Fair Compensation For Non-Compete Clauses? 199
LL writes "This article notes how non-compete job contracts allows indirect control of one's actions, even after leaving the direct employment of a company. Apart from the business ethics of using them as anti-competitive measures (a separate topic by itself), the question is what should be a fair compensation for removing yourself from the technology environment where skills suffer alarming bit-rot? Other sectors (e.g. banking) have 'gardening leave' where they basically pay you to remove yourself from the 'inner fraternity' before joining a competitor, but what should be a fair compensation for an enforced pause in your career? 6 months @ 150% base pay? 200% @ 3 months? Or are there standard clauses that IT workers have widely accepted as the norm?"
Value of stock options, specific agreement (Score:1)
My non-compete was pretty specific (can't work on products that are in the same market that the product I was working on addresses), so it doesn't limit my options very much. There are a lot of other interesting jobs in my area that are in companies that do not sell products in the market space that my non-compete covers.
In my situation, given that it was necessary for the acquisition to go through (which was a huge windfall for me), and that it only limited my options a little, I decided to sign it.
VA Linux stock spirals ever downward: Now at $3.50 (Score:1)
Re:What's the core (Score:1)
And don't provide "salary history" on resumes. (Score:1)
The same is true with non-compete clauses. When every company inserts them into employee contracts and says "sign or we won't hire you", then the argument of "just don't work there" might as well be reworded to say "find a new job field to work in". Not a valid option. And while they may not be enforcable (as in California), non-compete clauses need to be outlawed and outlawed retroactively.
Re:Good Luck (Score:1)
Don't bother renegotiating. You can reword any contract or agreement on your own by simply blacking out completely all objectionable language. You've signed their form, and it won't cause you any loss.
If they send a copy of the original form to you again, black out the crap again and send it back. If they ever tell you that you must sign the exact statement that they give you, There probably is an implied threat involved.
If you feel forced to sign something you don't want to sign, always add the words "Under Duress" with your signature.
They are legal and can be enforced. (Score:2)
Re:Is non-compete even legal? (Score:2)
They can prevent you from taking information you got inside the company (trade secrets etc) and using them else where.
Re:Freezing IT (Score:1)
Twice in AM did I temporary lock out two different IT Specialists.
Huh?
One was because he going to porn sites, then, deleting the records in the ADC of it, and the other was because he was viewing other people's emails.
Okay, these are reasons for termination, not pros for making people sign non-competetion agreements.
Their contracts allowed me to suspend them upto three months at only 50% advanced pay and that they weren't allowed to work in the same field during that time.
That's all fine and dandy... I really don't know what that last point has to do with getting terminated/suspended for doing something wrong.
Re:from a lawyers prospective... Tech Union? (Score:1)
I also find that it would be despicable to tell a corporation that they couldn't hire permanent replacements for me.
Why? They're perfectly pleased to say you can't find a replacement for them.
Re:Don't do it. (Score:1)
--
Often entirely reasonable (Score:2)
If I hire an engineer to develop products for me, I am absolutely within my rights and reason to ask that they do not perform the same services for a competitor for a certain time after their employment with me expires. Otherwise, it would be very easy for someone to come into my company, soak up my technology, business plans, and clients, and then give me the finger as he or she leaves to a cushy job at my main competitor, who would be happy to pay a premium for my business secrets.
Proving that information was moved from one company to another is almost impossible - but a noncompete agreement can do a great deal to help maintain the employer's IP. Nothing wrong with that at all; I don't understand why people are decrying this so much.
A possible compromise is to list, in the contract, the specific industries or product areas which are off-limits. This would give the employer the protection they deserve with the flexibility the employee deserves.
Re:Is non-compete even legal? (Score:1)
Re:from a lawyers prospective... (Score:1)
Re:from a lawyers prospective... (Score:1)
I would have thought "wrongful act or threat" would imply "unlawful" (though not necessarily "criminal"). What's the difference between "wrongful termination" and "unlawful termination" ?
Agree to a pay cut or be fired. Sign this agreement to bathe my dog every week or be fired. Sign this agreement to work 80 hours per week or be fired.
I think those are all unlawful. Is it legal to reduce an employees pay without changing either their job or working hours ? Is it legal to require employees to bathe the boss's dog ? Is it legal to require employees to work 80 hour weeks ?
Re:from a lawyers prospective... (Score:1)
Re:Out of sight, out of mind... (Score:2)
This is INSANE! How can this be offtopic?
I don't blame the moderators, I blame the meta-moderators. Get off your butt and police this place.
Has anyone noticed an upsurge in crappy moderation lately? It seems that in the past month everywhere I look there's a goatse.cx troll marked insightful, or comments like this one marked down.
Come on people, meta-moderate once in a while.
Sheesh.
Re:Who cares about karma? (Score:2)
I saw my PERMANENT RECORD the other day and wouldn't you know, my
Re:Don't do it. (Score:2)
That's pretty straightforward, no?
In the case of a company that came by with a new "agreement" I simply point out that an agreement isn't binding without all six elements of a contract, one of which is that each side has "valuable consideration." If they want to offer me valuable consideration (continued employment is insufficient) for signing an additional agreement, well, we'll have to negotiate that.
One example is the "agreement" passed around at Linuxcare about the new employee handbook. It purported to cancel all previous contracts (such as the one for salary and stock options). I returned my own form stating that I had read and unerstood the employee manual -- but not that I'd agreed to it. No one ever said a word.
Unfortunately, I've *had* to learn to be tough as nails in this business because, over 25 years, I really HAVE seen every kind of sleazy stunt pulled.
_Deirdre
Re:Don't do it. (Score:2)
"If a company makes you an offer without mentioning a non-compete and you accepted it, you have a contract."
I previewed it and it looked fine, it just garbled upon posting. Gar.
_Deirdre
Re:from a lawyers prospective... (Score:2)
No, because the fundamental concept of a contract requires that it be an arm's length transaction -- and that's not. It is instead a hostage situation.
_Deirdre
Non-compete clauses in California (Score:5)
California Business & Professions Code 16600-16607 [findlaw.com].
Special point of interest:
16600. Except as provided in this chapter, every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.
Note: IANAL
An issue of separation of knowledge from skill? (Score:3)
But are the skills they have acquired working for that community useless and worthless?
The secret of, uh, pardon me, path to success is the ability to apply knowledge without revealing details about what was being worked on that required the acquisition of the knowledge.
Its possible to have non-competition clauses that restrict one from a particular application domain without its impeding with employment in a related but non-competing domain for a specified period of time.
In effect, if you work for A, you shouldn't go work for ~A to do the same thing for a while. Specially if you work in the [censored] community.
That doesn't mean that you can't apply the skills gained while working for A to solving the problems of B or C. The marketing has to be done by skill not domain knowledge.
Re:Signing Contracts = Money (Score:1)
Reality Check (Score:2)
I know i shouldn't feed the monkeys, but... (Score:2)
Re:from a lawyers prospective... (Score:2)
It's not neccesarily as grim as PorcelainLabrador makes it sound...
The laws regarding non-competes vary from state to state. In some states, the courts are very unwilling to enforce a non-compete agreement that would effectively require someone to relocate in order to practice their trade, or which has provisions they consider overly broad (prohibiting a former bank manager from working in any capacity involving finances, for example.)
For the record, IANL; but I've consulted with a couple on non-competes I've signed while working in Pennsylvania. The above poster's comments are still entirely valid - get a lawyer to check the agreement before you sign, and don't sign any contract until you understand what it means to you and what the implications are.
Re:Don't do it. (Score:2)
LK
Re:Don't do it. (Score:2)
Not at all, if I don't lie. As long as I never verbally agree, it's their fault, not mine if they can't read.
LK
Re:from a lawyers prospective... (Score:1)
They have never published a list, so if it were to ever come to a legal battle, I could simply point that fact out. Besides, I highly doubt that they would enforce this if it were a senior-level engineer or manager, or someone who could seriously damage the company.
I signed the document because it specificly described what a competitor was. I felt that there were plenty of other niches where I could utilize the same skills in this industry where I would not be competing with my company.
Can't ask for too much (Score:2)
A non-compete compensation package that basically paid you for the period you were not employed would satisfy part 1 but not part 2, since you would have the ability to basically quit any time you wanted and pick up a pay check until you could go to work for the competitor. They're not going to pay you to fsck around until the competition can hire you.
I'd ask for 3 weeks of pay for each year of service, and full health benefits for the entire non-compete period. This ensures that they give you something in severance to help tide you over, and gives you an incentive to not job hop often since the payout will be dependent on your long-term loyalty.
I'd also negotatiate the non-compete to be contingent only on resignation or termination for cause, and not on involuntary economic termination. Who wants to get laid off AND told they can't get a job?
If they can "require" a non-compete at all your bargaining power is probably weak to begin with. If you can negotiate something that "gives" them something without demanding a free ride from them, you're likely to get something in return.
Contractors' variations (Score:2)
A variation on the non-compete clause is one seen frequently in contracts that consultancies issue to contractors. Basically, if you get hired by one company to go do work for another, they will nearly always pursue a clause in the contract preventing you from going to work for that company for some period. So, if The A Consultancy hires you go to work for The B group, they'll probably insist that you not work directly for the B group for some period of time (a year is common). This prevents them from pulling a "cut out the middleman" maneuver.
This can get interesting once the layers of indirection start to get thicker, though. Let's say, from the previous example, that The B Group is doing a contract job for C Incorporated. There's rarely anything in the contract that prevents the A employee from working for C, even though the effect is largely similar. I know someone who infuriated an old employer by doing exactly that, even though what she did was within the bounds of the contract, and even though her old employer had basically brought it upon himself by treating her like dirt.
-----
"You owe me a case of beer. Sucka'."
Re:Don't do it. (Score:1)
-- Michael Chermside
Yeah, I signed your contract... (Score:2)
...yeah you caught me...
...and yes, if you so annoy me I will post all of your source code on the net AND email it to every one of your competitors.
So do you still want to make an issue of this?
Go ahead and sue for damages - but remember you won't get amymore from me than what I have. Who will be hurting more after the dust has settled?
Re:Don't do it. (Score:2)
What we absolutely don't need is unions or "professional" licensing in the computer business.
Re:Move (Score:1)
When word got back (to the contracting firm) the bells and whistles went off. Within an hour I was contacted by my manager, the VP, and the company's lawyer, who all told me (with varying degrees of emphases) that they would sue the sh*t out if me if I accepted. I was immediately ordered back to the home office and (apparently) very intense words flew back and forth between executives and directors of both Gigabuck firms.
The next two days were very very ugly and I was so completely terrified at being caught in the middle (and with over $35k in school loan debt back then) that I ended up searching for a new job (and got one the next day after looking). Both sides tried to go into damage control mode but I had already accepted the new offer.
I didn't do anything to raise the offer (except work my tail off and do a good job) and it did colour my perspective for a long time after that. 10 years later it still leaves me with a bad taste when I remember it.
which Texas are you talking about? (Score:1)
Re:Is non-compete even legal? (Score:2)
-m
My 2 pence (Score:2)
In cases where your position is unique enough (read: VP or other important position) where such a clause is applicable, and in any other case, such contract should involve:
Your asking your former employer if you can take the new job you want. If it's in the same field, they can decide to not allow you to take that job. If they DO decide not to let you, and you don't want to contest it, they should have to pay you according to a fair salary to stay out of that job.
Re:Freezing IT (Score:2)
You suspended them for three months, with prior-agreed compensation... sounds like a relatively fair contract.
Re:Often entirely reasonable (Score:2)
Actually many states make this practice illegal. In other cases the ability to enforce this is very difficult. Saying you are 'absolutely within your rights' is quite questionable.
I don't understand why people are decrying this so much.
Why? It's very simple. A non-compete interferes with your ability to feed your family and can ruin a person's career. This is why they are illegal in many states, and are so hard to enforce.
a noncompete agreement can do a great deal to help maintain the employer's IP
There are other laws on the books that prevent misappropriation of trade secrets. Saying the non-competes are needed for this is wrong.
MOVE 'ZIG'.
Re:from a lawyers prospective... (Score:2)
Proving coercion may be tough, however...
Re:from a lawyers prospective... (Score:2)
100% salary, plus insurance, 401k, bennies.... (Score:3)
Re:Good Luck (Score:2)
Full Pay (Score:3)
I was given leave soon thereafter.
Freedom to choose (Score:2)
Competition? with what? MS doesn't offer a service like that... IMO it's a pretty weak charge.
>Micro$oft sued the guy ( and the other Micro$ofties ) and they had to fire themselfs from Crossgain.
No, MS threatened to sue and offered them a deal requiring them to use MS software instead of Sun and Oracle stuff. They decided the legal battle wasn't worth the time and money, but they didn't want to be forced to use MS software, so they fired themselves instead. Thus, giving them the freedom to choose their own software... pretty evil shenanigans from MS IMO.
---
competition with a PROPOSED product? (Score:2)
---
Re:My 2 pence (Score:2)
Re:Don't agree to a blanket non-compete (Score:2)
Walt
Re:Don't do it. (Score:2)
So the truth is and? That's not very insightful!
--
Re:Non-compete clauses in California (Score:2)
Is there a lawyer out there? It looks to me like if you're in the stock plan, they can screw you, even in California.
Only if you quit? (Score:2)
Yes? No?
As far as compensation goes, I say a valid compensation would be 100% of your salary at termination for the duration of the non-compete clause.
Re:A data point from quite a few years ago... (Score:2)
Yeah, but then you'd have to live in New Jersey and work for Dendrite. I don't see either of those things as very attractive. But maybe that's just because I worked in the call center there. Almost anything is better than working in a call center.
_____________
Quid pro quo? (Score:2)
In seems to me that in all fairness that if a company wants a non-compete they should pay for it - say a retainer of 30% of previous salary while it's in force - you quit company X and they don't want you to work for company Y - you don't so long as they pay you for it - they stop paying you get to work where ever you want ....
Non-competes & horror comic books? (Score:5)
16603. Every person who, as a condition to a sale or consignment of
any magazine, book, or other publication requires that the purchaser
or consignee purchase or receive for sale any horror comic book, is
guilty of a misdemeanor, punishable by imprisonment in the county
jail not exceeding six months, or by fine not exceeding one thousand
dollars ($1,000), or by both.
This section is not intended to prohibit an agreement requiring a
person to purchase or accept on consignment a minimum number of
copies of a single edition or issue of a magazine or of a particular
book or other particular publication.
As used in this section "person" includes a corporation,
partnership, or other association.
As used in this section "horror comic book" means any book or
booklet in which an account of the commission or attempted commission
of the crime of arson, assault with caustic chemicals, assault with
a deadly weapon, burglary, kidnapping, mayhem, murder, rape, robbery,
theft, or voluntary manslaughter is set forth by means of a series
of five or more drawings or photographs in sequence, which are
accompanied by either narrative writing or words represented as
spoken by a pictured character, whether such narrative words appear
in balloons, captions or on or immediately adjacent to the photograph
or drawing.
A data point from quite a few years ago... (Score:4)
Re:Is non-compete even legal? (Score:2)
It depends on where you are. If you are in a right to work state (Most commonwealths are.) non-compete clauses usually will not hold up. I live/work in Virginia, when non-competes are known for being blasted away by conservative judges who will protect a person's right to work where he chooses.
In more liberal states, non-competes are often enforced by the judges there, who tend to side with the corporations.
True story of non-compete (Score:2)
He was working in IT for a publically held firm, had been there for years and now has extensive experience in technology related to a particular financial field.
He accepted a job with a company that, while not exactly a direct competitor, was physically located in the same region, and also related to finance. He gave notice, and started at the new firm.
A few weeks later, he was unemployed.
His former employer basically forced his new company to terminate him, based on his non-compete. The real motive was revenge for leaving the company, and his solution to the problem was to find a new job, and this time not tell anybody at his original employer the name or industry of the new employer.
The moral of the story is, make a clean break with your old employer- what they don't know can't be used to sue you.
Re:Don't do it. (Score:2)
What if the employer doesn't pay?
And don't forget:
You don't have to get a lawyer or go to court. Just go the nearest labor board ("Department of Industrial Relations") office and fill out a form.
Good Luck (Score:5)
Re:from a lawyers prospective... Tech Union? (Score:2)
(Anyone know of any tech unions?)
Re:from a lawyers prospective... Tech Union? (Score:2)
YOU might find it dispicable, but "ethics" is not in the business lexicon. A business wouldn't think twice about ruining you completley.
We have to face the fact that we're not powerfull enuf or valuable enuf on our own to protect ourselves.
Re:Is non-compete even legal? (Score:4)
In regards to non-competition clauses there's a very good reason for a company having them. Say you work at a real-estate company (X) handling several large corporate accounts. You decide to leave company X. Since you are the prime contact for Company's A & B, you can call them up and say "Hey, I've left X, but I'm moving to Y and would love to work with you there." Thus A&B leave X and they lose millions of dollars. Now a lot of times a company will lease restrictive clause that says "for a period of 18 months after leaving our firm you can't talk to any of your old clients". This is actually reasonable and quite fair.
Another good example of a no-compete clause was the one Ross Perot signed when EDS removed him from the board. He was given something like an $8 million severance package and told he could not compete for a period of 2 years (I think). After those two years were up, he started Perot Systems and now vies with EDS for many of the same clients.
When technology comes into play it gets a little more tricky. If you work at company X & then move to Y you can actually use knowledge of the product from company X to build a competing product at Y. This can't really be covered by normal patent protection which is why the no-compete clauses have come into play. A broad no-compete clause is ridiculous, especially one that covers the entire IT industry. One that says you can't work at a streaming media player company for 12 months after leaving is not. Courts will uphold these although I'm not sure who would get sued if you violate it. It's possible the new company would pay damages but I'm not sure.
Mordred
Whatever you can negotiate. (Score:2)
Personally, I would push for 3 months at 150%-200% pay. The Tech industry moves along quickly and that kind of bump in the road can be harsh.
It all depends on your skills and industry history, for sure - but it all comes down to knowing that everything is negotiable and you are not going to get the best deal be sitting back and hoping they are nice to you. Be direct, know your base assets (to their company) and push for what you value as a comparable compensation to their non-comp. contract.
Re:Non-competes & horror comic books? (Score:2)
Re:Move (Score:2)
Molog
So Linus, what are we doing tonight?
Re:Move (Score:2)
Only enforceable under very specific circumstances (Score:5)
A non-competition clause in a contract is enforceable so long as it does not fall under the definitions of a bunch of other laws, among them the "Unfair contract terms act", and a few others more specifically dealing with employment law.
A non-competition clause must be
- Limited and reasonable in time - it cannot exceed a period that the court deems "reasonable"
- Limited and reasonable in scope - this is complex and I'll cover it below
- Fair - you can't cripple a person's future career unless the compensation is there, kind of like a waiver to the usual consideration laws - here consideration has to be both present AND sufficient, whereas usually it only has to be present.
In cases that have been tried, what usually makes the clause non-enforceable is the scope argument. The scope is a kind of function of the type of industry, the role the person had in their last company, the size and presence of that company and the number or market size of the markets in which the individual is prohibited from exercising those skills.
For example, if you were chief technology officer of a tiny development company that worked off a single product, they can't enforce a clause preventing you from working in the IT implementation industry in an entire country, because the broadness of the exclusion is far greater than the broadness of the role given up.
This rule seems to be constantly open to re-interpretation, but in almost all cases the court leans towards individual rights rather than those of the company. My guess is that this is because the companies rarely need the clause to protect themselves - if they have proprietary technology, then their copyrights and patents ought to protect them, and they shouldn't need specific individuals, and the loss of those individuals should not be a threat. Where the courts back the companies up is where the leaver takes with them a huge list of contacts that were developed using the prior employer's resources and services, or where the leaver takes with them a knowledge of the industry that is significantly ahead of it's time because the company they joined gave it to them - then an exclusion clause for that specific area will be enforced. Of course it can only be enforced for a few months because technology moves on, and it can only be enforced over very specific and narrowly-defined areas otherwise it's not considered fair.
Writing clauses like this for key personnel is very difficult and it is done for two reasons. Firstly and most usually, they are to scare people into staying. Secondly and more rarely, they are there to protect what is seen as an "excellence in thinking" in a specific area of expertise. For example, the head of technology development for Oracle probably has some clauses about working on web-enabled enterprise database delivery systems or some such junk because Oracle will have stuff in pre-patent conceptual phases of development that they want to protect, that is insufficiently defined to be awarded a patent or copyright.
Re:from a lawyers prospective... (Score:2)
From the point of view of contract law, "sign or be fired" is an offer of valuable consideration (continued employment) in exchange for valuable consideration to the other party (non-competition with them). For duress to exist, the threatened action must be *unlawful* (and the threat is called extortion). Since termination is perfectly lawful -- in lieu of preexisting contract to the contrary -- there is no case for duress.
In fact, by arguing how badly you need continued employment, and how badly you would be hurt by losing it, you are strengthening the employer's case for its value, and thus for the enforceability of the contract.
Re:My 2 pence (Score:2)
Most jurisdictions have laws that, contract or not, nobody can prevent you from performing your trade.
Better hope you never need to set foot outside that jurisdiction for the rest of your life. What if the jilted employer, through a front, runs a sweepstakes or other prize contest and your family "wins" an all-expenses-paid vacation to such a country? When you step off the airplane/ship for your vacation, you get sued for breach of contract and tossed in jail? Kinda takes the "un" out of "unenforceable", doesn't it? Also consider the fact that the "vacation" would be probably an order of magnitude cheaper that suing you in local courts.
And what if the local law changes tomorrow? The contract could suddenly become enforceable, and you are screwed.
My personal rule is to *never* agree to a contract I don't intend to honor. If they're gonna be sleazy, I at least want to make them work for it.
Re:My 2 pence (Score:2)
IANAL, but I never believed this would never hold up in court, because McDonald's could be considered a "potential" client if the contract house claimed they might "potentially" start farming out burger-flippers. Therefore the clause really said that I couldn't hold a job of any sort for that time period.
So, I signed the contracts, went about my merry way, changed jobs at will, and never heard anything from anybody. The real intent behind the clause was to a) keep me from being hired by the client I worked for, and b) keep me from changing contract houses while working for the same client.
Sidebar: Eventually I was hired by a client, because the client's contract with the consulting firm had a buyout clause in it. Regardless of what your contract says, make sure you know what's in the client's contract! It can often work to your advantage.
Let us remember other fun parts of the contracts (Score:2)
"All inventions which I conceive or develop during my employment, whether alone or jointly with others ans whether during my working hours or otherwise, whic relates to the business or interests of Company or any business or other company in which Company has an interest sall be Company's exclusive property".
On the other hand, I worked for SAC/STRATCOM. Their policy was much simpler: "If you plan on leaving the country in the next five years or you meet someone you find out is from any foriegn country, let us know. We'll want to interview you."
-----
Move (Score:2)
Re:Don't do it. (Score:4)
In the past, I've been made an offer from a company and accepted. Then on my first day they hand me this form to sign, and if I don't sign it they will let me go. At that point my options are limited.
I've also been in a situation where my company came up with a new non-compete and said "we're not holding a gun to your head, but if you don't sign this we won't be employing you anymore.". Again, not much choice.
The only defense is, upon receiving an offer, to ask for a copy of the employment agreement. Then use that to negotiate or base your decision to work. Don't let them spring it on you once you've already burned your bridges.
Ralph
Why not terminate the contract with the nc clause? (Score:2)
Re:from a lawyers prospective... (Score:2)
From the point of view of contract law, "sign or be fired" is an offer of valuable consideration (continued employment) in exchange for valuable consideration to the other party (non-competition with them).
Bzzzt, sorry. Unless the non-compete guarantees your employment for a specified period of time, there is no consideration. Sign or be fired is not consideration, because you could sign the contract and then still be fired, unless the contract specifically guarantees your employment.
My idea of fair compensation... (Score:2)
Oh yeah, IANAL, so use this advice at your own peril.
What's the core (Score:2)
He joined Crossgain (a startup) in September because "he saw it as a key player in the next generation of Internet computing"
He's contract with Micro$oft contained noncompete restrictions valid for 1 year.
Crossgain is a startup that aims to "create a service that runs a company's big software programs over the Web" (in competition with "we know who").
Besides him also a couple of ex-Micro$ofties went to Crossgain.
Micro$oft sued the guy ( and the other Micro$ofties ) and they had to fire themselfs from Crossgain.
He and a couple of his collegues tried to pull a fast one and failed - so what!!!
Disclaimer: Even though this involves Micro$oft, which is the devil incarnated, i am refraining myself from being parcial against MS.
Is non-compete even legal? (Score:2)
I don't think non-compete could hold up in court...isn't it a violation of your right to the pursuit of happiness?
--
Re:Is non-compete even legal? (Score:2)
--
Don't agree to a blanket non-compete (Score:2)
The only compensation that would be worth signing for would be if you were going to get paid over 100% of your salary for the entire length of the time you couldn't compete.
In this industry we are often asked to sign confidentiality agreements, which are entirely different. We simply cannot divulge another companies secrets. That makes sense. But agreeing to not compete in the computer industry is ridiculous. Usually it's common in other industries because they are customer oriented (ie. most banks and insurance companies offer pretty much the same services, it's mainly a game of getting the customer base) and they don't want one person walking away with the customer base because they know the customers well.
So let's do ourselves a big collective favor and refuse to sign any non-compete agreements!
Re:Don't agree to a blanket non-compete (Score:2)
That's just not true. Your employment is at will if you have no other contract backing it up, which means that you can leave at any time without any obligation, and they can let you go at any time without any reason (so long as they aren't breaking a law by discriminating against you) or obligation (other than what is provider for by law, such as COBRA in the US).
But you cannot be held to any non-compete agreement which you did not explicitly agree to. The only exception would be giving away trade secrets, which you can often be prevented from doing even if you don't work for a company.
Re:Good Luck (Score:2)
Fortunately, they are extremely hard to enforce (which is what every HR person says), but at the same time, if they are so hard to enforce, why bother with them.
Because if you "win the lottary" with your new start-up company that starts kicking your old company's ass in the market, they can go after you with lawyers. Most people, I bet, will never be negatively affected by a NCA; only the most valuable and/or entraprenurial (sp?) employees. That doesn't mean NCAs are morally good (I think there is a good argument that they limit innovation and technical progress) but they might help protect a company from shareholder wrath.
Re:And don't provide "salary history" on resumes. (Score:3)
Interviewer: "How much were you making at your previous position?"
The Truth: "I am making ten bucks an hour changing back-up tapes while reading the K&R book and surfing Slashdot, but I think I can figure out how to do the job and should get paid $105 thousand per year for it."
What You Tell Them: "I'm looking for something in the range of $115 thousand per year, but I might be willing to accept slightly less. I've been doing a lot of training beyond the required skill-set of my current job, and I am ready to move up."
Re:And don't provide "salary history" on resumes. (Score:4)
If you are making $35K per year, and applying for a job that pays $105K per year... tell them that your last job payed $98K per year. There's really no easy way for them to check on it, and probably wouldn't bother if there was.
Worst case, they find out and fire you... in which case, you can now honestly go to other employers and say "my last job payed $105K per year."
Abuse of the system (Score:5)
my reaction is not printable in a family oriented medium.
There's a saying in techdom about Microsoft: Don't moon the giant. Crossgain mooned Microsoft every which way. First, the ex-Microsofties poached some of their former colleagues to join them at the startup. Then they raised $10 million from investors, including The Barksdale Group, a venture firm run by Microsoft's chief nemesis at the antitrust trial, former Netscape Communications Corp. (AOL) CEO James Barksdale. A few months later, Crossgain named Mitchell Kertzman, an outspoken critic of Microsoft's business practices, a director. Kertzman is CEO of Liberate Technologies (LBRT), an interactive-TV software maker that competes fiercely with Microsoft interactive-TV technology
The last straw was Crossgain's decision to base its technology on non-Microsoft software. Instead of using such Microsoft products as the Windows 2000 operating system and SQL Server 2000 database package to develop its service, Crossgain opted for software made by rivals. ''It doesn't look very good for Microsoft if a company run by its former vice-president of developer relations is using software made by Oracle,'' says a former Microsoft executive.
With a potential lawsuit looming, Microsoft offered a deal, according to Crossgain and Microsoft. If Crossgain committed to building its service with Microsoft products, the company wouldn't pursue the noncompete claims. Crossgain sources say Microsoft specifically wanted to preclude the company from using Oracle database software. Microsoft sources deny that. Switching to Microsoft technologies meant huge delays and the loss of months of work for Crossgain, which hopes to launch its first service in March. But the deal also meant avoiding months, or perhaps years, of litigation with one of the wealthiest companies in the world. Crossgain execs thought they could win the litigation, but the time and expense to do it would be a huge drain.
The system is obviously open to abuse, and I am going to have to think long and hard on how best to sort this out.
Out of sight, out of mind... (Score:5)
How did I accomplish this remarkable feat? I reasoned thus: Essentially all non-compete agreements are worded in ways that are grossly unfair to the employee. Accepting the agreement a company puts under your nose as written is roughly equivalent to accepting the first price quoted to you by a street merchant in a middle-east bazaar.
Further, I reasoned, lawyers are like ferrets; they have short attention spans and more teeth than is strictly necessary. So I refused the agreement based upon a few clauses I found objectionable (it's not hard to find something to bitch about in one of these documents). The company sent the thing to their lawyer to have him review it in light of the objections I had made. He made some changes. I found more things to whinge about in the new document. I sent it back.
We played this game for about two weeks until (as ferrets will) he wandered off and found a new toy to chew on.
Problem solved.
--
Re:Is non-compete even legal? (Score:2)
Overly broad non-compete agreements have been struck down. Those with sufficient limitations (generally time and/or area) on what they affect have been upheld. "Pursuit of happiness" has nothing to do with either case or American law in general, given that that's a phrase taken from a declaration of war, not our Constitution.
Re:Is non-compete even legal? (Score:2)
No Compete Not Legal in Some States (Score:3)
Re:Good Luck (Score:2)
If someone can easily kick your front door down, why bother with locking it at all? It's simply a deterrent more than a strictly enforcable contract.
--
Worst Non-Compete in the world: The US Army (Score:5)
And I can't even leave the Army whenever I choose. They said that if I was "absent without leave," the MP's might shoot me on sight.
From all the books I've read about getting ahead in your job, it seems the best way to advance is to hop from job to job every five years. Now, how am I supposed to do that? Private Phil McCrakkin [ridiculopathy.com]
Signing Contracts = Money (Score:2)
"Me Ted"
Comment removed (Score:2)
Comment removed (Score:2)
Comment removed (Score:2)
Comment removed (Score:2)
Turnabout (Score:5)
Next time they try to get you to sign a non-compete clause, whip out one of your own for them to sign that says they will not hire anyone who does what you do for 12 months after you leave...
--Blair
Don't do it. (Score:2)
from a lawyers prospective... (Score:5)
This is a very important issue that many technology professionals get caught up in. Kids out of college are most harmed by a non-compete waiver that most companies will impose (at their discretion).
People should be very aware that these contracts are indeed legal, and binding. They will hold up in court and I've seen it happen.
One story I have is of a guy who had been working at a tech firm for a year when a VP invited him into his office. The VP passed a document over the desk, casually, and said that he would need it returned within a day. Of course, the document was a non-compete waiver that the company was instigating. In it was provisioned that this man, should he leave his current job, could not compete directly/indirectly with his current company, and could not use knowledge that he gained at the company for 2 years. He was told, that if he did not sign the waiver, he would be fired. The sad thing is that this is perfectly legal for a company to do. It's very important for people to ask about non-competes when they first jump into a job, because it may turn up and bite them in the arse at any time.
Also, I have strong advice for young techies to be careful about signing these things. You could very easily be locked into your job permanently.
Better advice, is to find a friend or relative that is a lawyer and have them take a look at any waivers before you sign on the line.