employment door. You keep your skills up with what time you have available but not sure if you have chosen the right skills to upgrade. Too many variables. A good portion of your retirment is likely at the mercy of the stock market. Having an entity representing the interests of an employee is not in the interest of an employer. It makes them more expensive. So change is going to be difficult. It is hard for a union to grow if the drivers are older. It requires the early and middle part of the employee age distribution participating to be effective as they are not easily replaced.
  • axedwool 9y ago
    I think it's a bit of both. American society indoctrinates people with the negative aspects of labor unions. They're run by radicals or the Mafia, they have rules which limit innovation, hold back talented individuals, sanction goldbricking, and on and on. The pro-union side of things is not often promoted in the mainstream. When the pro-union side of the story is promoted, it's usually in a context where a company was doing something extremely bad to extremely vulnerable people. It's a tough sell to convince an engineer that they're in the same position as an early 20th century lumberjack or coal miner. I've known people in tech who think of themselves as self-made people and so they further don't like the idea of collective bargaining on a philosophical level.
• robocat 9y ago
  Either remove the page (less obvious) or strike out the clause. Or if sneaky, reprint it without the clause. Take the agreement "to your lawyer" first, modify it, sign and return. If a clause is widely regarded as unethical, it seems appropriate to respond unethically.
• DBCerigo 9y ago
  Wondering if we (as a group of people who will face many non-competes) could generate a standard response to these kinds of clauses in employment contracts, which could be more effective then everyone rolling their own. I made a (pretty bare for now) repo for it if anyone is interested - https://github.com/DBCerigo/non-compete-standard-response/blob/master/README.md https://github.com/DBCerigo/non-compete-standard-response/bl...
• brooklyn_ashey 9y ago
  Does anyone know an excellent attorney in NYC who could examine a non-compete an engineer signed so they could actually accept another job offer?
  • amcooper 9y ago
    +1. I know people who will probably need this.
• alain_gilbert 9y ago
  Is it legal to publicly share a job contract/agreement ? It could be nice to have a website that list all the companies and link all the known contracts for these companies. We could even have a summary of the weird clauses. Or some checkmarks. IE: [X] You own your IP after work hours produced on your own computer This way, someone would know when he receives an agreement to sign from a company, what clauses he needs to be careful about. Or what clauses people are usually able to negotiate / modify.
• BrandoElFollito 9y ago
  We can have non compete provisions in contacts in France but this goes both ways: the company must pay you during the non compete time, when you are unemployed.