Non-compete contracts (from the insider)

[Bert Mitton]

Legalities aside, it kinda defeats the purpose of being an intern.

[Ian Shlasko]

I've found that clause to be pretty common in this industry... And I wouldn't sign it if it was phrased like that... One that I did sign, though, basically asserted company ownership of anything I do using company resources (Equipment, offices, etc) and anything I do on my own time that's, in layman's terms, is stuff I would normally be doing at work. (While working for that employer, of course) So if I wrote a trading system at home, the company could claim ownership... If I wrote a computer game, or a word processor, or a novel (case in point), they'd have no claim at all, even if I profited off of it. Given appropriate compensation, I think that's pretty fair.

Proud to have finally moved to the A-Ark. Which one are you in?
Author of the Guardians Saga (Sci-Fi/Fantasy novels)

[Steve Maier]

The only time I could see that doing something in your off hours would possibly be the companies is if you actually used their resources to do it. At work (many years ago), people ran other businesses from their office taking phone calls and doing work on their company machine. For us developers, I have known others (not where I work today) to take any and all software home and say they can do that and it is not the company's IP. Getting tools or free compilers to do things at home is simple enough that nobody should do this. But if the company paided for the compiler, I think that have a right to what it makes.

Steve Maier

[keyboard warrior]

I do not work where they have non-compete contracts. It is at the same cruddy bottom as "unpaid internships".

"Incorrectly attributing quotes to revered historical figures is the work of fools and gerrymanderers; but hey, that's the internet for you." -- Thomas Jefferson

[Steve Maier]

One non-compete that I know of was a friend of mine that sold his company for millions. They wanted him to know startup a new company doing the same thing and stealing all of their customers. It was only for 2 years, so he took his money, did a couple other businesses , and then when ithe non-compete expired, he contacted all of the old customers and took 80% away because they were not happy with their service for the last couple of years and knew him.

Steve Maier

[Ian Shlasko]

I seriously doubt that's enforceable... You can't prevent someone from using gained knowledge... In the financial industry, particularly with traders or salesmen, you have what's known as "Garden Leave." After you've given notice or been laid-off, you spend the next 30, 60, or 90 days on garden leave before you can start another job. During that time, you're being paid your full salary (But usually no commission or bonus), but not actually working. Depending on the job, they might make you come into the office every day, but usually you're just paid to stay home. The trick is that when you're working for a trading desk, you generally know, or have a good idea of, the group's portfolio positions (Which stocks/bonds/contracts they own), so the garden leave ensures that your inside knowledge is at least X days out-of-date. That way, you can't go to a competitor and say "Well, I know they own X, Y, and Z, so let's drive down the price on those securities". It also gives them time to let all of their contacts know that you're no longer with them... Brokers, clients, other traders, etc. EDIT: As a programmer, though, I haven't been subject to this yet... Though I know of two other programmers (former coworkers) that were stuck with a clause like this.

Proud to have finally moved to the A-Ark. Which one are you in?
Author of the Guardians Saga (Sci-Fi/Fantasy novels)

[BobJanova]

They're not enforceable under EU law, and I hear the US/Canada/Australia/etc are similar, so I'd normally sign it and ignore it (at least from a legal perspective, I respect the spirit of the clause).

[Paul Conrad]

Marc Clifton wrote:

Another one that used to be common (but appears less so here in the States nowadays) is the "anything you do or discover off company hours is the property of the company."

I remember seeing that from time to time and that was an automatic deal killer with me. What I do on my own time belongs to me and no one else. ;P

"The clue train passed his station without stopping." - John Simmons / outlaw programmer "Real programmers just throw a bunch of 1s and 0s at the computer to see what sticks" - Pete O'Hanlon "Not only do you continue to babble nonsense, you can't even correctly remember the nonsense you babbled just minutes ago." - Rob Graham

[Henry Minute]

When I left my last place they made me sign a no re-sign contract.

Henry Minute Do not read medical books! You could die of a misprint. - Mark Twain Girl: (staring) "Why do you need an icy cucumber?" “I want to report a fraud. The government is lying to us all.” I wouldn't let CG touch my Abacus! When you're wrestling a gorilla, you don't stop when you're tired, you stop when the gorilla is.

[Rick York]

There was a recent court decision in California that said the language in most non-compete clauses is unenforcable. I sent a link about the decision to the HR person of the company I was working for at the time and, of course, they said and did nothing.

[lewax00]

I haven't had anything similar at either of my internships. Although at my first I had to give them the right to wipe my cell phone remotely if they had reason to believe I was using it to spread company secrets. But they were a defense contractor, so it made some sense (although I did work in the branch of their company that wasn't defense related...).

[Lost User]

I have one in my contract. It lists 100+ companies and lasts for nine months after I leave which when combined with a three month notice period effectively puts me out of the market for a year

[Peter Mulholland]

And you still got out? :-D

Pete

[JChrisCompton]

Roy from Detroit wrote: My understanding is that in the US, you cannot sign away your ability to use your skills and experience to make a living. There are a few rare exceptions for national security reasons, but more or less, it is impossible sue (and win) an employee just because he went to work for a competitor. That depends, IANAL - but I did retain a employment lawyer about this. What you said is true IF you are an employee, the courts won't enforce a contract that will keep you from making a living. That's the safety on the gun... protecting the "innocent" employee. HOWEVER, if you are a non-W2 contractor then the court assumes that you have retained your own lawyer (or should have) and knew precisely what you were signing and will enforce it. YMMV based on your state/disctrict/judge. In the sticks it would be laughed out of court, but don't count on it being thrown out in a metro area. -edit1- Also, they are only enforcable if signed (1) as a condition of employment or (2) as a condition of a promotion or (3) if they give you significant compensation. FWIW, -Chris C. -edit2- P.S. Notice that I left out contractors who were W2 employees of the contracting firm - that's when it varies wildly and depends a lot on the specific judge and how good each lawyer is.

[JChrisCompton]

The shorter and more specific the restriction the more likely they could enforce it legally. Note here that it is only specific companies, which makes "1 year" reasonable. If it said any company in the ___ sector then a year might be unreasonable - it always depends on the wording + how good your lawyer is :-) Again, IANAL -Chris C.

[Bruce Patin]

It wasn't legal to begin with, which is why he let you not sign it. I went through this once, and just never signed it and they didn't notice. Later, the lawyers said that it was not enforceable.

[SeattleC]

I actually consulted a lawyer before signing a non-compete contract once that I found to be heinous. Here's what I learned. For ordinary software engineers, the terms of a non-compete are generally non-enforceable in the United States. A company cannot prevent you from using workaday knowledge in your next job, even if it was knowledge or experience you acquired working on their proprietary code. Many software folks in their 50s may remember having to sign a 36 page(!) non-disclosure/non-compete contract to view the AT&T Unix sources. This doc was certainly formidable, but in the end it was a waste of time. Non-competes are most likely to be enforceable on sales folk, who are the actual face of their former company to customers, and to director-level executives, who have highly sensitive strategic knowledge. Even for these folks, the litigation is not a slam-dunk, and frequently the hiring company will foot the bill for finding out. All that being said, it is always possible for your former employer to sue you. Even if they don't have a case, the suit can be a tremendous pain to litigate. It's going to come down to just how heinous your behavior was at work, and how much of a jerk your boss was. It is apparently the custom to write known-unenforceable clauses into legal contracts because they deter the hapless victim from going against the wishes of the company, no matter how unenforceable they are. The victim only discovers they are unenforceable by contacting a lawyer, a big step for most little people. It's an inexpensive legal trick for the company. It is also a litmus test for how the company treats its employees; a signal you can get before you come to work.

[Ed Attfield]

About ten years ago, my employer asked us all to sign something that promised we would seek permission for moonlighting at a second job and permission for where our spouses wanted to work. I said the first part was OK but the spousal part was not going to happen. I could not legally be asked to contract on behalf of someone else. In addition, it wanted us to promise that we would never say anything bad about the company to anyone. I said that as a licensed professional engineer there was legislation that required me to rat the company out for things like an oil spill, so I said I absolutely could not sign it. I wasn't asked again ...

[smcnulty2000]

I read the "enslaving your interns" link. Not enforceable. The intern was screwed by not knowing his rights, not by signing the non-compete agreement. If the scope of the non-compete is wide enough or long enough, it isn't enforceable and hasn't been since the 80's or 90s. They are trying to prevent him from earning a living and forcing him to work for them exclusively. As someone pointed out; "Restraint of Trade". I do know of a fellow who got sued by his former company when he went to work somewhere else as a sysadmin. I heard his story, told him; "It's not enforceable, just get a lawyer and countersue. If they aren't idiots they'll back down". Oddly, he did that thing and got enough money out of them to not have to worry about work for the next five years. Lucky for him since he wasn't a very competent sysadmin. Last I heard of him he was vacationing in Cape Cod before his next job. As I recall, the company that was suing him; their lawyer tried desperately to talk their CEO out of proceeding with it but he would have none of it. Bull-headed he proceeded.

_____________________________ Give a man a mug, he drinks for a day. Teach a man to mug... The difference between an ostrich and the average voter is where they stick their heads.

[YSLGuru]

Marc Your example of the "Serfdom Ownership Model" was common amongst the corporate world. Smaller independent shops might have had something similar but it was primarily because they were following the lead of the bigger corporate competitors. Both the “Non-Compete” and “We Own Anything you Do” agreements are for all intense and purpose intimidation tactics used to intimidate employees from trying to leave and go to work for a competitor, more often than not for a higher wage and or better benefits. These are simply the result of the current pro-corporate model used in the world today where the supposed desired goal of all workers is to work for the betterment of a corporation and its bottom line/stockholders and not to simply work to better the world as a whole. I don’t recall the exact details of the study although I’m sure you can find it on the internet, but a recent study found that even during good economic periods a sizeable percentage of corporate workers fear for losing their job. This fear is a plus for the corporation as it helps promote higher output from workers and discourages many from seeking wage improvements. It was a very revealing study to say the least. About the Modern Day Pro-Corporation Mentality.. In the early post-revolutionary war era, before forced public education, corporations were not allowed to operate in America without a charter which was only granted if a corporation could prove it would be providing a public service (i.e. building of roads and or canals) and even then the charter was only fir a fixed time period at which point the corporation had to once again prove it would continue to provide a public service else its charter was not6 renewed. These charters could also be revoked for violation of laws; something we today would find shocking considering how powerful the corporate world is today. Most Americans are unaware that such restrictions on corporations existed in the early years of our Republic. Perhaps your history class in public school taught this but the school I attended (19080s) did not. Slowly, the wealthy barons of the world moved to change this first by paying off politicians to get rid of the expiration date of corporate charters and to also remove the requirements that a corporation had to prove it would benefit society. I believe it was John D Rockefeller whom was instrumental in getting politicians to eliminate these restrictions on corporations. He did not want to have to prove his corporation would provide any kind of ben