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Millions of workers believe they are bound by non-binding contracts (thespeakernewsjournal.com)
268 points by sprechen 3 days ago | hide | past | web | favorite | 169 comments





There are other ways in which the papers you sign might not be as binding as you think. Story time.

A while back, the startup I worked at was acquired by a large company known for its aggressive legal department. Everyone had to sign an agreement, including both intellectual property and non-compete clauses, or be fired. One guy actually did refuse, and was fired. A few years later, I left that big company to work for another startup. I was concerned about that non-compete, so I did a bit of checking and found that it was NOT A CONTRACT as far as the law was concerned. You see, a contract by definition requires consideration on both sides. The relevant courts had repeatedly found that an offer of initial employment counted as consideration, but an offer of continued employment did not. Thus, what I had signed was not a contract. Legally, it wasn't a non-binding or unenforceable contract. It was a non-entity. A piece of paper with some irrelevant squiggles on it.

I've heard that other ex-employees (and their lawyers and the courts) reaching the same conclusion is the reason that the big company in question adopted a policy of technically firing everyone from any startup they acquired, and then re-hiring them immediately under the same terms. The sole effect was to turn that continued employment into initial employment, non-consideration into consideration, validating the rest of the contract. It's now standard practice throughout the industry.


The other thing is that any contract is only enforceable in court. Even if everything is perfectly within the normal parameters of a contract, only a court can actually enforce it.

Some people sign contracts, and then do not fulfill the terms, betting that the other party will not take them to court.

I was once asked to sign a non-compete when my employer was going out of business. I had to sign it to get the severance package. It was quite broadly worded, and could have been interpreted as preventing me from doing any software development for a period of two years. I did sign, because who was ever going to enforce it?


Sounds like a risky strategy TBH. On the one hand, you saved the trouble/expense of going to court right then and there to get the severance package. On the other hand, going out of business doesn't always mean there's no successor with standing to sue on their behalf, and the kind of people who pick up shuttered companies' assets at pennies on the dollar are often exactly the kind of people who might engage in a little legal greymail.

> adopted a policy of technically firing everyone from any startup they acquired, and then re-hiring them immediately under the same terms

Hmm, interesting. I know of a recent case in New York State where one company acquired another, but selectively retained its employees. The acquiring company thought that it was simply not hiring everyone, rather than firing anyone. One of those people sued for unemployment, and the court found that the acquiring company did in fact have to pay unemployment for the employees it "did not hire".


Well the old company fired them, and the old company is now owned by the new company then.

> and the old company is now owned by the new company

That isn't necessary. The old company could legally just cease to exist, with its assets transferred over to another entity.


Liabilities also transfer.

If they're bundled somehow, sure. Otherwise, the owners of the old company could choose to retain those liabilities and sell only the assets, could they not?

The sale is not complete until debts and liabilities are settled. So either way, unemployment was going to be paid.

Then the old company would still have fired them.

> I've heard that other ex-employees (and their lawyers and the courts) reaching the same conclusion is the reason that the big company in question adopted a policy of technically firing everyone from any startup they acquired, and then re-hiring them immediately under the same terms. The sole effect was to turn that continued employment into initial employment, non-consideration into consideration, validating the rest of the contract.

Do you know if that's been tested in court? Seems like such an obvious violation of the spirit of the law that it wouldn't (one hopes) hold up in appeal.


You quoted “...and the courts” so I think commenter answered your question.

No. That is referring to the courts reaching the conclusion that the offer of continued employment is not consideration. It does not refer to the courts' (or lawyers') opinions on BigCo's workaround.

-A former employer nagged me into signing a rather draconian agreement - basically, anything and everything I came up with, be it within their business area or outside it, be it on my time off or whatever, while I was employed by them or for a period of 12 months after I had left them, belonged to them.

I signed it ‘Juul E. Nissen’ (the equivalent of S. Anta Claus’)

Nobody bothered to verify the signature. I wonder how that would have held up in court.


Signatures are a modern thing. It used to be you 'made your mark' on a document -- many people couldn't write. So the question is, would you perjure yourself when asked "Is this your mark on the contract?". After all, many signatures bear only a slight resemblance to a printed name.

Did they ask you to sign this contract after you had accepted their offer, or after you had already started working for them? Or was it provided as part of the job offer? Did you receive any additional compensation (consideration) for signing this contract?


It came up after I had worked there for years; we were bought up by a multinational whose HR department wasted no time preparing a number of ‘additions’ and ‘clarifications’ to our existing contracts.

(Their) problem in court would have been that such contracts are not enforceable in my jurisdiction; however, my colleagues and I would rather not start off the new business relationship by dragging them to court, so we duly signed (of sorts).


not sure about the OP's experience, but typically 'all your brain belong to us' forms are presented during the first day orientation, many days after the offer letter is received and accepted.

I work under a contract that says my employer claims a non exclusive right to use anything I invent that could be construed as using company resources. It’s not an unfair contract, and I obviously don’t use company resources for anything I do on my own time, but the funny thing is that if they ever decided I had inadvertently used some company resource for some part of a personal project, it wouldn’t matter. I license my personal projects CC0 aka public domain. Everyone has a non exclusive right to use my work!

Could that be considered fraud? They should be able to take at face value that a document that you signed is actually your signature.

Seems a bit odd to expect a business partner to "verify your signature". How could they do that anyway? Compare it to previous documents? You could have changed your signature.

Not saying they should get away with draconian agreements, but the "right" thing to do would be to not sign it.


He could claim he didn't sign it, but I doubt he'd get away with it because the next question would be "why did they take the contract from you, with this signature on it, and the file it under your name, with this signature on it? If you didn't sign and give them this contract, why did you not question why they employed you without (from your perspective) having turned in a signed employment contract?"

No, thats not the right tree to bark up. No one can testify about why someone else did something- that is the "objection! speculation" that you hear.

Im curious how this would actually go, considering it must have happened before.


They can ask you why you would sign it with an alternate signature if you were not intending to honor the contract however. I expect the judge would do everything in his power to rule against you in that case.

I'm also curious about what has happened when people tried this before.


A signature is evidence of an agreement. It is not the only evidence that can be used to prove that an agreement was made.

Another big red flag is being told to sign immediately.

If you're ever told "sign this or be fired", even if there is consideration (ex: a severance) w/o being given the chance to have a lawyer review it, there's a strong chance it will be thrown out.


I was concerned about that non-compete, so I did a bit of checking and found that it was NOT A CONTRACT as far as the law was concerned. You see, a contract by definition requires consideration on both sides. The relevant courts had repeatedly found that an offer of initial employment counted as consideration, but an offer of continued employment did not.

As with all things legal, this depends on the jurisdiction (in this case, meaning the state since we're talking about US law). The general rule in most states is that continued employment is not sufficient consideration, but in Illinois it currently is; California doesn't allow non-competes for non-owner/non-highly-compensated employees, so it's a moot point in CA. [https://www.bna.com/continued-employment-sufficient-b5798208...]


> firing everyone from any startup they acquired, and then re-hiring them immediately under the same terms

I can't imagine any judge accepting this... but I can imagine it backfiring badly, adding bad faith into the interpretation.


IANAL, but a lot probably depends on exactly how it's done. Was the previous contract, and all consideration attached to it, truly severed at some point? Was there a period, however brief, when the employee was cut off from company facilities and equipment? Was there an explicit offer/acceptance of the new employment, conducted as other offers customarily are at that company? Were any arrangements regarding things like benefit carryovers the same as those available to others, not specially made up for the acquisition case? Were any promises made as part of the acquisition itself regarding retention or compensation? I can easily imagine that one set of answers might lead a judge to believe the firing/rehiring was legitimate, and another set of answers leading them to believe otherwise. Law follows its own rules, not common sense.

It's still a lot of effort (time & $) for an individual to do any sort of legal defense.

Sounds like a company to avoid. Name them and shame them.

That sounds like a loophole that courts outside the US will soon start to not accept. Though, the recent House of Fraser 'sale' was more of a transfer of worthwhile assets only, excluding employees, which is the same loophole you describe.

In most of Europe (except for the UK as far as I know) you always take the responsibility for employment from the acquired to the acquiring party. In some cases it is even enforceable in companies acquired due to bankruptcy. The 'fire everyone and rehire under shitty contracts' does not apply. Though I have heard of cases where it was tried.

Business sales in the UK are usually 'as a going concern' where the new owner takes the responsibility. House of Fraser was specifically bought differently, making it notable.

> The relevant courts had repeatedly found that an offer of initial employment counted as consideration, but an offer of continued employment did not.

Interesting. Couldn't you construct a similar argument against the "we've updated our ToS! You can accept it or leave our service and lose access to all your documents/games/devices/friends/etc" malpractice? Or is that a different legal basis?


Instead of firing/hiring to create consideration, why not just attach a $1k bonus to the non-compete? I'm sure after spending millions on an acquisition they could have a few thousand more set aside to give themselves a good first impression.

"The relevant courts had repeatedly found that an offer of initial employment counted as consideration, but an offer of continued employment did not. "

I could swear that the SCOTUS had a similar case and decided that continued employment did count as consideration.


As gamblor956 has also pointed out, it's very jurisdiction- and time-dependent. This was Massachusetts in 1999. It might well have changed here since then, and/or always been different other places. If I were in a similar situation again, I'd have a lawyer check things out all over again to account for such differences.

It doesn’t need to be enforceable, as far as the minimum wage class is concerned- if the spurious suit alone would have the defendant summoned to court multiple times over months, and likely unemployed during that time, it’s just as destructive as a real, successful suit would be for an ex-Googler, if not moreso. Without wages they can’t pay rent or feed their family (because this class is rarely able to accumulate savings.). If they can get a job before the suit resolves, having to move shifts around to get to court appointments could make them lose it again. And that’s assuming they have complete faith, somehow, that the law would rule in their favor- when they’re fighting a corporation, have minimal legal resources if their own, they would have to be very sure they live in a no-enforcement state- because a successful suit would end their financial life.

Justice only for the rich.

I can't find it now, but there was a case that was talked about on the Mic Dicta legal podcast about this false idea that contracts are a negotiation with the employer. They're not and shouldn't even be though of contracts in the traditional sense.

You sign it if you want the job. You disagree with it: there is no negotiation. I have always refused to sign non-competes and wrote this post about it:

https://penguindreams.org/blog/why-i-dont-sign-non-competes/

Usually it hasn't been a problem, but this past year I had to walk away from two jobs because they wouldn't adjust the contracts. I'm a skilled worker though, and I have that ability due to my line of work. The average labourer does not.

Even if these contracts are not enforceable, if a company sees that you have a previous employer that is a competitor and knows they make workers sign those contracts, they are less likely to hire you because they don't want to get into a court case.

California prohibits non-compete clauses in their contracts and nullifies the enforceability of non-competes from other states for workers who take jobs in California. The Federal government needs to go the same route. No employer has a right to your loyalty after you leave a company, unless they're willing to be like Germany where they pay your wages during the period of the non-compete.


> California prohibits non-compete clauses in their contracts and nullifies the enforceability of non-competes from other states for workers who take jobs in California.

There are silicon swamps, silicon deserts, silicon mountain, Route 1, and so on. And then there's SV. IMO non-compete unenforceability is the valley's secret sauce.


I went back and forth several times with one employer over some parts of the employee agreement, all very cordial, and ended up never signing it. When I later resigned, the admin emailed me saying that they didn't seem to have a signed agreement on file so could I please sign the one she'd attached. I explained as nicely as I could that the ball had been in their court when it got dropped, and that I wouldn't be signing any version of the document at that point.

I'm not sure I'd recommend that as a deliberate strategy, but it worked out OK for me that time.


I've done this too. There have been many situations where I kinda bypass the HR stuff - kinda don't acknowledge it happened or whatever, and just continue my discussions with the people interested in getting me employed. works great. HR doesn't win those.

I heavily negotiated my employment contract for my current job, including using an attorney to revise things. I was going from 1099 to W2, though, and my employer really wanted to keep me, and I really wanted to stay with them.

I find it strange that one can put anything in a contract with a disclaimer at the bottom saying that it is "enforceable to the fullest extant of federal and local law" knowing what is enforceable. This is misleading at best. In my opinion such contracts should be entirely null and void, not just the unenforceable parts.

I do admit that were I in an even remotely close position to changing the law around this it would probably disproportionally affect workers, some penalty would need to be levied against the infringing party, but where would that end?


I kind of wish somebody would make a website naming and shaming the companies that have awful contractual terms.

It would be a good aid to finding decent companies. I've noticed that the companies that have ridiculous "fuck you" contracts tend to be as awful as their contracts tend to imply. "company xyz claims 100% of your IP" is a completely objective measure you can judge them on.

Shining a light on it will probably help put an end to it too.


You can make an unenforceable contract in good faith though. How would you protect those circumstances?

Maybe that's the wrong approach then. Contracts have effectively been weaponized by those who can afford lawyers against those who can't, with those who can't rarely ever benefiting from any sort of contract. Perhaps the solution is to just remove the problem. End contracts entirely between people who can and can't afford contracts.

That would make all sorts of services unavailable to the common person. Essentially if a direct and immediate exchange couldn't be performed the transaction can't happen. A contract is needed for any sort of debt. It could be as simple as putting down a deposit for a contractor to remodel a bathroom.

A less severe change might make sense. Make it so that, when one of the parties involved in a contract is a person who can't reasonably expected to have a lawyer review the contract or who can't reasonably be expected to negotiate the contract, that the entire contract must consist of a series of clauses, all in plain English, all individually agreed to, and all directly relating to the transaction at hand and only the transaction at hand. And that, in such contexts, the party without a lawyer cannot indemnify the other party against anything and cannot waive their right to enforce any of their rights in court and/or with a class action lawsuit. [0]

This serves two purposes:

1. Reduce the degree to which fine print can hurt the party signing it in unexpected ways.

2. Make complicated contracts have a real cost in terms of making transactions more annoying. This gives businesses an incentive not to use them.

[0] The Wells Fargo fraudulently issued credit lines, for example, were protected a bit because most of the victims had existing arbitration agreements. Those should have been unenforceable because (a) they were not directly related to the fraudulent accounts and (b) Wells Fargo customers should not be able to waive their rights. Instead, CA passed a silly after-the-fact law that says, more or less, that banks cannot enforce arbitration agreements against their customers when fraud is invonved.


There is a doctrine for contracts that aren't considered "negotiable" where any ambiguity must be considered in favor of the weaker party. Of course this then makes it so the writer of the contract wants things to be explicit as possible. Quite the opposite of succinct and "plain" English.

Also the courts fundamentally consider arbitration to be the solution to the power imbalance problem. Its much less expensive and quicker for both parties. HN has the opposite impression of them, but that is the reason they are being pushed so hard.


The problem is that this precision comes at the expense of the vast majority of people’s ability to comprehend the agreements they are entering into. In these cases, I would argue the contracts should be void because there is no “meeting of the minds”. If someone doesn’t have a lawyer, they should not be bound by contracts that cannot be properly understood without a lawyer.

> Its much less expensive and quicker for both parties.

Really? I'm hold a promissory note in a company that is in default. Unfortunately, I made a rookie mistake and agreed to an arbitration clause in the note. Suing the company in a real court would be quite inexpensive. Filing an arbitration claim is quite a few times as expensive. Even if I filed and won an arbitration case, I would then, drumroll please, need to sue in a real court in order to obtain an actual enforceable judgment.

So I'm rather unconvinced.


I think most people here are more than ok with Arbitration being an option, but what people here hate are the clauses in the contracts which require arbitration that is paid for by the company, essentially removing your right to redress in the courts.

non-binding arbitration wouldn't solve the power imbalance, as if the company loses they would file an appeal in court - and you'd have to pay or drop it. For it to work as intended it has to be binding.

The flip side is you can't go to court - but alas you couldn't afford to anyways.


I don't see the issue as being difficult or complicated - binding arbitration is fine and useful, as long as it is mutually agreed upon after the disagreement arises but before it is litigated.

The problem is being pressured to commit to arbitration long before you know what the implications will be. Thus, I think it should not be permitted for anyone to make that decision in advance of the specific dispute.


If there was class arbitration or arbitration provisions were void in the case of a class action then much of the criticism would go away.

The main problem today is companies can commit “small” torts under $1,000 and it’s not worth it for individuals to complain seperately.


even a direct and immediate exchange can form a contract. for example things like (extended) warranty for the laptop that you're just buying with cash is a contract.

If large classes of business want to remain in business, they will find a way without such abusive terms.

I agree that contracts have been weaponized, but maybe we can go with something like a public defender for contract law.

Is it kind of telling that the only case when free representation must be provided by the state when someone is indigent is criminal law or am I a victim of a long workday?


>maybe we can go with something like a public defender for contract law.

Public defenders for criminal law is something massively broken to the extent that we have innocent people going to prison every day. It is a system to be disgusted at, not attempt to replicate.


I will admit that public defenders are not as effective as private lawyers, but what would happen if we had nothing...people would still end up in jail most likely to a greater degree...perhaps we can iterate instead of innovate.

You have a lawyer review the contract and they are held responsible if they are approving known-unenforceable agreements.

The situation you are not handling is an "unknown"-unenforceable agreement though.

I get that you are trying to solve the knowingly-unenforceable contract situation, but there is a lot of collateral damage with your proposal.


This is ridiculous because the vast majority of regulations have never been tested in court.

If you punished lawyers for making good faith attempts at following the law, all you'll do is encourage lawyers to resort to ever nefarious means to avoid punishment.


What about the case where the contract is enforceable at the time of signing but the law changes after it's been signed?

What about it? At the time it was signed, it was enforceable. So the lawyer would be fine.

Should the entire contract then become void when one subclause becomes unenforceable?

If not, how is this different from the case where a previously unenforceable clause becomes enforceable?


No. There are standard, specific clauses in contracts to prevent this. If one clause is deemed void, the rest of the contract stays as is.

But that's the problem that we've got now. Being able to have such a blanket clause encourages putting in all kinds of crap to see what sticks.

Two parties can form a contract without a lawyer ever being involved, though.

IANAL but I think in the UK if a contract has too many restrictive and unenforceable clauses a judge will sometimes toss the whole contract.

Lawyers are thus incentivized to be careful about what they put in.


it's generally not a crime if there is no intent, trust the process.

Nah, the law can change and invalidate formerly legal clauses.

So rather than trashing the whole contract because of a change in the law parties can agree in advance to keep the old contract in place and ignore the invalidated bits.

Otherwise, companies might be forced to fire employees and vendors and then re-hire them each time employment law or contract law changes.


By American common law every contract is completely unenforceable if any one part of the contract is unenforceable... unless you write a severability clause. Businesses are never caught by this of course, but everyday people are.

Also, contracts are not particularly binding.


I find it strange that having people sign contracts you know (or should know) are invalid isn't considered fraud. It seems to me that this is lying for monetary gain at the expense of the other party and should result in both civil damages and criminal charges in a sane legal system.

Unenforceable and invalid are not the same thing.

https://en.m.wikipedia.org/wiki/Unenforceable

More generally, contracts can have moral weight (by the lights of the signing parties) even if the state declines to enforce it in court.


That moral weight is part of the problem. If the State did go through the bother of taking an style of clause apart, pointing into it and saying "look, you can't do this", it's because there is a moral problem with that style.

People pushing unenforceable contracts are exerting some immoral power into other people, expecting them to comply due to those others' morality.


> If the State did go through the bother of taking an style of clause apart, pointing into it and saying "look, you can't do this", it's because there is a moral problem with that style.

It says something about the moral assessments of the people forming the political system (plus something about non-moral political factors), but that doesn't mean that the parties signing the contract don't find the clause moral by their own lights. (And likewise, if you're a moral objectivist, the clause can continue to be moral even as the political system is making a moral mistake.)


Does anyone know if my understanding is correct? The way I understand it, if you have an unenforceable contract, then as soon as the law changes to allow its enforcement, you're bound by it. Whereas if that clause wasn't there, then you wouldn't be. Hence even having unenforceable terms is a risk. Is this correct?

Even if you think it is unenforceable and even if you have piles of similar cases that were thrown out of court in similar situations, there is still a chance that the court won't throw out your case -- because of some small detail that you didn't notice.

Don't sign stuff if you don't agree with it. It is a risk -- and potentially a very big risk. Even if you happen to win your argument, if the case goes to court, you are on the hook for a large pile of cash. And there is no guarantee that the process will be quick. Your opposition can play any number of underhanded tricks to drag the whole thing out as long as possible, knowing that you can't pay for a lawyer forever. Even if you are able to get get that money back eventually, you may be in for some incredibly rough times in the interim.

When I've had to (because I needed the job), I've signed inventions agreements, non-compete clauses, etc. An inventions agreement basically means that I'll be using your company as a staging point while I look for a non-crappy job. I'll be out of there as soon as I find something better. A non-compete means that you have to pay me for my time. If you have a 1 year non-compete, and I intend to work for you for 3 years, then I want 33% more money than I would ask for someone without a non-compete agreement. I will then use that time to write free software (and, if you can believe it, I literally did that once).

But usually you have a lot more leverage when you are hired than most people think. It's expensive to hire people -- maybe not so bad for juniors, but once you've got 10 years or so under your belt it's a major investment in time, money and energy to hire you. If the legal department cock it up, then they will have hell to pay from the other departments.

Negotiate your contract! I can't stress that enough. Again, there will be times in your life where you have to take what you can get, but weigh your options and make the decision that's good for you. Most of the time, though, this won't be your only opportunity for a job, whereas this is the only opportunity they have to hire you. Use that fact to your advantage.


In the United States, a law cannot apply to anything before it was passed. This is in the constitution. I am not aware of any case where what you claim happened.

I meant that the instant such a law comes into effect, it applies to all existing contracts from that point onward, right? So any violations from that point onward could be enforced based on a past contract, even though that contract used to be unenforceable. The contract wouldn't need to be renegotiated, right?

Discussing wages with other employees, by the way, is something employers cannot prohibit in the US.[1] Although many employers try.

[1] https://www.dol.gov/wb/media/pay_secrecy.pdf


I have been a strong advocate for spreading this fact to both my direct reports and to my colleagues. I will never discuss other people’s salary (especially my directs’, that’s against company policy) but I will discuss my salary and encourage others to do the same.

If the guy next to you is making 1.x times your salary and you think he’s dead weight, time to discuss it with your boss or move on. You have to be your own advocate, and you’re actively hindering others from being their own advocates if you keep to that anti-union, salary secrecy bullshit.


Lawyers who regularly engage in this should be disbarred.

It is abuse of the law, to intimidate, restrict, and silence. Abuse of the law should be and is grounds for disbarment.

Having a degree and passing a test does not give you the right to work. No more so than all the degreed people who are "under-employed".

The law holds lawyers to standards. Unfortunately, the current administration of the law severely curtails actually enforcing those.

P.S. U.S. perspective, although I expect this is not restricted to the U.S.


Amazon famously did this to their warehouse workers: https://www.theverge.com/2015/3/26/8280309/amazon-warehouse-...

Some of the workers most affected by this sort of tactic are those that have the least understanding of the contracts' enforceability. Feels like there should be some kind of recourse for this kind of thing.


When Twitch/Amazon acquired Curse through Twitch they made everyone in the Alabama office sign very broad non-complete contracts as a condition of continued employment, but the California office was spared. When someone spoke up in the meeting with Amazon HR onboarding about the issue the representative spoke up, "Because it's legal to do so here.". The rest of the meeting was uncomfortably quiet.

It probably doesn't help the murky legality question when some non-compete contracts are somehow enforceable even in the event that the employee is fired.

As a practical matter, they're not wrong. If you can't afford to litigate a contract, it doesn't matter that the terms are unenforceable.

The only real solution is to outlaw even the utterance of such terms, to be enforced by the Feds. Compare, for example, how a clause like "only Caucasians will be considered for this position" would be treated.


Education, I feel like many are screaming. If only they knew more about this stuff, then they wouldn't fall into this trap. But isn't this an arms race? If workers got smarter, wouldn't industry find something else to exploit, giving workers just as little leverage as before (possibly exploiting the fact that workers have to trade away something to have time to learn more)?

This depends on what you mean by “workers getting smarter”. If it relates to a specific legal clause, you are correct that more knowledge of that clause would just lead to a new clause that benefits the corporation. If it relates to systematic worker protections through legislation, we might see different consequences.

I don't know the solution, but you can't reasonably expect normal people to out-lawyer lawyers.

If you think a non-compete is bad, look at something like a non-disparagement clause.

I'd recommend anyone who encounters a Non-disparagement clause (in this case strictly in a employment agreement) in a contract walk away from said contract.

I am not a lawyer this is not legal advice.


I walked away from such a contract because I thought it would seem to limit my freedom of speech. And I didn't want to work for people who in essence said I could never criticize them in any way. That's a form of abuse, of mental slavery.

Now I understand a contract that says some things should be kept confidential. But say what if your employer commits a crime and you contract says you are not allowed to talk about it?


Contracts involving illegal acts are not enforceable.

And I'm with you - I've never been shy with my viewpoints and refuse to start now. There's no way I'd sign a non-disparagement.

In fact, it would be interesting to compile a list of companies that do. It would increase both job-market efficiency and help rectify a bit of consumer informational asymmetry. (If I know former employees are gagged, I'm going to discount company claims on the assumption that they wanted the gags for a reason.)


> But say what if your employer commits a crime and you contract says you are not allowed to talk about it?

If I remember right, that case is explicitly covered under whistleblower laws.


I will, in the future, walk away from any contract that contains a non-disparagement clause. It is not worth it.

Besides California, is there some map or list of states and how they handle non-competes?

It’s unfair that companies, who have extremely high power in the relationship, can load their contracts up with one-sided and often unenforceable stuff. Employees, who are the party with low power, must accept the terms or GTFO. Then the onus is on them to spend their time and money fighting the legal battle to invalidate these unenforceable bits.

Wouldn’t it be fairer if the party with all the power, and who dictates the content of the contract, must convince a judge that it’s enforceable before a defendant has to lift a finger or shell out money?

Currently contracts seem to be nothing more than one-sided weapons that powerful companies use to get vulnerable people to do things that they otherwise wouldn’t and can’t afford to fight. Let’s not pretend that more than a small fraction of employees out there actually get to meaningfully alter the contracts under which they work.


I think this could be solved by outlawing severability (where if one clause of the contract is junk, the rest still stands). That would make the contract written in a much more careful manner, and make those junk clauses a liability for the entire contract.

Not a lawyer though, so happy to hear the flaws in this.


Obvious flaw:

I write a contract with you: you will deliver me a "widget" in 6 months, at which point I deliver you $300,000. This contract is negotiated in good faith - we both at the time believe it is a good deal (this is important, as lack of good faith is a different issue). It turns out that after 6 months I don't need the widget like I thought I did, and fortunately for me there is a clause that I now discover is illegal. Now you have a widget neither of us want, and are don't have money to show for your last 6 months making it.


You price risk into the contract or buy insurance.

There is no law preventing parties from negotiating in good faith either. If circumstances change, people usually adapt.


That's the point: to make you view each clause as a liability rather than something to stuff in there just in case it turns out to be useful.

In this example, though, the "liability" works out in the company's favor, since they can unilaterally terminate the contract if they realize a clause is unenforceable. It makes it even more important for the party with less negotiating power to thorougly understand the contract's legality.

What if you make an honest mistake in the wording? What if the contract is complicated and you end up having part of it invalidated in court? What if the law changes, making part of your contract unenforceable?

There are so many good reasons to not outlaw severability, whereas outlawing it is a poor solution to one specific problem.


Put a hard limit on clauses that may be severed without invalidating the entire contract. Two, perhaps. Three strikes, and you're out.

>What if the contract is complicated and you end up having part of it invalidated in court?

Sounds like a feature, not a bug. Contracts have to be simple. If you can't do the transaction with a simple contract, you have to find a different method to carry out what ever is desired to be done.


I'm sorry, but this is a ridiculous statement. This isn't just about labor contracts. Contracts between businesses need to cover lots of different eventualities and edge cases. They need to acknowledge and adhere to a variety of laws, depending on the jurisdictions involved. Disclosures must be made. Eventualities must be planned for. Nobody (for the most part) wants to go to court to resolve something that could have been headed off in a contract.

Perhaps contracts between businesses and individuals, or even just businesses and consumers, should follow different, simpler rules than contracts between businesses - especially mega-businesses?

Let businesses with hundreds of staff attorneys do whatever they want to each other. But keep them from beating up a guy who just wants to collect a paycheck or buy a simple service.


Whether it's in the contract or not, you have to go to court to enforce it. There's no other authority.

I know that in France the unions are mostly doing contract review. They have their little desk, and employees come see them after they have been wronged by their employer, and the union member spends hours with the law books reviewing the contracts, various written interaction and timeline of event. People think of them as mostly organizing strikes or demonstrations, while most members spends their time reading laws and contracts. When they start seeing a new illegal trend, they blow the whistle publicly.

> Currently contracts seem to be nothing more than one-sided weapons that powerful companies use to get vulnerable people to do things that they otherwise wouldn’t and can’t afford to fight.

That totally hits the issue on the head. They're not negotiated contracts. They're one sided hammers.


Indeed. If there is no downside to stuffing contracts with every potentially useful clause they can think of, then why not do so?

Perhaps the solution is to give workers the right to have employment-related contracts reviewed and negotiated by an attorney of their choosing at the employer’s expense.

With actual costs attached, employers would suddenly have an incentive to keep their contracts as short and simple as possible, reserving the more onerous clauses for only the most senior positions.

Contracts for most positions would need to be kept short, reasonable, and comprehensible such that candidates don’t feel the need to exercise their right to attorney review.


> Perhaps the solution is to give workers the right to have employment-related contracts reviewed and negotiated by an attorney of their choosing at the employer’s expense.

This is one of the key reasons that unions are helpful to workers: each one of them doesn't have to go through this on their own. One expert does it for all of them.


> Currently contracts seem to be nothing more than one-sided weapons that powerful companies use to get vulnerable people to do things that they otherwise wouldn’t and can’t afford to fight. Let’s not pretend that more than a small fraction of employees out there actually get to meaningfully alter the contracts under which they work.

A straightforward way to address this could be through standardized contracts/clauses for mass markets. In the world of software understanding is not free, and the world of ambiguous natural language legalese is clearly even worse! In a market big enough to have many parallel participants, each clause of an agreement should be selected from a standardized bag such that online reading can readily explain your rights and responsibilities.

For the most part, this is already somewhat done through state "employment law", "landlord-tenant law", and the like. But then we get the OP situation, as well as contracts that actually attempt to countermand the law - I recently had the pleasure of reading a lease that was essentially an anti-tenant screed.

From the other direction, it also would be nice to voluntarily be able to give up a currently "standardized right" - say I don't need hot water in my apartment for savings of $100/mo. Assuming it was truly consensual and not just setting up a race to the bottom - percentages quotas or the like could address this.


This would be incredibly hostile to small businesses. Now you need to waste even more money on lawyers and tons of time navigating useless government bureaucracy. Big companies will be able to comply with any regulation thrown their way, but I don't think you can say the same about smaller shops. Your solution is penalizing good actors as well.

I can just imagine it now: Oh, we want to hire you but it looks like the next available turn for contract reviews is 1 month from now. Sorry, looks like you'll have to sit around without making any money in the meantime.

A judge's time is generally quite expensive, and handling the massive load of contracts would likely require appointing a lot more judges.

What if both parties are fine with a contract? Why should they be forced to get the government involved? And if both parties decide to re-negotiate a contract, do we need to go through the whole government approval process again?

I agree that there are issues with some employment contracts, but you are making some incredibly broad generalizations focused on a few bad actors without taking into consideration the broader consequences.


> This would be incredibly hostile to small businesses. Now you need to waste even more money on lawyers and tons of time navigating useless government bureaucracy. Big companies will be able to comply with any regulation thrown their way, but I don't think you can say the same about smaller shops. Your solution is penalizing good actors as well.

This would encourage shorter and simpler contracts, making things easier for both the parties and any involved judge.

> What if both parties are fine with a contract? Why should they be forced to get the government involved? And if both parties decide to re-negotiate a contract, do we need to go through the whole government approval process again?

Because, as the GP mentioned, it is not an agreement between equals.


I have no sympathy for a small business that includes unenforceable terms in a contract and I'm not sure why you are considering them a "good actor".

That’s why we have/had unions.

Why the hell is this being downvoted? Collective bargaining is one of the primary purposes of a union

A lot of workers do not like unions for many reasons (not a valid reason to downvote, but it's probably why.)

It's possible that mafia gains control of a union, think Jim Hoffa. That of course is not the purpose of labor movement.

It's a bit like marriage you have to pay a bit for it but having someone support you and fight with you is worth the commitment. Unite!


Its also possible that the mafia (or mafia esque tactics) gain control of businesses too.

> Employees, who are the party with low power, must accept the terms or GTFO.

I have successfully asked for some clauses to be removed from the contract.


As have I, but it requires a certain level of confidence and market position (and the knowledge that you can).

A better world is one where this doesn't...yanno...happen at all, yeah?


Sure, a relatively small number of employees have this ability, due to market demand or whatever, so congrats! If you want to feel what it’s like to negotiate employment as a more usual employee, try negotiating the terms of your cell phone contract.

He said he got his, what don't you understand.

He' what's wrong with America, BTW.


100% agree. I think a disproportionate number of the people on this site work in high paying, high demand fields and it gives us a kind of warped view of what the job market is like.

Anecdotally, I know someone who had a non-compete clause in their hiring contract to work as the desk attendant at a hotel, in California none the less. This is basically a minimum wage job in a state where non-competes are illegal statewide.

Sure, my friend could have asked for it to be removed, but that would mean delaying the hiring process and extra work for the hiring manager who now has to go through the legal team to make any changes to the contract. When there are 20 other equally qualified candidates, why would the hotel waste their time? It makes more sense for the hotel to just find someone else who is willing to sign the illegal contract.


And why would the hotel ever waste their time and legal resources enforcing a non-compete on a minimum wage desk clerk when they can just hire another one tomorrow?

Non-competes in that situation are empty threats to keep workers who don't know any better from quitting.


Oh, I totally agree it's an empty threat, but many workers don't know that.

It's kind of fucked up though that putting something obviously unenforceable in a hiring contract isn't being punished. Either the worker ignores it, knowing there's nothing the company can do, or they take it seriously and are afraid to quit to go to a competitor. It's pretty much no lose for the company though.


I agree that they're empty threats in the general case.

They should be banned to protect workers from the off chance that somebody decides to follow through.

Explicit, not implicit.


What, negotiating?

The balance of power involved makes is inimical to negotiation for many classes of employees in the United States. And because people are more important than businesses, this is something of a problem.

Yeah. I just don't understand your comment. The company and the employee both need to have some power to define the job role and compensation.

I agree.

As it stands, the employee, barring fairly singular instances (and, I note, I am one and I have hired them, I understand where the line goes), has no power.

They have a Hobson's choice not merely with one employer but with all of them.


Ok so, wouldn't you want this situation to come up more often, where a prospective employee can get the contract changed? You said you'd rather not have this happen at all.

Except that it won't happen more often because that power imbalance exists. I have some power when negotiating because I'm experienced, I'm very good at something in extreme demand, and I'm knowledgeable about how a business works. Most people don't have two or more of those things.

You describe a senior and socially competent tech worker's delight. Some of us have empathy for those who are not. "Oh, but more people with no market power can 'negotiate'" is not a net benefit for people even if it was a beneficial situation for me.

"In its majestic equality, the law forbids rich and poor alike to sleep under bridges, beg in the streets and steal loaves of bread."


I disagree. It is not a better world to prevent people (employers) from doing things that they wish to do, that willing consensual partners in those activities do not object to.

If you don’t want this to happen in your own life, then don’t sign such contracts. Leave other people to their own business. You are not their parent.


This is spoken from a position of privilege. We, as highly skilled tech workers in a field where demand outstrips availability, with probably a solid rainy day fund accumulated, we can afford to say no to a contract because we know the next is round the corner and we know how to feed family until then.

A large chunk of the workforce does not. They depend on the paycheck, need to feed people that depend on them and in their case, the employer holds all the cards. They more or less must sign. Even if they have another option lined up, for them it’s probably the choice between bad or worse terms.


That's not what the word privilege means. Having marketable skills isn't the result of privilege, it's the result of education and work.

It's just basic supply and demand. A job that anyone can do is going to have a larger labor supply than a job that few people can do. Employer demand is also a factor. Right now truck drivers are getting very lucrative offers because demand is so high, despite the relatively low skill level. Also risk factors, especially risk of death, can drive compensation sharply higher. For example working on live natural gas pipelines or deep sea welding isn't particularly high skill, but the compensation is huge because it has a tendency to lead to death.


You're right. We should let people (employers) employ young children to do dangerous work. As long as the dirt poor parents consent, then it's OK right?

If those people don't want their kids in this situation maybe they should try being not poor. You feel me?

Hold a gun to someone's head and act like they have a free choice when they decide to do what you demand of them.


Your point being, a huge imbalance of power makes mutual consent meaningless.

You focused so much on making a sarcastic comment that you ended up not even making sense. The person you're replying to specifically said a consensual agreement between the parties involved in the activity. How does that have anything to do with parents forcing their children to do dangerous work for someone else? Maybe try and comprehend what you're reading before hitting the reply button, it'll help keep you from looking like an ass.

Hobson's choices are not meaningfully consensual in the first place; the sarcasm used reflects this.

I once got put under a similar contract, while I was employed. (part of a merger). The alternative was to be out of a job with a pregnant wife. I later talked to a labor lawyer, who told me it was essentially unenforceable, and he was >95% certain I would win, but the contract also stipulated that it would be tried in NY (A very far away from me place) and that it would probably cost me $5k-$10k to defend it.

Yeah, no. You're completely ignoring the vast power imbalance at play here.

And I care far, far, far more about the employees, than I do the employers.


Are you a skilled worker. I have to, but I work in tech and get paid a lot. Your average truck driver or metal worker is not going to be in the same spot. Even in my field, there are some companies I had to work away from because of their contracts. If I was desperately poor and had no savings, I wouldn't have that option.

One anecdote does not data make. The fact of the matter is, most people are not in a position to ask for any changes to the contract.

Alot of people have been unemployed for quite some time and certainly aren't going to be able to negotiate that. I mean what are they going to do if it doesn't work out? wait another 3 years for another job.

Why do you think employees have less power? Both parties have exactly the same power: to kill the deal. Contracts only happen by mutual consent.

In many cases, employees are replaceable cogs who can be done without for the brief period before being replaced, while employment is vital and the absence of it for even short durations can be life-threatening.

Software is a rare exception, not the rule. Even then, people like me who have enough savings to live for over a year without a paid job (looking after a parent with Alzheimer’s in my case) are a tiny minority.


Employers have a much larger pool from which to choose employees than the pool of employers from which any one employee may choose.

In addition, the majority of employers have (either by coincidence or agreement) landed on a similar set of crappy and unreasonable contracts. For the vast number of employees out there, it's either submit to the contract or remain unemployed.


Yes, and yes, and don’t forget: employers tend to have ready access to legal advice which is too expensive for the average employee. Our legal system gives strong advantages to entities the more they can afford.

Not to mention the impact of not signing a contract is much higher for a person than for a company.

If you have the money/family support... If you are young enough... If you are not a woman... Add any minority to the list as needed. You can't always afford to turn down a job offer.

Because they absolutely do. A company that loses an employee likely isn't going to suffer. A person that loses or cannot get a job absolutely is.

"Contracts only happen by mutual consent."

That's not true in the least. When your alternative is to starve, one cannot really call that "mutual consent".


Power is not measured by your ability to walk away from a deal, but by your next best alternative if you do walk away.

Lets not pretend like every deal not made at gunpoint was some how made by parties of equal power.


Because if you can't buy food and shelter, YOU DIE. The company's worries are less severe.

If a company can't hire when they need it - they may die just as well.

Although I must admit, it's not correct to compare human life with a corporate entity's existence.


Yes. But that’s not the point. The point is that the leverage of both parties entering the negotiation is in most cases very skewed.

digression: What an interesting non-news news site. If you want to give the impression that you are a 'fake news' site, this might be one way to do it. No contacts have been filled out, the site has been under reconstruction since 2013, and the stories don't have bylines or other information that would let you know who wrote them.

That said, it would not surprise me in the least if people felt bound by such contracts because they are at an extreme disadvantage when it comes to litigation. I did not see the call for better unions at the end (I may have missed it) or legislation that would provide a financial defense for people improperly accused of violating an unenforcable contract (something like an Anti-SLAPP law[1] for working contracts)

[1] http://www.casp.net/california-anti-slapp-first-amendment-la...


As others have mentioned it doesn't matter whether or not the contract is binding. The fact that the company could use that contract regardless to take someone to court and drag their reputation/banking accounts through the mud is the reason why they exist.

It's intimidation.


Are they enforceable in New York? I am finding conflicting information in Google.

The default in California is not to enforce non-competes, but there are exceptions [1]. The default in other states is to enforce them, but there are exceptions [2].

[1] For example, if I sell you my business and agree to sign a non-compete that I won't then turn around immediately and compete with you, these non-compete agreements will generally be upheld.

[2] In most states, courts have latitude to decide on what counts as "unreasonable". For example, a non-compete for a janitor at a Fortune 500 company probably won't be upheld. An executive's non-compete at the same company probably will be. But there's a lot of gray area in-between.


In general, restrictive covenants are enforceable in New York to the extent that they protect the employer's "legitimate business interests". The leading case in NY last time I checked, a few years ago, was BDO Seidman, if you want to look that up on Google scholar.

Usually if there's a noncompete case, there is also a trade secret misappropriation claim at the same time. So unfortunately there is little chance that a complaint based on overly broad noncompete would just be dismissed as a matter of law in NY, regardless of how stupid the thing is.


Here's another case.

International Business Machines Corp. v. Papermaster

https://en.wikipedia.org/wiki/International_Business_Machine...


Oh, that's a good one!

In general, if they prevent you from working in your profession, they are unenforceable in almost every state. This is for the simple reason that it is against the public's interest to have you on unemployment, and the state cares more about its coffers than business interests.

This is as an employee of course.


Can we have

#include <stdcontract> #include <boost-clause>

int main() { specialCase = "we fire you for any reason whatsoever and eat your baby"; return 0; }

And then it's much more clear? More directly, can we have libraries of contracts, i.e. convert spaghetti legal code into properly factored legal programs?

Or are we doomed to copy and pasted, IOCC winning EULAs that say that you can only use Apple if you don't nuke stuff.

Dude I just want to program a thingy, without reading 1000 pages of "WE OWN YOUR SOUL", trying to figure out which percentages of my soul may or may not be enforceably eatable.

Fuck off.




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