Ask HN: programmer asked to sign 2 year non compete being 3 years full time.
10 comments
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.
- 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.
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.
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.
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... : "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
Personally, I would treat it as a salary negotiation and ask for "garden-leave." See http://www.employmentlawgroup.net/Articles/ROswald/Defending... : "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
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.
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.
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.
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.
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?
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?
They are getting their ducks in a row for some specific reason. Are they being Acquired?
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.
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.
He should consult a lawyer and do so, if possible, before signing the agreement.
How about that the deal is void if the company lets him go.
> 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.
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.
what would you do? is it reasonable/normal to negotiate for some additional perks given this new very uncomfortable position??
thanks.