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Confidentiality/Non-Compete III

Part 1
http://discuss.fogcreek.com/joelonsoftware/default.asp?cmd=show&ixPost=155610

Part 2
http://discuss.fogcreek.com/joelonsoftware/default.asp?cmd=show&ixPost=158933

I've been pushing back on this agreement for a long time & have been reading up on my rights. He keeps trying to get my comments on the agreement so he can pretend to revise it and ask me to sign it again. Every time I do I get caught up either in hating the agreement so my comments all end up derogatory and inflammatory, or reading up on contract law. Either way, I don't bring in the revisions the next day (lazy me, I know). He told me I'm taking this thing too seriously, and anywhere I go I'll be asked to sign the same agreement. I read up, approximately 30% of employers are asking their employees to sign such an agreement now, and 50% are asking their employees to sign a confidentiality agreement.

He's also given me 3 different reasons now for wanting me to sign this contract, and I told him so. He assures me that the final reason he gave me is the real reason, but I'm still waiting for reason 4.

Some intersting information turned up on the web at these websites:

A 1 year old NY State Supreme Court Case that threw out a non-compete because they couldn't prove the employee was using trade secrets at his new job.
http://www.nycourts.gov/comdiv/Law%20Report%20Files/October%202003/East%20Coast.htm

An article in Forbes magazine defending non-competes:
http://www.keepmedia.com/Register.do?oliID=225 (free registration required)
I disagree with this article because a non-compete can also cause your employeer to pay you less over time, because it's harder for you to jump ship operate in a free market & earn free market wages.

Deciphering the Nonsense In Noncompete Agreements
http://www.careerjournal.com/jobhunting/jungle/20040609-jungle.html  (from the WSJ)

The FAQ at MyEmploymentLawyer.com
http://www.myemploymentlawyer.com/non-compete-covenant-FAQs.htm

And lastly
http://www.breakyournoncompete.com/

To summarize my learnings, non competes are invalid in some states, like California, and likely to be turned down in court my state (New York) if it's too general, as mine is, or if the employer can't prove that I'm using their trade secrets at my new job - the burden of proof is on them that I'm actually damaging their business. Perhaps asking him to make the non compete more specific could make the contract more valid in court.

Asking me to sign a non-compete after I started working for him could also cause it to be thrown out of court. I should be asked either prior to employment, or in exchange for extra compensation, but not as a condition of my employment once I'd already joined the company.

However, that doesn't prevent them from sueing me, and causing me to lose work and lose money to legal fees. Just look at the case that went to the NY supreme court! That sounds like a lot of legal fees to me.

I should push back & ask for compensation during the non compete period as long as I wasn't terminated for cause, or left voluntarily, if it's so important to them, they should pay me.

Lots of people sign such agreements gambling that the employer would never pursue legal action, but that's a big risk & it's better to push back & get an agreement that's more amenable to your needs.

I definately need to talk to a lawyer experienced in employment law.

Anony Moose
Thursday, July 22, 2004

You have some good links. I agree with the FAQ you posted:

Q: I am in the process of negotiating a non-competition agreement.  What should I ask for?

A: First, you should ask to limit the agreement to that which is necessary to protect the employer.  Second, if it is necessary to prevent you from working for a period of time in a highly specialized industry or occupation, ask for severance payment in the event of an involuntary termination that is not for cause.  If the employer really needs this protection, it can pay for it.

Q: What if the employer is not reasonable?

A: Consider working elsewhere.  Before you sign away your freedom to find other work, make sure that you receive fair compensation, such as training and new contacts or severance pay.  If the exchange for the restriction on your right to compete is not fair, find other employment.

However, you are being a bit negligent by not providing your list of complaints to the employer as he requested. I know it is frustrating, but just bit the bullet and do it. Invite a friend over for dinner and let him review it for tone.

It's also unclear to be if you are working for him right now. I thought you were not, but you sound like you are. If this is something that has been an issue since you were hired though you can't really claim he is asking you to do it after your employment.

Dan Lisbon
Thursday, July 22, 2004

Moose, I notice that you provide a link to 'breakyorcompte,com' (deliberately misspelled for reasons to be obvious).

On their site, they state that by simply visiting their site, you are agreeing to a legal contract that states in part:

> You are permitted to provide links to this site provided that you notify us before you activate such link by completing the comment form and in no way obscure or remove the page headers, the copyright notice, the Visitor Agreement, or any other notices herein. You also agree to discontinue linking to this site if we so notify you.

By linking to them, without complying in advance with their requirements, they state you are in contractual default with them and liable for damages.

Of course any legitimate attorney will tell you that that is absolute bullshi and makes a strang case for avoiding both their site with its crackpot legal advise as well as the sites of anyone recommending or linking to them, such as the faq site.

I am not a lawyer and this is not legal advise.

Dan Lisbon
Thursday, July 22, 2004

I just don't understand why you are continuing to post on this situation. Yes, I want to see the post where you tell us what you decided and how it worked out. But you keep posting minor updates on this situation during with nothing happens. It's like Waiting for Godot.

It's pretty obvious that if you are still having problems with this guy you need to stop wasting your time and get on with your life. There's nothing more to be decided, nothing more to be negotiated. Disconnect your answering machine and move on. Good luck.

Jacob Bartleby
Thursday, July 22, 2004

If he wants a non-compete in a highly specialized field, I would ask for severance to cover the period you can't work. No matter what the cause of dismissal.

Or, bite the bullet and tell him you don't want to sign such a thing.

It sounds like he won't give up on this issue, so its time to poop or get off the pot.

Peter
Thursday, July 22, 2004

I always thought that an agreement was valid only if there was CONSIDERATION given to both sides. I.e., he asks you to give up a right, he should be giving YOU something, like a bonus or the above mentioned severence.

I'm not a lawyer but I've seen one on TV.

Mr. Analogy
Thursday, July 22, 2004

In relation to the issues you are facing, I've said it before and I'll say it again.

If you're having to go through this much aggravation prior to actually working for this crowd would it not set alarm bells ringing very loudly? There must are other gigs out there that you can chase which won't make your hair fall out or cause you to lose sleep because of NDAs.

Apologies if this isn't what you want to hear.

TheGeezer
Thursday, July 22, 2004

A short list of complaints you can give the guy:

* You're not negotiating in good faith, so I don't see any reason to keep giving you counteroffers, any more than I'd counteroffer if you bid $1 to buy my house.  Call me when you're serious about doing business.

Then *walk away*.  Don't call, e-mail, write, or talk to the guy again, unless he contacts you with something that shows he's serious about the deal.

No other course of action is going to move this forward.  So long as you show willingness to be "reasonable", he will use your interest to wear you down, and you will eventually give in more than you mean to.

(I'm assuming, of course, that you've already told him what would be a satisfactory arrangement for you, and he hasn't moved on it.  If you *haven't* given him a proposal for what would satisfy you, then this is all *your* fault right now.  :)

Phillip J. Eby
Thursday, July 22, 2004

I'd have walked away by now.  I admire your efforts at working out an agreement you both can live with, but this looks to be going way, way too far.

In my experience, when someone puts forth a significant amount of effort to lock you down, they generally have an ulterior motive - one that they want you powerless to object to.

Is this the only iron you have in the fire?  If not, just walk away and see if he becomes more reasonable.

Norrick
Thursday, July 22, 2004

It sounds like you might be on the wrong side of a power relationship. Your employer/customer sees you as an inferior and refuses to recognise your right to change things.

There is only one way to fix these situations. Tell him it's over until he sorts things out and then leave. Go do something else. It sounds like he needs or wants you, so it's up to him to respect your requests. He will be astonished, but it's a way of making him understand.

Inside Job
Thursday, July 22, 2004

My advice would be to punch this prick in the face and then take a piss on the non-compete contract.

Mr.Fancypants
Friday, July 23, 2004

You have to ask yourself why this is taking so long.

If you both wanted this agreement it would have happened by now. For whatever reason, it hasn't happened.

Back off for a while. There will be other deals, go and find them. Who knows, maybe you'll find something bigger and better. This guy is not the only show in town.

Nemesis
Friday, July 23, 2004

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