How a Legal Journalist Got Fired for a Non-Compete

At that point, it's really up to you to weigh the specifics of the offer and the drawbacks of any contract terms they won't budge on.

Hiring is fairly expensive, and if you've gotten to the point where you've got an offer along with a contract you're fairly far into the process. You don't have a ton of leverage, but you definitely have more than 0 leverage.

Your leverage is you can decline the offer.

I had, btw, a former google manager who got funded by a16z slip a clause into an offer agreement that said if I conducted any business on my personal media device (ie phone), they had the unlimited right to search it on demand. Obviously there was no way I'd agree to that, so putting work gmail on my phone was right out. But what if texting me on the weekend meant conducting business? They'd also left in language backdating the employment agreement (presumably because it was an update for existing employees), so as written it would have extended to before our phone screen... which I took on my cell phone. I don't work for them because the ceo said his lawyer insisted on it, I responded that the lawyer works for the ceo (not the other way around), he said blah blah blah, I told him he was a liar. The clause was on him and if he wouldn't forgo it he should at least have had the integrity to stand up and say I want this. And that was that.

I've also lost a job in nyc at the written offer stage because new company's counsel determined it would have violated my noncompete with old employer. These aren't empty words you're signing. CA mostly bans them and it's really important to employees, because right or wrong, you really don't want to get caught in the middle of a pissing match with people who have company-funded lawyers.

In spite of the various folks on here saying you "should never sign a non-compete" that's bench advice that isn't necessarily especially helpful. In my case, quite a few years ago my company was acquired by another (MA company that is very pro non-competes; you can probably guess who if you follow the space). We were given non-competes to sign (that, in my case at the time wasn't really very restrictive).

We had a choice of signing in the sense of we could sign or we could walk out the door. Perhaps I could have walked out the door for abstract principle but, frankly, that wouldn't have been very sensible.

This practice needs to die. Immediately.

I know that some uk employers offer them to all outgoing employees - makes me think they have something to hide.

Sometimes this works and sometimes they'll insist anyway. In the latter case, you can run away knowing you dodged a bullet.

Enforceability is only one (small) dimension of the problem - arguably the chilling effect it has on future employers (who simply don't want the show up in court, even if they will win) is larger.

The threat of litigation is often stronger than the litigation itself, especially against smaller entities. Overly broad non-competes are more a bullying tactic than they are an actual contract.

If we required this to be an adult that the world would be full of children. Granted, I personally want this. I would like to make 'I didn't read/understand the contract' valid reason to break a contract unless the other party could prove with clear and convincing evidence you read and understood the contract... but I realize this would bring our society to a halt and would require a significant rework to fix. We live in a society that abuses consent and to swap to one that doesn't will not be an easy task.

You would think so -- but many companies apparently expect that none of their candidates will really read (let alone think about the consequences of) the employment terms they're expecting them to sign.

As if they'd basically prefer to hire children.

It is, but in practice I don't think it's as straightforward as that, because:

1. There can be a presumption that the contract will be fairly written. Some of my recruiting employers have behaved as though they have your best interests at heart, which could lull you into a false sense of security. [A]

2. As you mention, it can seem that the decision is strictly yes/no. Corporate EULAs fall into this category - you either agree to abide to the terms of huge piles of legalese, or you don't use the software. I admit that I just agree to all of these. Even if I did read them and find a clause that I wanted to negotiate, I don't know how I'd even begin to broach the subject with an Apple, Microsoft, Adobe etc. And a similar situation exists in employment contracts, where someone who is desperate to accept a job offer (e.g. at a big uni or company), and they may not know that the terms are negotiable.

3. People just may not be aware that there are really long term consequences, such as the non-compete clause in the OP. I certainly didn't know about these sorts of issues before I worked in the Bay Area.

4. Some of the more restrictive legal clauses may be quite innocuously or confusingly written, and therefore require a lawyer with relevant experience to spot. So even if a layperson is being diligent, they may still fall afoul of something dodgy.

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[A] Quick aside. One startup CEO gave me such a contract, and when I verbally raised some issues, he just laughed them off and said they were typical boiler-plate legal language, and said that none of this would ever affect me. I was on friendly terms with the CEO and was therefore ready to accept those assurances, but my wife wouldn't have any of it, and she urged me to make some modifications.

I just looked up the email thread where my wife and I discussed one particular startup employment contract. It featured a section on intellectual property rights, where if you didn't complete an additional "Exhibit A", you were at risk of giving the company free licensing rights to anything you'd worked on in the past.

Wife: "It should be okay to sign, but not without completing Exhibit A."

Me: "I think it'll be fine, they're nice people, I'll just go ahead and sign it."

Wife: "Wrong answer."

I spent hours working on the Exhibit A, and took it to the CEO the next day. When he read it, he saw red and stormed off out of the office to talk to his legal counsel. The legal counsel came back and said yeah, my wife was right, and agreed to do the changes.

When I joined the company, it turned out I was the only technical person who had filled out that Exhibit. Would this have affected any of them? Who knows, but there was certainly a quantifiable risk involved. I'm certainly glad that I had my back covered by it when the shit hit the fan. The others were smart people who just didn't understand the legal consequences of not filling in that Exhibit.

If you believe that, I've got a bridge I'd like to sell you... Eh? Eh? See what I did there?

Just curious, were you able to buy a car elsewhere without signing an arbitration agreement?

If what you say is true, then you must believe there are very few adults in the world.

Reading and understanding what you read doesn't make any difference.

In the U.S., employers have a lot of power. Workers have none. When every company has a non-compete (or whatever other egregious terms), eventually you have to sign somewhere so you can feed yourself.

"The two companies were involved in a brief legal dispute last year after Nortel announced it had chosen Motorola's former chief operating officer, Mike Zafirovski, as its next CEO. Citing non-compete agreements, Motorola sued Zafirovski in October. The dispute was settled a few days later when Nortel agreed to pay $11.5 million to end the matter.

Under the terms of that October settlement, Zafirovski and Nortel agreed not to recruit Motorola employees."

(Not trying to say this case is anything like that of a much lower-level journalist as described in the article. That seems unfair and harsh)

http://www.infoworld.com/article/2674269/networking/nortel-a...

Obviously, they would only do this in the cases where they are worried that it really could harm their competitive advantage. It would also save companies money in the long run given the number of instances that two companies go to court over things like this.

It very much is important, and you don't necessarily have to uphold it. In the vast majority of jurisdictions unreasonable[0] contractual clauses are unenforceable and may even be sanctionable.

[0] what is or is not unreasonable being the primary variable. CNC clauses are generally unreasonable in california (reasonable CNC are related to goodwill and shared businesses) for instance, and in mainland europe they are limited and often must be compensated for their whole duration e.g. in Germany the leaving employee must be paid at least half their gross salary for the whole CNC term (no more than two years) and unreasonable clauses can be invalidated, lest the whole CNC be invalidated.

This is simply not true. Trivial examples include a contract without consideration, or an apartment lease with clauses that attempt to restrict rights granted by local law (very common in NYC). Most non-competes in the state of California are not enforceable as well, even if you agree to it.

That's frankly a ridiculous idea that clearly leads to injustice. Contracts are often between people who are not equals, where one party has less ability to negotiate or walk away. If the weaker party does not have extra protections outside of the contracting process, the stronger party could use its power to abuse them.

This may be your personal moral preference, but it very much is not an accurate reflection of contract law (at least, not in any US jurisdiction.)

In theory, if trade secrets are already protected, then either the non-compete's are setup as a double protection, or they are only being used to restrict movement. (neither of which seems fair in the economic sense)

For non compete to work, the affected person has to have specific knowledge to protect (usually client accounts) and the restriction needs to be narrow to specific industry ("software" is not good enough, "Point of Sales software for Bars and Restaurants" probably is), duration needs to be only as short as it needs to be and geographically bounded.

The only time broad non-compete really hold up is for things like sales of a business where the founders are barred from immediately competing with the company they just sold.

FWIW I've been under non compete, and a couple of other clauses in all of my previous jobs, but they were never enforced. The legal power of non compete in Denmark is from my observations very weak. So much so, that an employer of mine vaived all clauses after a while since it was a bigger hindrance when hiring people than benefit when people left.

I have similar feelings about binding arbitration, another area where corporate lawyers have gone crazy in recent years.

In a former role, one or two of the larger firms in the space were known for having non-competes they were known for trying to enforce that basically said that if someone left--even if they were laid off--they couldn't do the same type of job for a year. Someone I know who left one of those firms just took a year off before going out on their own. The firm I was at wouldn't even think of touching someone to whom those non-competes applied.

I think there is a big difference here between non-compete and no-poaching agreements. At least yours is tailored to a radius, but I don't know that your narrow definition of non-compete is really the same.

It's not like you're saying you can't get a job or own a gym anywhere on the planet for one year after your resignation or something to that effect.

When I got hired by Microsoft, I was specifically told to get a lawyer to review the contract before I sign it. I did and my lawyer promptly told me the same at the person here, which is that the two non-compete clauses were so broad as to be unenforceable.

When a "partner company" to my MSFT division kept hiring our staff, Microsoft didn't try to enforce the non-competes, but instead threatened to sue the partner if they kept at it.

This sort of thing ought to be taught in high school, along with other basic adult concepts like how to get a bank account, how credit cards work, how to vote, and how to pay taxes.

It's bizarre how such important things are left to each person to learn on their own on an ad hoc basis.

https://goo.gl/Vzq0XG