

Ask HN: are non-compete agreements just for suckers? - j_baker

I hear of a lot of people who are asked to sign non-compete agreements successfully requesting to have them taken out without too much argument.  Is this a common thing?  Are there that many companies out there that will put them in the contract hoping that employees won't notice?
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icey
In the very few places that I've had to deal with a non-compete agreement,
I've always been able to get amendments made to the contract that limits the
specificity to a more acceptable level. Companies just want to try to protect
their property as much as possible.

The conventional wisdom appears to be that non-compete agreements are largely
unenforceable, however I'd be careful in using that assumption: No company
wants to deal with someone if they feel that person has no regard for
contractual agreements to begin with.

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Tangurena
The enforceability of a non-compete depends solely on the state involved.

States like OH and TX will enforce them vigorously (OH is so bad that I would
never move to that state, nor work there). States like CA will reject them
(except for sale of businesses). This is why MS fought tooth and nail for the
jurisdiction of the folks who quit to work for Google to be in WA (MS' home) -
where they are mostly enforceable vs CA (Google's home) - where they are not
worth the paper they are written on.

If it weren't so difficult to get a ballot initiative going (I ran for
election last year, and I had to learn a lot about what it takes to get on the
ballot and also getting elected - which I didn't get), this is one of my pet
peeves. I'd write it so that if you want to enforce a non-compete against a CO
resident, then you pay their salary for the duration of the non-compete - even
if the non-compete requires jurisdiction elsewhere.

~~~
j_baker
Actually, that's not necessarily the case in Texas. Enforcement is growing
stronger, but Texas courts are traditionally pretty reluctant to enforce non-
compete agreements.

Nowadays, they are enforceable, but there are lots of restrictions:
<http://www.hersh-law.com/lawyer-attorney-1078665.html>

It's a bit surprising, but Texas can be a rather employee and consumer-
friendly state in a lot of respects. Granted, it's a pretty backwards state in
most other respects.

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pg
They're the norm in tech companies. I don't think they're really necessary for
most employees. But few investors would invest in a startup whose founders
hadn't signed noncompetes. Otherwise they'd be investing in air. All the
founders could leave and start a new company doing the same thing.

~~~
eli
Yup, this is exactly it. When shopping the company to investors or as a
potential acquisition, Non-Compete/NDAs are an item on the due diligence
checklist.

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sharpn
In my experience (IANAL etc.): If you're being hired solely for your expertise
&/or experience, there should not be a non-compete clause in your contract. If
you are expecting to some extent to be trained in an emerging field then a
non-compete clause _may_ be justified. Juristiction plays it's part too - I've
'agreed' to such a clause in the past knowing that it was unenforcable as
restraint-of-trade under EU legislation.

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GiraffeNecktie
As far as I know, they're not enforceable (at least not in Canada). I would
take it as a warning sign that the company has some d*ckhead lawyers running
around without adult supervision.

~~~
j_baker
In the best case scenario, that sounds like the case. Worst case scenario:
they're trying to scare you into staying with them for longer than you would
normally. And _that_ IMO makes them scum.

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modoc
I've had every one of my employment or contracting agreements changed. I
usually don't strike them completely, I usually modify them to something
limited and reasonable. I won't steal inside info. I won't go to work for one
of the clients whose project I worked on, etc... Never had a problem as long
as I was willing to stand my ground.

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jackowayed
It doesn't seem like that big of a deal to me.

I had to sign one for my job this summer (small tech consulting firm that's
now doing a couple products and less consulting), but it was pretty limited.
It just said that I wouldn't work in the couple of pretty-specific fields that
my company's products are in for the next year.

One nice thing about the one they gave me was that they had a clause saying
that it did not in any way prevent me from using the programming knowledge
that I'm gaining, just the specific knowledge about the fields the products
are in.

Now, I wouldn't be comfortable of signing one much longer than a year. A lot
can change in say, 5 years. But 1 year so that you can't steal their ideas or
have an unfair advantage in competing with them because you know their plans
is fairly reasonable.

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indiejade
Here's a good article:

<http://mixergy.com/why-i-wont-sign-your-nda/>

While I know a non-compete isn't an NDA, the reasons outlined in the article
make a lot of sense and could be applied to reasons to not sign a non-compete.
Particularly:

 _Reason #1: It puts all the obligation on me and none on you_

H&R Block is infamous for attempting to bust people for breaking non-compete
agreements. Yet, it has been in the news recently that H&R Block is being
investigated for their practices in forcing employees to sign non-competes.

~~~
j_baker
Interesting. I recall reading that Google, MS, and Apple were in hot water
over that kind of thing. But I didn't realize H&R Block was in trouble too!

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olefoo
They are difficult to enforce in many jurisdictions; and to be enforceable at
all they usually have to be limited in scope. That said, yes, they are for
suckers, it's a sucker move to ask for one, and a sucker move to accept one.

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callmeed
In some states, Calif included, they are practically unenforceable (except for
perhaps the sale of a business).

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tjmc
They are mostly unenforceable here in Australia but I've still seen them in a
few contracts and never agree to them. Far more common are clauses that
prohibit overt poaching of clients or staff to a new venture which is more
reasonable IMHO.

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bkbleikamp
I don't think they're enforceable in CA.

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known
I think NDA is for Paranoids.

~~~
j_baker
I think you mean non-compete agreement instead of NDA? They _are_ two
different things. :-)

