

Ask HN: programmer asked to sign 2 year non compete being 3 years full time. - joering1

a friend works full time as a software engineer for a healthcare company and specialize in very niche software. Now 3 years later all of sudden bunch of people are being let go just weeks after signing a new agreement. The new agreement holds that for 2 years from the moment of being let go or quitting, you cannot work for a company in the same field. My friend being programmer with unique healthcare knowledge would never sign an agreement like that in the first place but now 3 years on the w2 job the company is "forcing" him to do so.<p>what would you do? is it reasonable/normal to negotiate for some additional perks given this new very uncomfortable position??<p>thanks.
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larsberg
You didn't talk about where you are, and location matters a lot. Also, I hate
to sound like reddit, but your friend might want to talk to an employment
lawyer if they have issues with this kind of clause. Many of my friends work
in finance, which is even worse than healthcare about non-competes. In
practice, without discussing any possible concrete payments that may or may
not have been awarded to anyone I know, because they would be bound by
confidentiality agreements that they would never violate:

\- Companies usually only enforce it on "key people" but they do it liberally,
as many of these companies have non-compete payout riders on their key person
insurance.

\- They may not enforce the whole term --- it is their choice.

\- They will probably offer full salary during the non-compete period (at
least in Chicago, where less than full salary won't even make it past
mediation). If you lawyer up, you can probably negotiate at least
COBRA/benefits payments as well and possibly part of your previous yearly
bonus.

\- If you take another job during the non-compete period, you may need to
prorate the salary against what you're being paid to not work.

\- If your friend plans to "fight" they should be ready for a protracted
battle with many months of limbo, unpaid status during which the company will
attempt to have injunctions issued against a new company to keep your friend
from working. Also, many of these contracts have mandatory non-binding
arbitration followed by mediation, though several lawyers I talked to said
they usually just file for court anyway immediately if they're fighting, since
that is where it will end up.

Anyway, after talking to a lawyer, if she feels like it's worth the downside
risk of having to spend two years volunteering at a local animal shelter and
working on her Project Euler achievements, sign away. If not, or if the
lawyers in their area have different advice about what the compensation will
be for the non-compete, then walk.

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epc
Resign without signing the agreement.

About the only way I would sign such an agreement would be if the company put
two years’ salary in escrow for payment to me during the two year period.

~~~
dalke
Isn't it better to have them fire you than to quit outright? I think a future
employer would prefer to see "fired because I refused to sign a two year non-
compete" than to see "quit because I didn't like how management was acting."
The latter is more ambiguous to interpret.

Personally, I would treat it as a salary negotiation and ask for "garden-
leave." See
[http://www.employmentlawgroup.net/Articles/ROswald/Defending...](http://www.employmentlawgroup.net/Articles/ROswald/DefendingNonCompete.asp)
: "Before signing a non-compete agreement, an employee should request that the
employer include a “garden-leave” provision in the non-compete. A garden-
leave clause requires the employer to continue paying the former employee her
salary and benefits in exchange for the employee’s agreement not to compete
with the employer. This arrangement benefits both the employer and the
employee because it gives employers necessary protection against unfair
competition yet ensures that employees are financially secure during the non-
compete period. While Virginia courts have not yet addressed the
enforceability of a garden-leave provision, other courts have held that a
former employee is entitled to garden-leave pay where she is unable to find
new employment because of a non-compete."

The Wikipedia entry on non-competes may be helpful:
<http://en.wikipedia.org/wiki/Non-compete_clause>

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codeonfire
I would just go somewhere else and start working. If someone actually had the
balls to try and cause problems for me (for zero gain on their part) I would
probably liberally advertise that fact and drag them through the mud.

In your friend's case, since he will have to quit under duress, he should be
entitled to unemployment benefits while he finds some sane employers. No, it
is not reasonable/normal to negotiate with insane idiots.

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tomfakes
As a founder of a company being acquired, I was ok signing an agreement that
had a 1 year non-compete.

As an employee of a regular job - hell no (unless they agree to pay me a
substantial portion of my salary for that 2 years)

Depending on the location, this may actually be un-enforceable, but he'll need
a lawyer to verify this and fight it if necessary.

~~~
joering1
this is New York City. how about negotiating terms down to one year or 6
months? is that something you think is worth mentioning to mgmnt?

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Hominem
I've had two people quit over just this issue. I signed mine figuring never in
a million years would they actually track me down and sue me if I was ever let
go.

They are getting their ducks in a row for some specific reason. Are they being
Acquired?

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moocow01
If your friend is in the position to do so he should get an offer from a
competing employer and then bargain ruthlessly with the expectation of
leaving.

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joezydeco
What is the company afraid of? Is there some competitor poaching talent? The
idea of locking you out just before firing you is very peculiar.

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drallison
He should consult a lawyer and do so, if possible, before signing the
agreement.

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adamrights
How about that the deal is void if the company lets him go.

~~~
joering1
its pretty straightforward written: for any reason on any side.

~~~
epc
He should contact an employment/labor attorney. Under no circumstances should
he sign the agreement without consulting an attorney.

30-60-90 days of non-compete is one thing. Two years is insane, almost
criminal.

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pasbesoin
> all of sudden bunch of people are being let go just weeks after signing a
> new agreement.

If I'm reading this correctly, is this not itself a huge indication of the
company's attitude and so a warning sign?

I agree with the others: Talk to a (competent, specializing in local
employment law) attorney. Start job hunting now. Don't sign it unless you have
a good reason (e.g. guaranteed compensation at then-current pay level, plus
normal raises as determined in some fashion, for the full non-compete term --
and paid COBRA or equivalent benefits that perhaps extend beyond the non-
compete term (because you still need coverage until you actually land the next
job); health care insurance can be as important as anything else -- also not
forgetting the value of pension plan participation and/or 401k match, and the
like).

No, you may not get all of that. But those are all factors to consider in
making a personal decision.

From your superficial description and my own personal experience, it reads as
if this organization may be turning into crap. I'd suggest seriously exploring
moving on.

P.S. Also know the geographic limitations, if any are specified, of the non-
compete agreement. In some jurisdictions and/or employment domains, absence of
geographic limits effectively makes the non-compete illegal or unenforceable
or a judge may modify the agreement to impose such a limitation -- probably
the maximum geographic limitation allowed under local law. IANAL nor
particularly versed in this; it's my impression gleaned from others' comments
here and there on this matter.

