3 ms·
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 paper
by 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.
- rgbrenner 9y agoThis is terrible advice. I'm happy to hear you've never been sued or had a contract used against you... I have had a contract I've signed used against me (although it wasn't an NCA)... and on that day, you're going to have a terrible time. People who say they ask for the moon and never plan to collect are liars. They paid someone to draft that contract with that language. That cost real money. Why would they do that, and then cause friction in their dealings with others by asking them to sign it, if they never plan to use it?
- chadash 9y agoA) A lot of companies go to their lawyers and say, "hey, can you give me some standard forms to have employees fill out". Non-compete clauses (for better or worse, and I think for worse) have become a part of that standard contract. Generally, the more standardized your paperwork is, the less you pay lawyers. B) I fully agree with you that you should never trust someone who says that they don't plan to collect on a contract. Peoples' intentions often change once money is involved. But for a typical software engineer (pretty common on this forum), your skills typically transfer to many non-competitors anyway. If you work for Spotify[1] and have a non-compete, sure, you should fully assume that the non-compete will be enforced if you jump ship for Pandora. But I'd venture to guess that most Spotify employees don't move on to direct competitors anyway, but rather to software engineering roles at companies that do unrelated things. C) Like anything else, it's a calculated risk. When I talked to my lawyer, he said that many people just ignore non-competes and don't have any issues, but that some people have painful legal battles over them. So before signing one, ponder the following: Are you likely to want to leave to a competitor of the company that wants you to sign a non-compete? Do you think you will want to start your own company that competes? Are you going to be employable among non-competitors? For many people this is a non-issue. [1] I'm just using Spotify as an example. I have no idea what their employment paperwork looks like.
- JustSomeNobody 9y agoI worked for a company in field A. They were bought by a PE firm and we were all given three days or out to sign an NDA. I signed. FF a short period of time and I'm negotiating employment at a firm that did work in field B. They had a subsidiary someplace else that happened to do similar work in field A. New company had to have their lawyers draft a letter saying I was not going to work with the subsidiary for the remainder of my NDA before I was officially hired. New company could easily have just walked away from the deal costing us all a good deal of time. Luckily they really wanted to hire me and didn't. NDAs are toxic. Don't encourage anyone to sign one.