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Enslaving your interns for evil and profit

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151 pointstghw81 comments

The capstone course at my university, like many others, was to be matched up with someone in the community and be given an actual task from their business, usually with the understanding that we were likely to produce such crappy code that it was going to be discarded anyhow. (Which was broadly accurate.) My group happened to draw a lawyer's office, which wouldn't have necessarily been a problem, except their first move was to get us a to sign a heavy-duty nondisclosure agreement.

The prof brought this to us, and asked us if we were willing to sign this. My teammates were like, "uhhh", and by that point I'd been reading up enough on legal issues on the internet that I simply said "No." At which point my professor said "Yeah, I was just curious what your reactions would be. I was never going to let you sign these. Here's your new project...."

And forget "intern", we were paying for this course! It's amazing what papers people will push at interns and such.

If you're in that position, do not be afraid in the slightest to say no. One of two things will happen: They'll retract their request, or you'll get out of a bad situation before it turns really bad.

A NDA is a much different beast than a non-compete clause. I have signed NDAs to work on school projects before, but that did not really affect anything I did outside of the class project. I don't think an NDA would close off any job opportunities. The subject of the article signed a non-compete clause, which prevented him from getting a good job opportunity. I don't think those have much in common.

You're right in general, but not in this specific case. The NDA was so strong that if read as written it basically forbade us from ever using anything we learned with them, for any purpose, ever. It did not narrow itself down to internal operations.... which we would not have been privy to anyhow! We weren't going to be sitting in on trials or hearing about their cases anyways. It was almost stronger than what you would consider a "noncompete" in that sense.

And since it was a lawyer's office we were little inclined to assume they'd never exercise their claimed powers.

And again, we were paying for this course, not being paid. (In fact their "due consideration" clause alone was a bit amusingly handwavy. It was nearly "for the due consideration of being graciously allowed into their presence to bask in the glow of their wisdom.")

I don't get your point.

Many (most?) companies will get you to sign some kind of NDA when you work for them. I've had interns work for me and had them sign them without problems. You say yours was heavy duty, so maybe there was something unique about it, but otherwise I don't see the problem.

I've never really seen any internet advice saying not to sign an NDA, either. The only related thing is advice not to try and get a VC to sign an NDA - but you are an intern, not a VC, and you are working for the company, not trying to get money from them. That's very different.

A NDA is very different to a Non-Compete.

An NDA for a non-paid position where you give your time and effort to a company sounds like a bit over the top.

If they can't imagine a way to make you productive when you give your labor freely without needing legal representation yourself then they're nuts and don't deserve your gift.

Think of it from the company's point of view. NDAs are actually there for a reason.

(Also, internships are hardly gifts. Making them work takes a lot of effort (and costs) from the company too)

I'm curious how this even came up. Did the prospective employee make the mistake of actively asking the former employer for permission? Not many companies are monitoring their former interns closely enough to even notice where they end up later. Even if they did look, they wouldn't typically hear about it until past the interview stage, unless I'm missing some reason the interview invitation would be publicly accessible.

A non-lawyer guess at a reasonable course of action: Unless you're a high-level employee with particularly sensitive knowledge, it's probably not a good idea to try to pre-clear future employment with the former employer. That just gives them an excuse to over-interpret the scope and tell you "no". Instead it'd make more sense to evaluate compliance yourself, and if in your judgment the job doesn't violate your agreements, go ahead and take it. No reason to go out of your way to even tell the former employer about it; the odds are heavily against them noticing and caring enough to sue a low-level employee.

One idea is maybe someone at the hiring company called the former company to follow up on a reference. Usually, I'd expect that to come later in the process, but maybe not.

The candidate withdrew his application, citing his noncompete. I followed up with him to verify there wasn't a misunderstanding, and he forwarded an email with his employer saying there wasn't.

Would the former employer have sued him directly?

At some point, civil disobedience is the right societal answer to this kind of thing, even if it's a bad choice for an individual.

I'd be willing to get sued over a non-compete (if it were genuinely a case of not competing, and where I thought a judge/jury would support me, especially if it were a very telegenic case like this), but I can see where a 20 year old kid wouldn't.

I know this is not the point of the post, but how confident are you that this was the real reason he declined?

This non-compete sounds rather unenforceable to me.

They rarely are, especially in california. My guess would be the same, that there was some other reason and it was more of an excuse. Maybe he wanted to show loyalty to the other company.

He was scared. Just like that. You know all that, but when you face a lawyer or an experienced abusive superior, it's hard to be reasonable. Especially if you're not experienced in dealing with people like that.

Still in college is not the best time to challenge a corporation and risk a lawsuit. Besides having better things to do, college computer science students are not known for their wealth, lawyers on retainer, or breadth of legal knowledge.

This is just silly, and no doubt unenforceable. Hire Bob and as part of his employment agreement let him know you'll defend him in court if he gets sued. Then file a motion for declarative relief with your local court asking them to provide you with a get out of court free card.

Non-competes aren't enforcable in California, but in much of the US they are. There was an article on HN about a woman (in Boston?) who'd been fired from a position because of a non-compete.

In that case it never made it to court, and the people trying to enforce the non-compete would likely have lost if they had pushed.

The courts do not look favorably on non-competes. So enforcing them is very hard. Its doable at the executive level but for someone who was simply a student intern one summer I would be flabbergasted if the court upheld it. You would have to prove that the student learned enough in the summer to materially impact the business in a negative way. I think it is so preposterous that you could get the declarative relief writ which basically says "If you try to sue these guys we're going to rule against you, do don't bother."

That would make a lot of sense, but it isn't the reality. Here's the previously posted article: http://articles.boston.com/2011-07-03/business/29733744_1_no...

TL;DR: Game tester lost their job, and couldn't work for another gaming company because of non-compete. Analysis indicated non-compete is enforcable.

Unfortunately they didn't litigate the non-compete in court. That it existed was sufficient to get the new employer to fire them.

Generally if you look at the litigation history of non-competes you get a better sense of what is and is not enforceable in various jurisdictions. Had the game studio asked their in house counsel if the non-compete was likely to prevail in litigation, my intutition is that they would have said that it would not.

In the referenced game tester example the fact that the previous employer laid off the employee would work in the affected employee's favor in any jury trial.

To be clear, I know that non-compete agreements are effective at preventing people from working at competitors, but before you write yourself off because you've signed one check the case history in your area to see if they were upheld in court.

You are correct that jurisdictions vary significantly.

But I believe the Massachusetts is pretty strict.

eg, here the legal department of a hiring company said the non-compete on a laid-off worker was probably enforceable:

Bob Balaban of Lexington took a software engineering job in 2008 that required him to sign a two-year noncompete agreement. During the recession of 2009, he was laid off. Balaban had several interviews with managers at a prospective employer, but it had a business unit that competed with his old employer. “They informed me that their legal department advised them against hiring me because of that

Courts find them enforceable, too:

And these cases do sometimes wind up in our court system, taking up judges' time. Earlier this year, a judge blocked a South Shore hair stylist who was fired from one salon from taking his blowdryer over to another salon.

http://www.boston.com/business/technology/innoeco/2011/09/no...

IANAL, but I think your intuition might be dangerous.

The original article talked about New York, on the topic of New York non-competes:

"Editor: Doesn't much of New York law disfavor non-compete clauses in employment contracts?

Klein: The court cases do say that non-compete clauses are disfavored, but that does not mean that they are unenforceable. In New York, non-compete clauses in employment contracts will only be enforced to the extent reasonable and necessary to protect valid interests. The case that is most often cited for this standard is BDO Seidman v. Hirshberg , 93 N.Y.2d 382, 712 N.E.2d 1220, 690 N.Y.S.2d 854 (1999). In deciding whether a restrictive covenant is reasonable, a court will examine certain factors relating to the length and scope of the non-compete that bear on the employer's legitimate business interests and the extent to which the employee still can earn a living. Also, New York is a "blue pencil" state, so even if a covenant not to compete is too broad to be enforceable as written, a court has the power to modify it - particularly if the contract indicates that it was the parties' intention that the court be able to do so. In short, the recent case authority indicates that New York courts are enforcing covenants not to compete and benching employees when the legal standard is met."

From http://www.metrocorpcounsel.com/current.php?artType=view&...

I don't think 'being a summer intern' meets the standard but as we both are not lawyers we cannot say for sure. I know that I would offer to defend this guys if he got sued by his former employer but that is just me.

This doesn't help much unless they name the company. If companies that do this are named and shamed, it will tend to happen far less frequently.

Also worth bringing up that this kind of thing is illegal in California. If you're wondering why Silicon Valley sprang up here instead of somewhere else, California's extremely worker-friendly professional code is one reason why.

I believe it's actually unenforceable, rather than illegal. The difference being that California courts will refuse to enforce the contract, while if the contracts were actually illegal, they'd punish companies for asking people to sign them.

I've heard that some companies still offer them anyhow, hoping that you won't know they're unenforceable and will obey it anyhow. I also seem to remember a case where a company sued to enforce the non-compete in a non-California court. I don't know how that played out, exactly, and that case might still be pending, but the plaintiff seemed to think that another court might enforce the non-compete even if California's courts wouldn't.

Not to mention that even if it is unenforceable, I would imagine that most employers would rather just hire someone else than deal with the legal issues involved in hiring that employee.

They're apparently enforceable in Texas, although they don't seem to often be enforced (to the point that most people I've spoken with have the false notion that they are unenforceable). So it really depends on the state.

BTW, the bit about out of state enforcement in California came up in an earlier discussion. IANAL, but here was a link I found interesting...

http://lawzilla.com/content/noncompete.shtml

The section under "Out-of-State Agreements and Multi-State Employer Strategies"

"Who wins often depends upon a race to the courthouse. For multi-state employers it is often a rush to the courthouse to determine if a non-compete agreement is valid. The employer's strategy is to get an order outside of California in their favor. The employee or California prospective employer's strategy is to get an order within California in their favor. In the face of dueling, and opposing orders, the first to the courthouse may win because states often must give effect to orders from other courts."

The site gives a few cases that illustrate this as well as some strategies.

They are void under Cal. Bus. & Prof. Code § 16600.

The California courts have decided that California's policy against them is so strong that when California is applying another state's law under California's choice of law rules, they will be treated as void even if they are acceptable in that other state's law.

(A lot of people don't realize that courts will use law from other states when appropriate. For example, if you and I enter into a contract in Washington, and then we get into a dispute over that contract in Nevada and one of us sues the other in Nevada, the Nevada court will apply Washington contract law. It will use Nevada rules of civil procedure. I don't recall, but I think it uses Nevada rules of evidence, too).

There's one unsettled situation, I believe. That would be where we have a non-compete, and it goes to court in a state that enforces non-competes, and plaintiff wins, and then plaintiff tries to have the judgement enforced in California. The Full Faith and Credit clause of the Constitution would seem to require California to enforce the judgement, assuming that the other state's court had personal jurisdiction over the defendant when it ruled. (States generally have to enforce judgements from other states, even if the case would not have gone the same way under their law).

So if someone signs a non-compete in Washington, it's practically null and void if they go move to California for a job in California? What if they move back 3 years later to Washington and the non-compete was for 1 year?

Contracts generally have a clause that indicates which state's laws they follow. If you go to work for Microsoft, your non-compete will say that the contract is enforceable under the laws of the state of Washington. You can't escape it by vacationing in California or even by taking a job there.

If you have a non-compete with Microsoft, and the terms of the non-compete say Washington law is to be used, and you take a job in California, and Microsoft sues in California, California's strong policy against non-competes will apply. Those parts of the Microsoft contract will be treated as void by the California court. Whatever remains will be interpreted using Washington law as construed by the California court.

There have been some really, really interesting cases where California's non-compete laws collide with other states:

http://www.cooley.com/57476

Interesting. So they're actually void and not merely voidable?

Non-competes are not enforceable against non-exempt workers (i.e., hourly, part-time, or independent contractors) in most states, but especially in blue states.

In some states, including California, non-competes are not even enforceable against full-time, fairly high-level employees.

You or the intern needs to talk to a lawyer, b/c it sounds like the NLRB should be having a chat with the potential employee's former employer.

Forget about a lawyer, the intern should call the state's labor board.

They'll cut them down to size for free and be thrilled to do it.

Seriously, I often see advice on HN to lawyer up over an employee disagreement, but your home state's government probably already has a ton of people waiting to jump all over that situation for you. The laws are so employee-friendly it's often pretty unfair.

Even if the intern is justified in doing so, taking legal/regulatory action might not be the best way to start a career. A company this unreasonable may actually enjoy personal and professional destruction.

Downvoted for spreading FUD. Software development is a vast enough field that you can't be possibly be blacklisted.

Beyond that, I would be more likely to higher someone who stood up for themselves in such a situation.

If what I'm doing is so sensitive that my employer makes me sign a non-compete, they have to agree to pay me for the duration.

Then it comes down to just how valuable they think your experience really is.

I encourage everyone to negotiate a time limit and compensation into any employment contract that includes a non-compete.

Excellent advice, really.

When you give something you should get something in return.

You seem to have taken some pains to not tell us who the offending employer was.

May I ask why? Perhaps I am being naive, but if there is any reason to not publicly shame them here and now, then I don't understand it. Indeed, this would be very helpful to college students who got offered an internship here, googled them, and then found your blog post.

Microsoft does make interns sign non-compete contracts. I have mine in front of me. It's much tighter in scope, however; I can't work on the same thing as I either worked on or learned confidential information about at MS for 6 months after employment. Not at all as bad as the one in the article, but not the worst.

I distinctly remembered the intern employment contract including a non-compete clause (with a 1 year duration) limiting work on any competing product or project (rather than entire employers).. but I didn't have a copy of the contract to check so I withdrew my comment.

At Amazon I signed a 1 year non-compete as an intern.

When I asked their HR dept about it, they told me not to worry because they'd never heard of it being enforced, but I wasn't particularly reassured.

This is absolutely ludicrous. Non-competes for interns? I hope the company he worked at isn't in California where their non compete would be void.

man i wish college kids were given more training before diving into an internship from the what to expect standpoint. This could be a 20 minute class at their career centers in college: these are the X things you need to know (you are not expected to work 100 hours a week free, don't sign Non-Competes, do ask for letters of recommendation, etc).

Internships are supposed to be the real world training though. It seems highly unethical for companies to take advantage of interns because by definition interns are inexperienced.

I had great internships and never felt like I had to be vigilant that the company was trying to take advantage of me, so I could spend my time learning. Its unfortunate that you are most likely correct that colleges should now be informing their students of things they need to avoid or deal with like this.

I did a handful of internships in college, mostly irellevant to my current career and was fortunate to never be taken advantage of. i know many people who unfortunately were.

I suspect the intern was using that as an excuse to go somewhere else.

Usually, when this situation occurs, the prior firm's lawyers immediately send a notice of intent to file an injuction as well as a statement that the new firm must retain all data pertaining to that hire, as they may be required to disclose it at a later time.

My wife is currently going through a non-compete negotiation, and she and most of my friends work in the finance industry here in Chicago, where this comes up for almost every employee who does decent work and tries to change employers.

My previous company did something sneakier. They didn't ask us to sign a non-compete, they made an informal agreement with its clients and vendors not hire any of us.

Now I have 3 years of experience in this specific field but, after being laid-off, no company in the field will hire me.

You are unemployed and the victim of a crime. You are perfectly positioned to take some time to work with a lawyer to make the world a better place and make some money from your troubles.

It's a good thing that Non-Compete's aren't enforceable in certain states. California for one.

I found this awesome explanation while searching for more information (specific to Missouri): http://www.mobar.org/journal/1998/mayjun/corrigan.htm

IANAL, but odds are that this "agreement" would be ruled as non-enforceable by most reasonable courts in the US.

It's not like the guy was VP of software development. He was an intern. The whole reason he has the job is to presumably transfer the things he learns into various other roles.

http://www.heydary.com/publications/non-competition-agreemen...

Both you guys should completely ignore the non-compete and see if they try to enforce it. That's a lot of money for the loss of an intern. :-)

If I were the intern in question, I would have withdrawn my application rather than proceed like that. I would never want to create an adversarial relation with a current or former employer unless they left me with no other alternative.

It would suck to lose a shot at a great job, but I think it's worth the loss to maintain a reputation as a loyal team player (even if the employer seems unworthy of loyalty) and move on to a more worthy employer when I can find a way to do so that won't raise their ire.

I would draw the line in situations where being a "team player" would require me to act unethically, but in the absence of something like that, I think that over the timeframe of a career, there is net value to being someone that former employers and coworkers recall positively rather than negatively.

After being an intern for 5 years of studying I hoped to get some tips, how to become the slave master now that I have pocketed my Master's finally.

In France, such conditions are enforceable... if you pay the guy an indemnity essentially equal to his former salary * duration, for doing nothing instead of working for the competition.

This ensures that such clauses are only enforced when it _really_ makes business sense. But they're often included in contracts anyway, because many employees ignore that they're unenforceable.

I second the recommendation in the post - don't sign a non-compete if you can.

A past employer introduced a non-compete half way through my employment. Most engineers ignored repeated HR requests to sign it. I had a few 1:1 discussions with my boss during which I stared with a blank look. Then I just asked: "Have you signed it?" - I was never asked again.

While I agree with the spirit of the post, some of it's is a bit inaccurate.

FogCreek did used to run a job board (it was actually created by a FogCreek intern). When Stack Overflow's launched it's job board FogCreek's job board was merged with it in order to give Stack Overflow's board some traction (Joel Spolsky is a co-founder of both companies).

I don't understand why a company would choose to enforce a non compete in this situation. The main reason for having interns is to hire them once they graduate. I doubt Bob would consider working at that company again. So the company loses a potential employee and gains nothing.

If he's still looking, there are a bunch of California companies who would be happy to hire him.

I've signed them when asked and have only been brought into court once. The judge threw the case out in under 10 minutes.

On short, you can't keep someone being gainfully employed simply because you signed a non-compete clause.

Is there any precedent in the US of a non-compete being anti-constitutional? As far as I know, most non-competes were determined anti constitutional, as you can't force someone to not get a job. The only time they'd still be viable, would be in the type of examples that OP gave.

not really sure how that would apply- the constitution exists to define the powers of the government, and a non-compete contract would be a civil matter between a company and an individual.

Civil matters are still enforced by the government, and subject to legal scrutiny. You can't hire an assassin and then sue them for breach of contract if they fail to kill the target, for instance.

Any civil matter can also be regulated (regulations can apply to anything, really). But in a practical sense, regulations pertaining to business and professions like this are handled by the states, while the feds really only get into it when it's a matter of worker safety, taxation, those kinds of things. This is why you can laugh at a noncompete in California, while up in Washington, Microsoft gets to own its employees' dreams for years after they leave the company.

Non-competes are so unbelievably worker-hostile that they should really be outlawed everywhere.

I really like the idea of forcing the employer who's enforcing the non-compete to pay full salary for the duration of the non-compete. It seems only fair that if you're trying to keep me off the market because I'm so potentially devastating to your business that you should pay for the privilege.

Benjamin's article is bullshit. The only way to deal with crap like that is name and shame, so that the next time a prospective employee googles the company they notice that they have a habit of fucking employees.

Personally, since Fog Creek is also in nyc, I'm guessing theladders.

theladders is in nyc, indeed is in austin/bay area, simply hired is bay area, I'm not sure where dice and monster are

No, they are in Maryland. I don't care about naming the company. I care about putting the kid in a bad position.

Said kid is already screwed. You now have a choice: either the next time a prospective employee or intern googles the offending company your blog comes up as a warning, or it doesn't. Which do you think will be more effective preventing behavior like this in the future?

Imagine this post title: "X screwed an intern out of an awesome internship at fog creek" rather than a vague warning to interns not to sign noncompetes.

It's not the specific company that is the problem. It's not like they are the only ones doing this. The problem is the practice in general.

Not signing noncompetes isn't a vague warning, it's very specific. I would extend it from interns to everyone other than senior sales staff.

Dice is in Des Moines, IA. Monster is HQ'd in Maynard, Mass.

It's not theladders. It's in Maryland, not New York.

You're asking interns to write a garbage collector during the interview?

Why not? Any decent CS course covers garbage collectors. It should be a matter of presenting a known algorithm in pseudocode. Unless they expect the whiteboard code to compile and produce a fully working garbage collector.

> Any decent CS course covers garbage collectors.

In the required core? I'm not so sure that's true. The concept of garbage collection, yes. But garbage collection algorithms would usually be presented in courses like PL or maybe compilers, that are often in the "take 2 of 5" list or maybe even in pure electives. (This is true of a lot of "important" CS "core" algorithms and concepts---every CS department includes them in offered courses but the requirements are usually structured so that not all CS majors will be required to take them.)

It was certainly true of the CS course I did in the 80s - as part of the second year (of four) Data Structures and Algorithms course we spent a lot of time looking at memory allocation and garbage collection. This was a compulsory course - even those folks doing joint degrees had to do it.

I'd be amazed if a CS course didn't cover this kind of stuff.

Well, it's hard to argue against your 25-year-old personal experience and your amazement.

Less snarkily: I teach university-level CS, and of the five schools I've had direct involvement with (as student or faculty), all covered GC algorithms someplace but I think at least four of them, maybe all five, had at least one path through the major that would avoid covering them. I have researched the situation for certain "core" topics other than GC at dozens of top CS schools and I can promise you that there are many topics that are widely (and correctly) viewed as very important to CS but are not required even at many of the best schools.

My comment was intended to demonstrate that 25 odd years ago these things were covered in a non-optional way when the were regarded as fairly esoteric. Today when a lot of mainstream languages have them you'd think a CS course would cover them!

Note I'm in the UK and degree courses here are, as far as I can tell, structured rather differently to those in the US. When I did a CS course the classes required were 80% fixed by your choice of course - there was no flexibility or modularity in the first 3 years, with only the final year allowing for selection of classes. There was no way to graduate without passing the class that included GC algorithms.

Of course, it wouldn't surprise me if this kind of approach has been made more "flexible" to make courses more "accessible".

We didn't have it covered in our CS program. We were taught the concept (keeping track of pointers to allocated memory, etc), but not the implementation part. Garbage collectors are pretty damn complex.

Non-competes don't prevent you from working at other companies. They only prevent you from actively pursuing work elsewhere. If you signed a non-compete for working on the iPhone you would be allowed to accept a job at HTC, but you couldn't go "I work at Apple and know all their secrets so hire me!" Additionally they can't prevent you from finding work. If you had a very specific expertise on phone antennas, and you had a non-compete for working on the iPhone, the contract would virtually have no relevance.

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