Non-Compete Agreement Beyond Term of Employment? 778
stellar7 writes "I work in IT for a large company. They have recently asked me to sign a new non-compete and confidentiality agreement. I signed an agreement when I began employment, but now they want me to sign an updated one. Behind the link are a few paragraphs from the new agreement. It states that the company has a royalty-free license to any 'Invention' I create including up to six months after leaving (and the company fully owns any Invention that relates to the company in this same period). Has anyone signed a similar agreement that reaches beyond the end of employment and includes things not related to the business?"
A. Employee shall promptly and fully disclose in writing to [Company] any inventions, improvements, discoveries, operating techniques, or "know-how", whether patentable or not (hereinafter referred to as "Inventions"), conceived or discovered by Employee, either solely or jointly with others, during the course of Employee's employment with [Company], or within six (6) months thereafter.
B. Employee shall, on the request of [Company], and hereby does, assign to [Company] all of Employee's right, title and interest in any of the Inventions which relate to, or are useful in connection with, any aspect of the business of [Company], as carried on or contemplated at the time the Invention is made, whether or not Employee's duties are directly related thereto. [Company] shall be the sole and absolute owner of any of the Inventions so assigned. Employee shall perform any further acts or execute any papers, at the expense of [Company], which it may consider necessary to secure for [Company] or its successors or assigns any and all rights relating to the Inventions, including patents in the United States and foreign countries.
C. [Company] shall be the sole judge as to whether the Inventions are related to or useful in connection with any aspect of the business of [Company] as earned on or contemplated at the time the Invention is made and as to whether patent applications should be filed in the United States or in foreign countries.
D. [Company] shall have the option of taking a permanent, royalty-free license to manufacture, use, and sell any of the Inventions conceived or discovered by Employee during the course of Employee's employment with [Company], or within six (6) months thereafter, that are not assigned to [Company] under paragraph B. of this Agreement.
ask a lawyer (Score:5, Insightful)
What's the legality of contracts, exactly? (Score:2, Insightful)
Take it home. (Score:5, Insightful)
Cross out the parts you think are ridiculous.
Sign it.
Return it.
What do you get in return? (Score:4, Insightful)
Ask if you'll be fired if you don't sign it. That'd be interesting, too. Contracts made under duress are also not binding.
I would say that I'm not a lawyer, but I'm not a fucking lawyer and so I don't have to put stupid legalese into my posts!
Things to try (Score:3, Insightful)
You could modify the agreement by striking out the "or within six months thereafter" clauses and sign it. There's a chance that it'll be sent only to a paper-stamper who is responsible for checking signatures off a list, and he might not see your modification. Of course it's more likely your boss is on the hook for collecting signatures, and he'll note your changes. You could try convincing him that the agreement is unfair, and that your changes are just.
You could try ignoring it. See if they follow through on their threats.
You could talk to your coworkers and organize yourselves to collectively say "we're not signing this." If an entire group said "no" you'd scare the crap out of management. Of course you'd likely all be labeled "troublemakers" or "union organizers" and be lined up for rapid replacement.
Or you could shut up and sign it. Unless you've got another job in your back pocket, the market's kind of thin these days.
Depends where you live (Score:5, Insightful)
Just say no. (Score:2, Insightful)
The idea that this kind of control over IP can extend beyond the scope of employment is, unfortunately, fairly typical. I think it's worth trying to fight. I haven't heard about trying to extend beyond the duration of employment, too -- that's just absurd.
Maybe it's possible to ask for increased compensation -- say an extra six months -- in exchange? If they really think that the intellectual property you'll create is worth it, that seems to be a first attempt at fairness.
In any case, in IT, are you really in the position to be creating that much intellectual property? Lots of companies are trying to shove agreements like this down employee's throats, without thinking about the consequences. Unfortunately, most people just sign blindly.
It's a bit overused, but might this be reflective of the atmosphere of American consumerism? Nobody wants to create content anymore... we'd like to just consume media. I hate to say it, but I think this all comes full circle into the file sharing debate:
People today don't sufficiently value intellectual property.
This leads to the problem with pirating electronic media, but also seems to lead to the situation where people don't stand up and refuse restrictive employment contracts like this one.
--
Educational microcontroller kits for the digital generation. [nerdkits.com]
Re:What do you get in return? (Score:3, Insightful)
Sign it if they pay up. (Score:3, Insightful)
Since you didn't agree to this new contract when you were hired, you should have your pay adjusted accordingly.
Re:ask a lawyer (Score:1, Insightful)
Personally, I'd invite the company droog in question to shove something sharp and unpleasant into whichever part of their anatomy would cause them the most discomfort, and then work somewhere civilised.
Re:What do you get in return? (Score:2, Insightful)
Re:Take it home. (Score:5, Insightful)
Sign it.
Last I knew all that achieved was voiding the entire contract unless they initialed all the parts you crossed out. And I assume the old one would still be binding in that case.
Re:What do you get in return? (Score:5, Insightful)
Re:Sure (Score:1, Insightful)
it's always the employee's with everything to lose and nothing to gain that have these ideas, but don't tell their employer because they won't be rewarded for sticking their neck out and leaving and going it alone runs the risk of being sued, but also means they don't have the backing of an established company to get the idea off the ground.
profit sharing is the way of the future, just as the CEO gets a bonus when shares reach a certain level, so should employee's if big business ever wants their workers to take their shareholders seriously.
i get a production bonus in my job, which is set at REASONABLE levels. i can make up to an extra $1000 a month through this, but the average is around $500. it makes everyone i work with take the companys productivity more seriously.
Re:ask a lawyer (Score:3, Insightful)
I wouldn't sign such an agreement with anyone, personally. Money is too easy to find to justify indenturing yourself in such a way just for a job.
You can't force a free mind (Score:5, Insightful)
First of all, the law is not nearly as clear-cut as geeky programmer types think it is. As a rule, the law is roughly speaking some mash-up of what the legislature wrote, what the judge thinks ought to be so, and what a jury of random folks majoring in theater and journalism at the local community college think it ought to be. Hence a good lawyer is probably not going to be able to give you an precise and definitive answer on all your what-if scenarios. Instead, he'll probably agree with you on general grounds that the contract is evil, vicious, and you are a noble person dreadfully wronged blah blah (this is just advertising, an appeal to your vanity, so you won't forget him when you someday need a lawyer). If you press him on specifics, the most he's likely to do is tell you roughly how he would argue the case against the contract if he needed to, but he's unlikely to guarantee it will work.
Secondly, aside from satisfying your injured pride, what would be the result of asking a lawyer and setting yourself back $500 or so? Suppose the lawyer agrees it's a smelly contract, and a court might rule this or that aspect unenforceable, if push came to shove? What are you going to do with this information? Go to your boss and say Ha! All your base are belong us! and he's just going to say Curses! Foiled again! and tear up the NDA, maybe give you a raise for showing initiative and helpfully pointing out the folly of the company's ways? I mean, as opposed to marking you down as a pain in the ass who needs to be shitcanned at the first opportunity, like maybe right now? Your feelings would probably be more effectively soothed if you spent that $500 buying pretty girls drinks in a club.
Finally, if you just have enough mental discipline to keep your mouth shut when you need to, this doesn't matter anyway. Suppose you do have some kick-ass wonderful idea while you're working for this bunch, and you decide you want to take it elsewhere. All you need to do is not keep notes on your idea in your office (duh), not work on it using company computers and networks (duh), not talk boastfully about it around the water cooler -- this is the hard part -- and just generally keep your thoughts to yourself as long as you work there and for six months afterward. When your killer idea takes the world by storm it's going to be up to your former employers to prove in court that you had the idea eight months earlier, when you still worked for them. But without the evidence you've carefully avoided providing, they're screwed. They can't read your mind.
As for the ethics involved: anyone who gives you a contract like that to sign has made their lack of morals completely clear. You owe them no consideration in return whatsoever. Indeed, if you used them to pay your rent while secretly working out your brilliant idea at home, they'd have only gotten what they deserve.
Re:Take it home. (Score:5, Insightful)
Mission accomplished.
Yup. It's doable. Just be polite and reasonable. (Score:3, Insightful)
If he confirms that this is unenforcible, propagate that to the company and see what they have to say. If it's a company with multiple offices, they may in fact be asking to sign a paper drafted for another country. In which case they may back off and come up with a revised version. I've been through this and it does in fact work.
If the lawyer says it's an OK as per local laws, ask company for a list of exemptions. Basically put together a list of current projects you are "working on" and have them attach this list. Again, be reasonable, explain the situation, and there's a good chance they will agree. Moreover, you will be talking to HR about this, and HR will be talking to legal dept. on your behalf. So do your best to win HR over first.
The trick with an exemption list, which _typically_ works, is to (a) be vague with project description (b) avoid a code escrow
If they don't get a copy of your current code tree, they won't ever be able to prove your existing version is not the one you have listed on an exemption list (excluding stupid mistakes, obviously).
Again, I personally made this sort of an arrangement with a former employer, and I know a couple of other people who did the same with other employers. It's doable. Just be polite and reasonable.
Re:ask a lawyer (Score:5, Insightful)
I have had glimpses of financial deals between large (Fortune 50, yes, five zero, not five hundred) financial institutions. One contract ran 30 pages. The definitions for it ran almost 100 pages.
The point is, talk to a lawyer. It is worth the $300-$500 it will cost.
Re:Sure (Score:3, Insightful)
It says "invention" not "patent." Thus, it would apply to any patents granted later on said inventions even if it took 3 years to get that patent on the invention that you conceived within those 6 months.
Re:Sure (Score:3, Insightful)
Ok I agree with you but these companies should have a royalty program in place for its inventors. Otherwise there is simply no incentive to disclose inventions to the employer. I think IBM has a program like that. Any company that doesn't though is just ripping off its employees. If this guy's contract has a royalty provision then it might not be that bad really cause the company would pay for the patent process and if they do end up making a bunch of money off the invention then he gets a nice bonus. But like someone above said, we can't determine that without seeing the entire agreement.
My personal lawsuit experience with contracts (Score:4, Insightful)
Yeah, legal fees galore.
Look I recently dealt with a dickhead that screwed me out of ~$30k. And ~10 others out various amounts ranging from $10-$90k. We were all contractors. We all signed the same contracts. All of the contracts are mostly unenforceable.
But here is the deal, if your opponent is irrational and has lots of money
let me repeat that.
If your opponent is irrational and has lots of money
This guy was willing to play hundreds of thousands of dollars to make sure none of us collected a dime. He has a mental problem with admitting he is wrong. He would counter-sue for millions of dollars. Claims that were probably losers (you can never be 100% sure in litigation) but would have still cost $100k in attorney fees to defend. And it isn't just attorney fees it is your time. And in a profession where I bill by the hour, my time is my money.
The $90k guy and the $20k guy sued (separately) and all of us waited to see what happened. The suits settled for a waiver of claims and no money. Basically the $90k, and more so the $20k guy, decided it wasn't worth risking their house to win. Plus even if they won it would have cost more in attorney fees (especially for the $20k guy) then they would have won.
It is like in poker when you are forced to fold, despite your winning hand, because you don't have enough money to match the bet.
This dickhead had enough money to piss away a good deal of it on making everyone miserable.
If in the 6 year statute of limitations I win the lottery and can play on equal footing with him, I'll sue the bastard, but until then it isn't worth my trouble to be right.
But keep this in mind if one party is rational and the other isn't and has money to afford to be irrational, the irrational party wins.
If it is a big company they will either do (a) be rational, settle and walk away or (b) be irrational and fight forever because they have the money to do so.
Re:ask a lawyer (Score:5, Insightful)
I know of 3 people my last employer sued, but to be honest, they deserved to get sued. They went to work for highly visible competitors who had exactly the same type of product (and they were sales people, not developers). One even tried to take his client list with him. Bad idea.
Comment removed (Score:3, Insightful)
Re:ask a lawyer (Score:2, Insightful)
Re:I got one and didn't sign it. (Score:5, Insightful)
I had the same thing happen to me a few years back. I had an NDA/non-compete dropped on my desk by the HR manager and I looked at it and handed it back to her and said no. She said I had to sign it, required, firings, I looked back and said Okay and put it in my trash.
A few hours later my boss came over and asked why I didn't sign it. I explained my issues and after three rounds with legal, they came back with a very narrow agreement that I was willing to sign.
Later on, I was talking with some other employees and happened to mention what happened and they were all shocked.
Re:ask a lawyer (Score:3, Insightful)
Re:Take it home. (Score:3, Insightful)
Putting one over on "them" can be fun, but how can anyone trust you on other matters if you pull this sort of stunt?
If it's software, make sure it uses GPL code (Score:4, Insightful)
Re:ask a lawyer (Score:2, Insightful)
What is enforceable, however, is the company can choose to continue paying your wage for 3-6 months to have you to nothing and otherwise prevent you from working there. They can't just leave you out with no pay unable to work for a company, however
Re:I don't remember exactly which... (Score:1, Insightful)
Taking the whole codebase is of course a copyright violation and completely illegal (even if you wrote the whole thing yourself during your work there). I'm posting anonymously as this actually happened at the company I work for. A guy just rebadged the software and tried to sell it himself. The thing ended remarkably amicably with him being fired and ordered not to work in the industry (our market sector - not the whole of IT), in exchange for not being prosecuted.
I can see where companies are coming, but I think they should mostly rely on that fact that most of these situations that cause problems are already illegal acts - there's no need for the contract to mention them at all. We were all sent new contracts with further terms to guard against the situation. I just crossed out the over-broad terms before signing it.
Re:ask a lawyer (Score:3, Insightful)
Re:ask a lawyer (Score:2, Insightful)
Re:ask a lawyer (Score:3, Insightful)
Maybe people should just realize that "he" is the gender-neutral pronoun in English! All you dipshits butchering the language in the name of "political-correctness" can kiss my ass!
Re:I got one and didn't sign it. (Score:1, Insightful)
Re:ask a lawyer (Score:2, Insightful)
Re:ask a lawyer (Score:5, Insightful)
Require an additional clause added where they guarantee you 6 months severance pay should you leave the company for any reason while that agreement is still in effect.
Yes...refuse to sign. Or better - just ignore it. Put it off, defer them, 'will get around to it'...till they either forget or you find a new job.
New job...good call. On your exit interview point out that you're leaving because the company clearly has no interest in treating people fairly or even caring in the slightest bit about them.
Re:ask a lawyer (Score:2, Insightful)
Except any agreement enforced after you left would have to be enforced by the Government!
Enforcing non-compete agreements, and enforcing that the company owns a patent, and not you, are most certainly actions being made by the Government. Or to put it another way - if things were really as "free" as you say, then yes, the company is free to hire who they like, but the employee would be free to work for who they like as well as being free to use his inventions, and the employer could do nothing about it. What are they going to do, fire you?
Yes, people should be free to make whatever contracts they like, but in a free world, I do not expect the Government to enforce every kind of contract, when both parties no longer consent.
Re:ask a lawyer (Score:2, Insightful)
That vice versa is important. If any company put that argument to me, I'd bill them for the time I spend thinking about work matters outside of work.
if your work entails writing software to track stocks and then while at home you write a similar product, even if completely on your own free time with your own personal resources, etc. Don't you think your employer would have some greivance with you?
But that's not what we're talking about - that would clearly be a conflict of interest. No one is suggesting ripping off the company by reproducing the same thing outside of work, or making a competing product.
That isn't an argument for claiming ownership of all IP.
Re:I got one and didn't sign it. (Score:1, Insightful)
Yes, I've seen this happen.
Re:Sure (Score:3, Insightful)
Makes me glad I don't work in R&D. Most times, if I come up with something clever, I can deploy it, open source it, and take it with me to the next job. I don't have to worry about greedy management trying to steal it, because they're in no position to profit from it, except incidentally. I still have plenty of stress, but it's not that kind of stress.
Re:ask a lawyer (Score:3, Insightful)
I consider "he" gender-neutral as well, but it's still wrong (at least, in the US). According to the Oxford American Dictionary:
What really irks me, though, is when a woman takes offense to being called a "dude". :-p
for the last time litteral meanings don't mater. (Score:2, Insightful)
So it's one god damn word, the most basic pronoun in the English language, and I don't know about you, when I learned it, 20 some years ago, they told me it described someone with a penis. It's a pronoun to describe a male, that's how people understand it. If you disagree I'd advise you to go to a local strip club or red light, and refer to the 'working woman' by the male pronoun all night. Call her 'he'. Sometimes you might get lucky, but most of the time that should settle things.
Re:ask a lawyer (Score:5, Insightful)
This tends to change with a variety of factors. For instance, the employee handbook and internal company policy in most cases provide for severance pay and restricts the ability to let you go except for certain reasons. This hand book or internal company policy is viewed as a contract by most all courts and would supersede the states requirements if they are less. Of course they usually place something in the handbook that included insubordination or something that lets them dismiss you without an actual cause. That's where unemployment kicks in.
Now unemployment can be contested for any reason but, they have to have a reason to fire you. I'm in Ohio where you don't necessarily get unemployment if they had reason to fire you. It has to be a good reason too. They can fight it all they want but at most, they will only delay when you receive the unemployment if they don't have a substantial reason to fire you. The employer sometimes thinks that you will get another job and forget about it and they won't have it effect their premiums. But you can still fight their claims after you start working another job in most cases. There are around five states that you have to have cause for to fire someone and their laws are generally different including the right to sue for wrongful termination. Each state has a labor board that can levy fines on most employers with more then 15 employees according to practices that are either against the state law or employee handbook. For some reasons, they don't tall you that in school when they train you to become an employee somewhere.
While technically true, it is wrong to some degree. Even in Massachusetts, contract law is just that. You might not have a job at company X because of the At-Will status but that doesn't mean you don't have recourse. Of course then you are back to finding who either thinks your case is worth something to take it on commission or one who will take your money up front. Some of the stuff can be taken care of by you too. I have a cousin who lives in Mass. She took 4 weeks off to have a baby and after returning to work, they wouldn't give her position back because the person who filled in did a better job. So she had to take another position that required more physical labor and they fired her two months later for no reason after writing her up for not doing the job in a timely manor. It was true that she didn't get her job back but she took it to court and got back pay from the time they let her go up until the time she received her first paycheck from her new job and attorney's fees. She didn't really look hard for a new job because she was taking care of the kid so it was about a year or so that she had been paid.
Now you might think it has something to do with the family medical leave act but the reality is that the only thing related to that was she had a doctors slip limiting her lifting and repetitive motion for 2 or three weeks after she went back to work.
The bottom line is there is more recourse then people think. They are often discouraged in taking some of that recourse because of funding or they just don't know about it or it becomes a hassle or they have already moved on or what ever.
Re:ask a lawyer (Score:3, Insightful)
To be gender neutral you can't just assume they're male. And any woman who is willing to endure the sexism and bullish male majority online deserves plenty of respect.
[Credentials: B.A. in Linguistics]
Wise Move (Score:3, Insightful)
Well, the fact of the matter is you'll never know what is enforceable or not until you pay some lawyer $10,000.00 for the privilege of arguing it in front of a judge, and even then, you never know what will happen on any given day in court. The judge could enforce the agreement (you did, after all, sign it), he could modify it so it conforms with state law (well, you intended to agree to this, but it doesn't quite conform to state law, so here I'll modify it for you so it conforms... you're still on the hook for some, but not all, of what you agreed to), or he could toss it outright.
But you never know what is going to happen, and especially if you get some compensation in return for signing the agreement, you should NOT count on a judge simply tossing it. Judges hate to give a party something for nothing, and if the judge gets it in his head that you signed the agreement with your fingers crossed (under the impression that the judge will someday invalidate the agreement), the judge will not be amused.
So you did the right thing consulting a lawyer. Good luck with whatever you decide to do!
it may be ok to sign BS (Score:3, Insightful)
First off, I believe such a clause is unreasonable.
IANAL, so check carefully first. But I wonder about signing anyway, knowing that the objectionable clauses are unenforceable, and then doing as you please. They do try to put such crap in there. "Yes I will hand over any invention I make for up to 6 months after this job ends", and then the instant it ends, you don't. They can't stop you. You may not even invent something related to their business in the time frame, so the whole issue may be moot. If you do invent something, you may be able to wait out the 6 months. And they may not even find out. If they find out and it hasn't been 6 months, they may do nothing. If they do something, it may be nothing more than empty threats, trying to scare something out of you, as they may know they have no ground to stand on. If they are deluded and actually follow through on threats to sue, then I don't know what will happen-- get thrown out of court right away? Lose horribly? Or, could they actually win?
But, much better to refuse to sign. Don't want a reputation as someone who break contracts no matter how unconscionable. Really, be ready to walk. Demand the contract be changed, and if they refuse, walk. That should always be an option in such negotiations, and the other side has to know it is an option. Also they should know that's not a bluff, but that's harder. Some people are pretty pig-headed about that-- can't be convinced it's real and not a bluff until the trigger is pulled. (There are businesses that feel such "ability" is undesirable in their employees, and will then not want you around just for that. Some get really hung up on that "soft skill". Run, don't walk, away from those sorts.) But that this "should I sign" question is being asked at all suggests a difficult position-- you can't walk. This is also bad in other ways. The fact that you didn't immediately reject it might suggest to them that they can ride you hard, lean on you, walk all over you, and so it may be only a matter of time before another, worse demand is pushed.
Myself, I tend to not like to even negotiate with a business that tries such crap, and am likely to walk right there depending on if I feel this is the way they do business, or this is just a rare stupid mistake on their part and they aren't normally like that. If it is the way they are, then they'll keep right on pushing, trying to slip something in, and you've always got to watch your back. I want to concentrate on technical problems, not sweat over how my employer is trying to cheat me this month and whether I missed it and am about to be taken, and I will just walk in that case. Bad enough wrestling with credit card companies, phone companies, cable companies, ISPs, health insurance providers, and such ilk. Sure don't need any more worries. It's not much of a job if there's no trust, and the relationship is adversarial.
Re:ask a lawyer (Score:2, Insightful)