
Why I Don't Sign Non-Competes - djsumdog
https://penguindreams.org/blog/why-i-dont-sign-non-competes/
======
doctorbigtime
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-c...](https://www.natlawreview.com/article/employer-s-waiver-non-compete-
period-order-to-avoid-1-million-payment-held)

~~~
rmc
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_ "

------
tomohawk
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.

~~~
lmkg
(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.

~~~
ethbro
Unethical?

It seems ethically equal to a company using their bargaining position to
advantage themselves and disadvantage their prospective employees.

~~~
nordsieck
> 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).

~~~
ethbro
Please don't make assumptions.

Whatever the current market conditions are is irrelevant. They were different
10 years ago, they'll be different in another 10 years.

I was responding to the parent's claim that social engineering around signing
non-compete clauses is unethical.

I consider trying to pressure an employee to sign such a clause unethical.

Maybe you feel differently.

------
joezydeco
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?

~~~
stupidcar
Holy shit. That is way, WAY crazier than a non-compete. That is saying you
can't work _at all_ for a year after your employment terminates, because
_anything_ you produce during that time is presumed to have actually been
created during your previous employment, and so belongs to your ex-employer.
Even if you go and work for a non-competing company in a completely different
field, and invent something totally unrelated to your ex-employer's business,
then it supposedly belongs to your ex-employer. Since no new employer could
accept that situation, it essentially prevents you from working.

I'm sure that can't be enforceable at all, but it's still completely sickening
that a company would put something like that in its terms.

~~~
biztos
In Germany that clause would mean they'd have to pay you your full salary for
as long as they prevented you from working for someone else. So it'd be a one-
year vacation whenever your employment ended, but probably not much use for
your career.

~~~
amelius
That sounds very reasonable. And to take it a step further, if they want
possession of ideas you have in your spare time, then they should pay for your
spare time too! :)

~~~
jdbernard
Well, that's the basic idea behind being salaried. Theoretically you are not
being paid for 40-hours a week, you're being paid for your productive output
regardless of the time.

~~~
amelius
What if you work part-time? And spend your spare time on a side-project? Will
they pay for it?

------
ideonexus
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.

~~~
twblalock
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.

------
Doches
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
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.

------
YogeeKnows
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
> 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.

~~~
YogeeKnows
I have seen people bring in Portable Hard disks and copy the code. Lets say
you have developed a utility messenger bot which alerts you every time SLA of
your support ticket is about to be crossed. A developer would like to keep
this 'completed+working' code with them to reuse in next projects.

One of my employees left the company and he took all the Unity assets
(assetstore.unity3d.com) I had purchased. I realized this when I saw those
assets being used in "his" newly released game on Appstore.

~~~
Bartweiss
> _I had purchased_

These strike me as the likely cases, yeah. Taking company-specific software
seems like it's either useless (why would I even want some random inventory
management system?) or spectacularly illegal, like taking a stock trading
algorithm.

But I can imagine someone wanting random quality-of-life tools, though
honestly just _asking_ for those would probably suffice. And people certainly
take expensive proprietary assets and programs that employers buy, though I'm
not sure that really fits with the top-level fear of "our programmers stealing
our data".

------
bungie4
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.

------
CaptSpify
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.

~~~
chadash
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.

------
njarboe
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_displaySectio...](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=LAB&sectionNum=2870).

~~~
ryandrake
> 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
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-c...](http://levinebakerlaw.com/publications/post-employment-non-competes-
unenforceable-in-california/) 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.

------
arca_vorago
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.

------
jglauche
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
> 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
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.

------
evilmushroom
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)

------
mrchicity
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.

------
toolslive
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.

------
heywire
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
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.

------
holstvoogd
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 ;)

------
dahart
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.

------
skrebbel
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.

------
lr4444lr
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.

~~~
beagle3
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
_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
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.

------
wemdyjreichert
How can I politely say "no way" while still getting the job?

~~~
lambda_lover
In my experience the problem is that these clauses are traditionally presented
to you by a non-technical employee typically from HR, and (in my anecdotal
experience) these employees usually try to dismiss your concerns with a "oh
it's just a formality" or "all companies make you sign this sort of thing!"...
so if you're not important enough to talk to someone higher up, you might just
get your offer revoked if you try to fight it because your HR contact isn't
important enough/doesn't care enough to fight against it for you, and the
legal department only has so much time for custom agreements.

~~~
eeZah7Ux
Those are all tricks. They put pressure on the candidate to sign ASAP.

If the candidate accepts the contract as it is the company wins.

If the bargains around clauses it's still OK and having many clauses to drop
makes it look like the company is being flexible.

Always push back!

~~~
lambda_lover
Oh I do. I'm just saying that most folks aren't as stubborn as me, and it's
unfortunate that you have to play games over something like that. All it does
is screw over people who don't have many options, and widen the delta between
the haves and have-nots in our field (the haves have the luxury of rejecting
these clauses, while the have-nots might not be willing to "roll a hard 6" on
their only job offer).

------
emodendroket
This should be "why non-compete agreements should be legally curtailed," not
"why I, personally, do not sign them."

------
CharlesMerriam2
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
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...

------
alain_gilbert
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.

------
jxramos
I remember reading about these clauses in contracts as the "fear and loathing"
clause
[https://books.google.com/books?id=nWWAGnBDzJEC&lpg=PA164&ots...](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)

~~~
52-6F-62
Glad I read that. Thank you. I probably be taking a look at the rest of that
book.

Is it worth the full read?

~~~
jxramos
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
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
> 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.

------
brooklyn_ashey
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
+1. I know people who will probably need this.

------
meuk
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).

------
quickConclusion
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_
I don't think the lawyers would allow that kind of trickery.

------
dumbfounder
>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.

------
robodale
There's a relevant discussion that happened recently here:
[https://news.ycombinator.com/item?id=16575920](https://news.ycombinator.com/item?id=16575920)

------
DBCerigo
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/bl...](https://github.com/DBCerigo/non-compete-standard-
response/blob/master/README.md)

------
chadash
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
This 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
A) 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.

------
robocat
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.

------
kentt
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.

------
BrandoElFollito
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.

