Idaho has made it easier for companies to enforce noncompete agreements
nytimes.com
nytimes.com
Don't allow yourself to be pushed around. If you aren't strong enough mentally yet to do it for yourself, do it for the other people in the field who aren't strong enough.
If they offer to pay you to train your replacement, tell them to pound sand and walk out. Be prepared financially.
If they try to force you to sign a non-compete, be willing to walk away until they make it fair and reasonable.
If they try to get you to sign away all your IP, tell them no.
Companies don't expect you to read that contract you are signing, and most of them just pull a boilerplate contract off the internet. Almost all of them are grossly one sided to the company. This includes taking ownership of anything you've developed in the past on your own.
All of this is easy if you have 4-6 months of income saved up. You are in high demand; companies will wither on the vine without good, efficient systems running them. Now, but even more so in the future.
maybe. it may just be people willing to sign one-sided agreements are in high demand.
If they go through all the trouble of recruiting you, interviewing you and deciding they want you, they'll be willing to consider revising it, especially since they probably didn't give it much thought in the first place.
Just raise your concerns in an intelligible way and don't be an asshole about it. I just did that for a contract. I said, "I can't give you all my inventions, I have a ton of them." They didn't even realize that was in the contract and they revised it. Poof. I got a fair agreement.
You have to ask yourself, is working for that company worth giving them explicit rights for all your prior work you've done for yourself? That's exactly what they are asking for in most cases. Let's say you make it big with something you wrote before you even started working there and they find out. They can take it right from under you if you sign that contract without exceptions. Just know what you are getting into and what they are really asking you to commit to.
I actually left a job because I wanted to start a new project and I had signed a similar document without an exception. I didn't want them to have any claim with the IP. Also know, any investors will probably shy away from you if you've signed away your IP rights like that.
I worked for one of those companies once. He apparently didn't read his bank statements either, hence I didn't get paid for a significant chunk of the work I did.
Nobody before or since has acted surprised about the contents of their own contract. I'd view it as a major red flag.
Except for the non-compete clauses. Those are materially important and likely to affect a large proportion of total employment contracts (whereas IP clauses are rarely relevant).
1. Those 401K's and IRA's have a yearly cap, so anything above that cap doesn't apply. 2. Saving your "rainy day" account is a one time thing. Once you reach 4-6 months of income, you are done. 3. Like we agree, you can put it in a non-tax sheltered fund.
Also, not sure if you are going to get 8x return in 30 years. Maybe 50 years ago. When I was in college you could expect to double your money ever 7 years. I don't believe that's still the case.
https://www.texasnoncompetelaw.com/articles/noncompete-agree...
Idaho is cheaper than Texas. And no, Texas is not 3-10x cheaper than even California. In addition, you get paid less in TX than in CA.
TX doesn't have state income tax, but CA does. TX has close to the cheapest fuel prices in the country while the bay area has the most expensive fuel prices in the country. Food costs less in TX and there is no sales tax on retail food purchases in TX.
Yes, you get paid less in TX. For an average software developer you tend to get paid about 40-60% less. Since the cost of living is probably 3x more in CA getting paid a little less in TX still puts you at a huge financial advantage.
I am not guessing at this. I am looking at the numbers and performing very simple arithmetic.
Gas is more in CA (2.89) than in TX (2.03). Our property tax rate is 0.81%. Yours is 1.90%.
The #1 employer in TX is Walmart. In CA it's UC. Not that that really matters. [1]
You haven't shown that the COL is 3-10 times higher in CA than in TX. A reliable cite would help. More, yes. 3-10 time more? No, that's not even remotely true.
[1] http://www.marketwatch.com/story/these-are-the-largest-emplo...
* I already linked to a site that does city by city comparisons, but there are so many online.
Payscale sure isn't saying 3-10x.
http://www.payscale.com/cost-of-living-calculator/Texas-Aust...
If you move from San Francisco to Austin TX, you can take a 45% pay cut and live the same, I don't think this accounts for income tax which comes out to probably brings it to a 50% pay cut.
So I would say 2x
What if you worked for some huge conglomerate like GE. What industry does GE not compete in? Or Microsoft? Walmart? Amazon? Also, their duration is typically 2-4 years. So you can't work in any major industry that GE competes in for 4 years and you get zero compensation for it. How is that anywhere close fair or reasonable?
Non-competes also include no hiring. That further limits my potential employment. If me and my buddy quit because we're sick, or bored of a place, we can't hire either other or recommend hiring each other for 2-4 years.
Guess what? If you have people who can't find employment and a good chunk of their opportunity is blocked because of non-competes, guess who pays for it?
Also, here's the crux of the hypocrisy. Companies are all about free market, but only when it benefits them. In a free market, I should be free to work anywhere for anyone. The only restriction would be not to divulge IP or trade secrets. I'm perfectly fine with that, but chances are, that's not what you are signing.
I was young and naive. I am not that young anymore but I still think this needs to be a nationwide law. If you want me to not work (in an industry) for a particular length of time, you ought to pay me to not work about as much as what I would have made by working. Sure, put a ceiling at 50x minimum wage (so currently $725k a year https://www.google.com/search?q=7.25*2000*50 ) or something but this is just common sense that if you want to prevent me from working, you should pay me for the duration that I am not working.
Given the court and arbitrator's lack of expertise, we see companies arguing that any software work at all is competition. Especially for emrging high-demand fields like machine learning.
Yeah, that's the issue basically. These things (and a lot of the golden handcuffs companies, especially inexperienced startups, like to slap on new employees - as if they didn't know any better) go way farther than anything remotely reasonable.
The end result being to discourage genuine trust and collaboration, rather than to foster it.
But there is also a larger question of why we allow them at all. They seem unconscionable in any industry. They're roughly akin to suggesting that if you train someone you own rights to their training.
You will get no more of my time: http://gawker.com/378444/did-you-sign-googles-noncompete-goo...
You couldn't even say, "Please" or thank me for what I've offered you thus far. Is common decency not part of the cultural consensus where you're from?
I can't really figure out why you would. They only benefit very large organizations attempting to stifle competition and drive down skilled worker wages. Smaller companies can't really afford to consistently enforce them and lots of smaller companies use open moonlighting agreements and a lack of no-compete as a selling point.
But I also don't care. I am not obligated to convince you. Nor am I obligated to pay your little shufflepuck game that ultimately ends up with research behind a paywall you will refuse to follow.
This story: your tactic. It's not new. It's old. I've seen it done before, I've seen it executed better as well. There is nothing more telling than looking at an obvious example of abuse sourced off a reputable news site and saying, "But this is an anecdote and I wanted data."
I am sure you will post protestations about how unfair this is. And it is, somewhat. You bear the burden put upon all anonymous accounts before you. But to be honest, given your complete refusal to even google something and count the results makes me think you're actively defending this practice as opposed to genuinely curious.
In the artist metaphor, I also assume that it took a non-trivial amount of time, say a year.
It's not "violent". It's the exact opposite of that, in fact.
This is pretty strong empirical evidence that although enforceable noncompetes may be better for existing companies, they are a drag on the regional economy.
(Taking your current employer's clients is not exactly the same thing -- IANAL, but I would think that would be covered by the trade secret protections.)
Haha. Okay that's seriously ridiculous. I'd have a field day berating any org that tried to push that on me.
> ... and any created during employment regardless of whether or not it was written for the company or on company time.
I'd disagree with you on the non-company time. Depending on the nature of the work whether it happens on the clock or not isn't clear cut. Hence the default of the company owning everything while you're doing work for them as an employee.
The best defense for this as an employee is to get a written exemption for anything non-company related that you're working on, or a generic exemption as a matter of company policy for things like off-clock FOSS contributions.
Just about every large scale FOSS project requires contributors to attest to IP ownership and assign copyright of contributions. Most also explicitly ask if your employer has granted you permission to offer you contribution. There are many stories of projects that don't do this trying to track down individuals years after the fact to facilitate relicensing.
Now in a more specific work for hire (i.e. contracting / consulting) situation, it does need to be tightened to reflect the actual work at hand. Otherwise you can't work on anything else
> I'm surprised they didn't include any future IP as well.
Be even funnier if they did and also required to actually create some too. Instead of a golden parachute it'd be lead anchor.
That's the real issue. Spolsky wrote up something on that a few years ago. It went along the lines of if you were being paid to create and build apps for a company and after hours you developed your own killer app but kept it for yourself, that wouldn't be fair to the company employing you to make great apps for them.
That makes sense. I also think any company that expects 100% of your IP during employment should pay you more than what they would pay someone to work 40 hours a week.
It doesn't make sense for niche software companies trying to take your IP for completely unrelated ideas that they would never use in their product line, particularly when you are working on your stuff after hours.
Successful enforcement is almost always a question for a court to decide, and many times an employer simply won't bother trying, but provided the employer can demonstrate a business interest to protect, the restriction isn't too widely defined and that the time scale is not "unreasonable" they stand a good chance of succeeding. I'm by no means endorsing this - it simply is what it always has been in the UK for a long time now.
I did sign. It was actually written narrowly enough that I didn't expect it would be a problem. And it wasn't when I left fairly shortly thereafter.
In practice all this does is increase leverage of employers over employees while stifling growth by discouraging cross insemination of ideas between corporations.
The only winner is the employer who would fail to keep his employees through offering a good workplace.
Serfs were legally bound to the land on which they worked but could not own. Aren't non competes nothing but just a step towards serfdom?
Maybe. Maybe not. Here is a mental exercise for you.
Suppose that you meet a cofounder with a fantastic idea, that requires a modest amount of research to work the kinks out of, and you bring almost zero value to the equation other than having the vision to know that their idea is great - and of course, your willingness to work 100 hours per week until you're both rich off of it. They bring almost all of the value to the equation and have a great resume and background and degrees in that field. You're a code monkey or something. maybe you're a good one, but you certainly don't do the work of fifty or a hundred engineers. maybe 3-5. sometimes. you're nothing special.
so you enter into a contract with your partner under some terms, doesn't really matter what. you're cofounders.
Now here is the question: what is the outcome for you if as you begin to prove the technology together your cofounder gets a fantastic, amazing offer from a huge mutibillion dollar company, for millions of dollars, to leave you, join them, and compete with you. They don't want you, you don't add any value. Your company doesn't have any assets or IP. They just want your cofounder to go leave you and compete directly with the company you poured a lot of time into together and co-own.
if your cofounder does that, then this is awful for you. you've just wasted whatever time you spent working together as you don't bring all that much to the equation. your company becomes non-viable.
So how do you avoid this? Well you can trust each other: you can straight-up say at the start of the partnership, hey (cofounder's name), I know you bring a lot more value to this venture than I do and I am honored that you are letting me help you bring this to market. Before we enter our partnership, will you PROMISE me that you are not just going to leave and start directly competing with us?
Your cofounder says, sure, okay, I promise.
If they're a person of their word, this effectively solves the problem you had been having.
The thing is, this is a non-compete agreement. That's literally what it is. The legalities don't matter.
Do you guys think this agreement is "wrong"? After all your friend is severely constrained and must refuse offers of millions of dollars to leave your joint company and compete with you, if they keep their word....
I am not asking about whether courts should enforce these contracts. I'm asking whether the agreement itself is something that is wrong to enter. Is it wrong to ask for and receive that promise?
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EDIT: Despite my very clear signposting, a lot of people are misinterpreting this. I was asking what you all thought about the morality of such an "extreme" example. I did not include any value judgment.
There's no need for a non-compete here.
The cofounder doesn't need to bring anything with them to the company that wants to acquire them. I was super-clear on this point.
This is IP.
There's no IP from simply seeing if something works, if that is not subject to patent protection and you are not pursuing a patent strategy, and you don't bring any of it over with you to another company.
The know-how you acquire from having done it before (and which would make your cofounder likely to be hired away to compete with you) is also not "IP".
Quite simply I am asking you to assume the time you put into the joint project is not subject to patent protection and you are not pursuing a patent strategy, and to assume that there is no IP at the company that the cofounder would take with them.
Under this assumption (which is realistic) I asked you to make a judgment about the morality of the promise you solicit and receive from your cofounder not to go off and compete with you.
My question is quite narrowly phrased.
I get what you're trying to sketch out, but it's a very very narrow "just so" scenario.
Trade secret.
http://www.nolo.com/legal-encyclopedia/california-trade-secr...
I wonder, could something very small be subject to trade secret protection? I'd like your take on the hypothetical written below, simply because it is so small.
I really hate using the example below but I think it's well-defined and wouldn't really be subject to any trade secret protection and I'd like your take. (I reread my example and imagined it from the perspective of a woman and I think I could have written the same thing so I think it's not a gender-biased example but I will attempt to redact it if anyone complains.)
So for the hypothetical: women and men use dating apps but when I tried it some time ago I was floored that the people I met with actually had met tons and tons and tons of people. (As opposed to entering a relationship after meeting a few people.) I thought, far more than the number of dates the people I interacted with in day-to-day life go on.
My personal conclusion was that there is a "dead sea" effect on dating sites where people who are actively looking and really looking for a relationship end up leaving (because they enter a relationship), whereas the people who have been on 45+ dates in the past 180 days via the app are (this is a judgment) are kind of wasting each other's time from my perspective, maybe don't really have any intention to enter a relationship: they're not "really" in the market. So they will report things like "I've met dozens of women/men" (if they are being honest) " but I haven't really found the right one." Whereas in the old days grandparents met based on just having anything in common and living on the same street. their standards weren't so high and they wouldn't date 50-70 people before finding someone.
So now let's suppose that I figured out that the way to quickly get people in relationships is if I only show new users to new users, and the "time-wasters" to each other. Then I can make my app the best way to get people into relationships very quickly (after meeting just 1-5 people), whereas ordinarily to get to those 1-5 people you have to work through 45 people who are clogging the site with 0.0% chance of entering a relationship. (Because of the dead-sea effect we posit.)
So meanwhile the time-wasters of both genders only see each other and go on hundreds of dates with other people who have no intention of being satisfied with them. I wouldn't let the time-wasters waste any of the "genuine relationship-seekers" time by being shown each other.
Okay, so let's suppose for the sake of argument that this is the magic holy grail and that this tiny little insight makes all the difference. Let's just posit it.
So I apply it in secret and this one neat trick makes it the best dating app on the planet. Okay, so my question is could something really, really tiny like this which is described in a few words and is a single metric only, be something that could be covered under "trade secret", assuming it falls short of patent protection?
My hunch would be no, because even if it's valuable, any other company could come up with it. What do you think? Please assume that my example is really true (it could be false.) I'm not that attached to this example and have no intention to test it or enter that market, so it's one I can gladly sacrifice for the sake of argument. Let's not argue about the merits of the example but simply assume it is true - that it's the entirety of our advantage and as soon as other sites figure it out, we are no longer competitive.
Would trade secret apply to something extremely tiny like this? Almost a casual observation? Thank you!
The paradigmatic case that California allows is: You own a restaurant that builds up a good reputation. You agree to sell it, with a condition in the sales terms that you won't open a competing restaurant within X miles for Y years. In large part what the buyer is buying here is your existing reputation and customer base, so you agree to a noncompete to facilitate selling these intangible items, which are more valuable if the buyer doesn't have to worry that you're going to sell the restaurant but then turn around and open a near-identical one to try to keep the customer base.
If I did open up a competing restaurant next door as soon as the ink was dry on the sale agreement, I think it would be on you and your lawyer not to have covered that eventuality. (Though it would also be kind of sleazy of me IMO.)
For every one possible situation in which non-competes might be good for employees, there are hundreds of situations in which they are outright bad.
If the other guy does not bring that much to the equation then it might be he was not that valuable after all.
Both guys lose if they need to duke out their differences in court, IMO.
I am against placing the burden of proof on the employee. I am more so against cementing these restrictions in laws. It would be ok with me to allow someone to enter into whatever contract they want, but this feels like a continuation the big bank bailouts and the auto bailouts just in miniature.
Don't we need less laws and more comprehensible contracts to create a more level playing field. Can't we refactor the law instead of implementing these "duct-tape" fixes which only restrict the liberties of hard-working, law-abiding citizens?
I suppose this is one of those laws I really need to look into. NDA is one thing...but being sued for doing what I already did as a company...or contracting to another company (competitor with differing tech for instance) would put me out of business.
There is a group of people who are putting a lot of work into driving the startup scene to my area (Coeur d'Alene/Spokane) but I feel this may hinder the companies...although...it might be beneficial for the people who are actually folding the cash at the end of the day.
Any insight from those more experienced would be helpful.
edit: Not that it should matter. But my bread and butter comes from remote open source/openhardware projects. The locals are the only ones who have ever required an NDA.
The ideal would be that you build up your business to the point that you can either simply decline to sign NDAs, because you have plenty of customers who don't ask you to, or at the very least can negotiate very specific NDA terms that won't be a problem for you. But again, to do that, you'll probably need some legal advice. The simplest thing is not to sign them at all.
> An indentured servant or indentured labor is an employee (indenturee) within a system of unfree labor who is bound by a contract (indenture) to work for a particular employer for a fixed period.
Indentured servitude: you either obey the contract, or go to jail.
Non-compete: you either obey the contract, or go work in a different industry (in effect, become poorer, since you have to start over).
Even employers who are restricted from hiring will benefit in the form of lower wages and a more pliable workforce.
To say nothing of the opportunity costs of the lowered economic output.
The question, "Do I even want to work in Idaho?" Has got to be raising itself to employees and prospective employees already. Do you want to add another reason to make the easy answer no?
Meanwhile, you're amassing a stockpile of unhappy employees who don't want to be working for you but feel they have no choice. Do you really want to grow the number of employees you have who are trying to do the minimum?
Nitpick, but: Idaho's largest component of the economy, as well as its largest exports, is technology and not agriculture. It is more of a tech state than an agricultural one.
(Sorry to all Idahoans who don't want this publicized!)
Also, Idaho is a Republican state, so you naively expect they'd be all rah-rah free market and competition, but this appears to just be pro-big-business and actually quite anti-competitive.
I personally do not think this will have much of an effect on the "startup scene" because the vast majority of the people working at companies that would possibly enforce non-competes such as Micron or HP do not come to work at "startups", because of performance on skills-tests or cultural fit.
I've met a lot of the leadership for various startups in the Treasure Valley, and suing someone over changing employers would be the antithesis of the values they hold, there is one exception I could think of - BlackBox VR (very early stage) somebody leaving them for a competitor could be pretty bad!
I have met startups brag about losing employees to Amazon and Google though.
Idaho has only one meaningful tech company, and it's mentioned multiple times in the article. Analysts say its overpriced and due for a fall. It's a company that hasn't had much real innovation for a long time. Not surprising given that it is headquartered in a anti-innovation state that no highly qualified engineer in his right mind would move to due to the toxic legal environment for technologists.
I fall on the side of "noncompete clauses are stupid." Provide a better job or GTFO.
In addition, even if the employee/ex-employee is willing to risk it, lots of potential new employers aren't. I worked for a small firm for a number of years and we wouldn't even entertain having discussions with someone if they were bound by any remotely relevant non-compete.
Source: I've lived in Boise all my life.
1) Unfamiliarity with the law. People moving from states which protect the marketplace for employment from non-compete abuse (e.g. California) may not realize that such "agreements" even exist. I didn't, and was pretty surprised by them when I left CA after 7 years in SV.
2) Being required to sign a non-compete _after_ you've already begun the job, which is (AFAIK) legal many places, though I don't know about Idaho.
3) Asymmetric power in the "agreement", especially when larger employers (with legal departments) are involved. The scare quotes are there because the parties agreeing to the contract are not negotiating from comparable positions of strength, so I think the word "agreement" is a post-truth-type word.
IMO, a free market won't remain free without public policy support. I guess Idaho prefers a different sort of arrangement. That's their choice. Welcome to my personal blacklist, Idaho.
Banning predatory provisions, especially non-competes, as California demonstrates, really helps develop the economy.