I’m an AI consultant, client wants me to sign a non-compete

[sotergabor]

I’m working as an AI consultant and I have a client who wants me to sign a 3-year non-compete that would not let me use any of the generative AI technologies they use in any other commercial or research projects even if it doesn’t compete with theirs.

Obviously I can’t sign this contract. Has anybody come across something similar to this? If so how did you handle it? How common is this?

[JediPig]

I had this happen a few times. My response is, you have to pay for 3 years at the rate. It does not mean you work 3 years, you are paid for the contract,6 months,etc.

What happens, I had two say no way, one said yes. The two said no way, you move on.

[nameseemslegit → JediPig]

I once negotatied something like 2x base rate for the duration of the non-compete period, and ended up accepting the offer. It was more than a decade ago, so the details are fuzzy now.

One of the nice features of this approach is there is a clear signal about whether the company intends to enforce the non-compete that does not require negotiation after parting ways. If they are not paying you, the expectation is that you have the ability to compete. From what I have seen, the uncertainty involved in non-competes (will it be enforced this time?) has a large part of the chilling effect.

[brudgers]

Your business is to deliver value to your client in every way except saving money on your fee.

So you can sign it just like any other contract.

But you must first decide what it is worth, put a price on it, present the number to the client, and get back to what matters.

Sales.

Good luck.

[Jugurtha]

You narrow it by sector, geographic location, and time.

I had an organization that said "money is not a problem, we'll pay what it takes to get what we want. Obviously you'll want to make up for opportunity cost and that's fair game. You'll be paid in currency X (non-convertible currency). To make it up to you for this limitation, we'll pay a premium. We want to be able to sell it to clients".

Negotiations went on to limit the sectors. I had architected the product so we would be capable to build other products, so it was fine. They had carte blanche from the highest levels of government.

The point is, the conversation was courteous and for every one of their asks, they'd add something along the lines of "you'll obviously be compensated for this ask as well" so they didn't even wait for us to feel we were taken advantage of. They were not predatory or haggling, and just showing consideration went a long way in how I perceived them.

[orzig]

As a technical expert, it would not be unreasonable for you to counter propose a more narrow definition of the technology that would qualify. Either you come to an agreement about something that would not overly constrain you in the future, or maybe they realize that they are being ridiculous and it is not worth spending more time on iterating some paragraph that some lawyer threw in there because they were feeling feisty when they wrote the first draft of the standard contract

[ipaddr]

You walk away. If you take it, it will be held over you and it will force you to change industries because 3 years removed is like starting over again.

[more_corn]

I’ve had good luck having such things removed. Just tell them, mark up the contract and send it back. Non competes are not legal in a lot of places. It’s perfectly reasonable to ask for them to be removed.

[diffstrokes]

This seems somewhat standard. The company is trying to protect its IP (and probably overvalues it). You could try to negotiate a lower term or change the language to carve out generative AI that wouldn’t compete with them.

[eesmith → diffstrokes]

Three years is not standard. 1 year is far more often in my experience.

Don't need to trust me. https://legal.thomsonreuters.com/en/insights/articles/the-ba...

> As for a time limit on a non-compete agreement, most employers see between six months and two years as a reasonable non-compete time frame, with one year being quite common. However, the time frame depends on the industry and type of career path the individual has. But the longer the duration of the non-compete period, the more likely a court will deem it unenforceable.

In California non-compete agreements are not allowed, and some other state have a hard limit on the length, eg, 1 year for MA - https://www.katzlawgroup.com/non-compete-agreements - and 2 for IL - https://www.navigantlaw.com/non-compete-2-year-rule-long-wil... .

To be sure, these examples concern employees, not contractors, but I doubt it differs. OP should check if 3 years is even legal in their state, and regard this as a bad sign about the client. It means they want to play hardball, so you as a client will have to be on your toes and play hardball too. Which I don't think is fun.

[didgeoridoo → jklein11]

I am this close to asking for a hard ban on users who drop GPT-generated content here. It adds nothing to the conversation and is just shallow word salad half the time.

[NicoleJO → didgeoridoo]

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