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Comment by codingdave | Hacker News Reader

> the best thing we as engineers can do is be aware of the types of contracts we're signing

I'd argue that the best thing we can do is to not just make generalizations about what is OK to sign or not. Confidentiality agreements and non-competes are fine if they are narrowly focused, fair, and your compensation is sufficient to make it worth the restrictions. Because that is what a contract really is - a balancing act between obligations and limitations put on yourself contrasted with benefits (money) given to you in exchange.

So an absurd non-compete is fine if they pay me a lot of money for it. An confidentiality clause is fine if they pay me a lot of money for it.

This becomes critical when looking at all the recent layoffs. Most severance packages are exactly this type of contract - confidentiality and other restrictions in exchange for your severance pay.

Should you sign? Maybe. Maybe the severance pay is worth it. Read the contract, understand it, and make a choice.

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I agree. My contract says that my employer can choose to enforce a non-compete for 12 months after I leave, but if they do, they have to pay me during that time. It creates a strong incentive for them to not abuse the non-compete.

Are you in finance? That kind of compensated-non-compete seems common there, but rare elsewhere.

A garden leave clause is literally required for any noncompete contract to be enforceable in MA [1]. Hilariously, none of the FAANG companies include a garden leave clause for MA employees. NB: giving post facto garden leave isn't enough to enforce a non-compete; an actual clause needs to be in the signed noncompete contract in order for the contract to be enforceable.

My employment lawyer friend is fairly certain that if a FAANG tried to enforce a noncompete without a garden leave clause, they could be sued for triple damages, where the damages would certainly include the minimum required garden leave, and that if the enforcement attempt resulted in a job opportunity being aborted you could probably also include the full vesting schedule of your next employment contract in the damages (which, again, gets tripled).

[1] M.G.L Chapter 149 Section 24L:

(b) To be valid and enforceable, a noncompetition agreement must meet the minimum requirements of paragraphs (i) through (viii)...

(vii) The noncompetition agreement shall be supported by a garden leave clause or other mutually-agreed upon consideration between the employer and the employee, provided that such consideration is specified in the noncompetition agreement. To constitute a garden leave clause within the meaning of this section, the agreement must (i) provide for the payment, consistent with the requirements for the payment of wages under section 148 of chapter 149 of the general laws, on a pro-rata basis during the entirety of the restricted period, of at least 50 percent of the employee's highest annualized base salary paid by the employer within the 2 years preceding the employee's termination; and (ii) except in the event of a breach by the employee, not permit an employer to unilaterally discontinue or otherwise fail or refuse to make the payments; provided, however, if the restricted period has been increased beyond 12 months as a result of the employee's breach of a fiduciary duty to the employer or the employee has unlawfully taken, physically or electronically, property belonging to the employer, the employer shall not be required to provide payments to the employee during the extension of the restricted period.

Enforceable versus written in a contract are two different things.

The question is what is the rate of voluntary compliance in what would otherwise be an illegal contract.

In Germany (and probably much of the EU) that incentive is built into the law, as it should be.

I think it’s boilerplate in big company contracts there, but extremely rarely enforced, because IIRC the amount you have to pay is the comp for the job you’re blocking.

When I had a contract like that, I occasionally fantasized about getting a FAANG job and being paid in full to not take it, but in reality that would never happen unless you got caught in a spat between rival executives.

In France a non-compete clause is only valid if it is bounded in time, geographically, for a specific type of job and with financial compensation while it is enforced (not necessarily full pay but has to be proportionate to the constraint).

As an engineer, I have seen a lot of contracts with bogus non-compete clauses and never seen one that would hold in court. So the employees are technically protected but still subject to psychological warfare (threats when you plan to ignore an illegal clause).

Serious question: is it even possible to get a well-paying dev position that doesn't have one or more of the clauses listed in the article?

Another consideration is whether the contract can be enforced and your legal recourse if the counter-party attempts to enforce an invalid contract clause. This is particularly true for noncompetes.

A better piece of advice than "never sign" is to simply find an employment lawyer and discuss the ramifications of the contract prior to signing.

I have successfully negotiated my way out of non-competes and other onerous employment contract terms. Only at small- or medium-sized startups, though, not big tech. In general the bigger the company, the less willing legal is to play ball. I suspect going for rather senior roles helps, too.

Non-competes are dog-eat-dog "fuck you" territory for me. I don't even bother negotiating. I happily sign non-competes, but will never sign a non-compete that's actually enforceable. If their lawyers want to lie to me about what's legal in my state, I'm happy to let them engage in unfair and deceptive behavior right up until there are actual damages.

More importantly, I would also happily fight them in court if it came to that (and retire on the triple damages).

I'm thinking of some of the other clauses:

1. "one-sided termination clause": Every contract in an at-will jurisdictions without a guaranteed exit bonus contains, implicitly or otherwise, a "one-sided termination clause". I have never seen a contract for "normal working stiffs" that contains an exit bonus, and I've only ever worked in at-will jurisdictions.

2. IP assignment

3. Confidentiality agreements with broad language

Very, very, bad idea. Never sign something you disagree with because you believe it to be unenforceable.

I disagree. My employment attorney recently reviewed a "non compete non solicitation" doc for an engagement and said, "it's copied from LegalZoom and is so badly written it will be unenforcible in the jurisdiction and here is why." They earned their $300 for reviewing my employment docs (for reasons beyond this specific issue). When in doubt, seek counsel and follow their guidance.

That's...rather different. You actually consulted an attorney. 99.9% of the people trying this one weird trick do not, often to their great cost.

How would you even function in the US? Just one time to get an apartment they had me sign an agreement stating I was not in the military, had never been in the military & would not join so long as I lived there. Keep in mind, I was subject to conscription at the time.

The whole thing is laughably unenforceable as well. They're trying to end run around federal law protecting members of the uniformed services. You can write any contract you want & have anyone you want sign it about. Doesn't mean anything, at all.

Also I'm pretty sure if I got called up to go to war, there is going to be someone in the DoD who can give me a little legal help in explaining to the landlord how hard they need to pound sand.

That’s a good example, but most contracts have language such as “if any clause of this contract is found to be invalid, the rest remains in force”.

So yea, in a case like that that part of the contract would be struck, but it isn’t a get out of jail free card for the entire contract.

You're talking about "severability" in US contract law. The rest of the contract was either stupid (regulating my usage of the non-existent golf course) or just garden variety stuff (can't sublet, etc.).

The same company also just dropped off an "updated" contract a few months later and told me that I had to review it and sign it or move out by the end of the month. I obviously just ignored this.

Right, but in an employment contract you want that severability. If the company tries to enforce the non compete clause and it’s invalid, you don’t want that to invalidate their obligations with respect to your pension.

My experience with companies pulling DIY contract addendums out of their ass is that they forget severability clauses. Or that the contract starts falling apart because they have other sections which refer to the severed part which means those sections also fall apart. For example, a damages section that ends up exceeding state law.

DIY contracts are the best to sign because they are such a mess.

I’m a lawyer and a few years ago negotiated a “we own everything you make” clause in an agreement for a batch of engineers who were being hired at the same time. We couldn’t get the clause changed - as others have said, BigLaw drafted it, the employer didn’t want to change it - but we did get an email after back and forth that said they had no intention of enforcing that clause for stuff you make outside of work. So I sent that email to the engineers and they can hold onto it in case there’s an issue in the future.

Reasonable companies don’t want to get a reputation for litigating employment clauses like this. Sure, there are outliers, but nobody wants to be on the front page of HN for suing an engineer over a side hustle. Especially not in this labor market!

Side note: it was delightful to me that the engineers carefully read the agreement and one of them consulted their own lawyer. Most people don’t do that.

Are you a lawyer? Or do you have a lawyer review every contract you sign? Just curious how you are so confident a particular contract, or clause within, is unenforceable. Not saying you're wrong, but how do you know?

> Are you a lawyer?

No, and my posts are not legal advice.

> Or do you have a lawyer review every contract you sign?

Yes, and they provide me with legal advice specific to my situation.

> Just curious how you are so confident a particular contract, or clause within, is unenforceable. Not saying you're wrong, but how do you know?

MA statute is very clearly written and its courts don't have a reputation for fucking around with legislative intent.

My (well known, big) company doesn't do non-competes. They do have the clause of not poaching employees for a year after you leave, though.

And I'm free to work on other stuff or have a side business. People in the company disagree on how much of that needs to be disclosed, though.

in some states those clauses aren't enforceable like in california.

> non-competes are fine if they are narrowly focused, fair, and your compensation is sufficient to make it worth the restrictions

Yes! This is a particularly true for most software engineers. I have a friend who is a doctor whose contract says that if quits, he can't practice medicine within a 30-mile radius for 12 months. His only option would be to move to a different area, take a job with a horrible commute for a year or to wait it out. On the other hand, as a software engineer, I've never been in a situation where my thought is to move to a direct competitor. My skillset is broadly applicable to many industries, and it wouldn't be strange to do one gig for Home Depot, the next one at Google, followed by a role at Tesla.

A lot of doctor and vet contracts are like that because they are likely to get a large local client following just by joining a practise that the practise has spent years cultivating.

There's an easy way to solve this problem without non-competes: Treat your employees better. Usually by paying them more.

The entire concept of going to work for someone else is that it's supposed to save you a lot of trouble having to sell your services on your own/run your own business. If it has become so much more profitable for doctors to leave and start their own practice then they should be doing that because you're not paying them enough! You're not "making good" on your end of the bargain that we offer in civilized society.

Sure, and if a doctor is good enough, he can just start his own practice from the start and never have to sign anything since he never join any practice except his own.

That line of reasoning goes both way. If you sign something, then it was worth it for you.

>if a doctor is good enough, he can just start his own practice

It depends. Many instruments, such as PET in nuclear medicine, cost a lot. One have to work for hospitals/networks to help his/her patients with that instruments, no matter how good he/her is.

This perspective completely evades the actual argument which was that practices behave this way because they're extending access to their client base which is a resource they cultivated themselves and which will almost certainly yield a following the the new applicant.

A client base is not an exclusive resource that only the employer gets to have. If the doctor started a coffee shop and those same clients started going there for their coffee would it be the same? Or perhaps the whole point of such clauses is the very definition of anti-competitive behavior.

Also, if the doctor's patients all like him enough to switch to his private practice when he leaves then clearly they weren't paying the doctor enough. He was worth that many patients!

They could pay doc more if they didn't spend any money on marketing and retention but that would be a lose lose situation, especially as most docs bill money on a per visit basis.

Complete bullshit. The patients are not "theirs", they are not resources to be traded. The doctor is the one extending services to the practice. They're the ones who benefit from having high quality professionals attending to patients. The practice did not cultivate anything, the doctors practicing there did. Doctor-patient relationships are personal and it is 100% unethical to interfere in them with anticompetitive contracts.

> it's supposed to save you a lot of trouble having to sell your services on your own/run your own business

Can't stress this enough. Show up, attend to patients as scheduled then go home and enjoy life. All the boring details are taken care of. It's definitely more profitable to start one's own practice but the comfort of working at such places should not be underestimated.

Not always, a vet practise can have 1-5 million in fixed capital costs. Surgery, dental, x ray, blood and so on all add up. Sharing admin and vet techs helps too.

It's still an anticompetitive clause. The patients don't belong to the practice.

When my dentist retired his practice they actually sold the client list specifically, so I am not sure this is legally true. Morally I agree.

What exactly is this "client list" that they sold? Names and contact information?

Yeah, it's generally called good will. Client list, client interaction, services, and payments history, website, company name. The ability to figure out the best clients and continue the relationship with them.

I know a PT who signed on of those. Then left, worked outside the agreed radius (but still in the same metro area) , and was still sued. He eventually settled.

I imagine the lawyers came up with some bull like "well actually we meant that the 30-mile radius of your new clinic can't overlap with the 30-mile radius of ours"?

Luckily Google does not, to my knowledge, try to have non-competes in their contracts, and they would not be enforceable in California, otherwise the problem with companies their size would be that they "compete" in an awfully large number of business areas.

Going from Google to Tesla? Sorry, they're a competitor in driving cars. Spotify? They compete in streaming music. Microsoft? They compete in search. Apple? They compete in cellphones. Telegram Inc? Google does instant messaging. Garmin? Google does maps. NCR? Every heard of Google Wallet?

(also worth taking into account whether clauses like an absurd non-compete are even enforceable...)

OK, but that's REALLY hard to assess for a normal person on their own.

Moreover, it doesn't prevent unreasonable entities from having their retained lawyers draft scary letters. Most people just sign the boilerplate, hope for the best, and try not to poke sticks into wasp nests if they can avoid it.

But at software engineer salaries, it's not that expensive to get legal advice for this. I did it once, when a company I'd worked at for over a decade was bought out, and insisted everyone sign onerous contracts including broad IP assignment. I read the contracts carefully, marked them up with specific questions, and spent $300 on a half-hour consult with a lawyer, who said it was pretty much all enforceable in my state. (So I left the company, which worked out fine.)

One question/comment here, I don't think they can force you to sign a new one in most states without giving you something in return. I know someone who refused to sign a new contract because they didn't give him anything in return, and there was nothing they could do about it, or at least there was nothing they did do about it.

Hah interesting. My lawyer didn't mention that so maybe my state was an exception. Or, our employers can fire us anytime for any reason so maybe he figured it would be impractical to litigate.

It is dishonorable to sign an agreement knowing you won't adhere to your end because it's unenforceable.

After all, we make promises all the time that are unenforceable, but we keep them.

It's even more dishonorable for a company with a legal team to offer up terms in a contract that are explicitly illegal, and then use those illegal terms to conduct unfair and deceptive business practices in the labor market.

In fact, that scenario is so dishonorable that in some states you can ask the court for triple damages if the employer tries to enforce the noncompete

Your having honor is not conditional on others having honor.

There is no honor is dying on an ER stretcher.

For anyone in the US who needs regular healthcare beyond what's provided by Medicaid, the labor market is a war for (literal) survival. If the ownership class didn't want to return to an extremely adversarial relationship with labor, then they shouldn't have gutted the social safety net.

And no, I'm not going to show my hand in an imperfect information game... it would be stupid and dishonorable to my family to present with anything other than bourgeoisie professional-managerial class sensibilities.

Right on, stick it to the man

Honor is what separates men from animals. Each of us gets to choose which we are.

Did you just insinuate I'm subhuman because I don't bend over when a megacorp insists that I sign an unenforceable noncompete?

Cooperating against a defect-bot is not an indication of honor.

That's like saying, "it's dishonorable to agree to a contract to kill someone knowing full well such a contract isn't enforceable."

If one party holds all the cards in a contract negotiation it's never truly being negotiated in good faith in the first place. Furthermore, one could argue that without having an expert on contract law right then and there available to answer any questions about any given contract means it falls under a "lack of capacity" for basically anyone who isn't a lawyer.

Employee agreements often fail in courts because of:

    - Duress
    - Lack of capacity (e.g. due to overly complicated legalese *specifically written to be hard to understand*)
    - Undue influence (e.g. company says they'll hire someone else if you ask to get the contract reviewed by a lawyer before signing)
    - Misrepresentation (e.g. job was described as "X" but turns out it's "Y")
    - Non-disclosure (e.g. candidate was not told job would require purchasing products or services sold by the company itself or a partner)
    - Unconscionability (e.g. some term or terms in the contract are so unfair that it cannot be allowed to stand... Like a non-compete that says you can't work within 50 miles of your former place of employment if you leave)

The "usual one" is unconscionability: Employers have unfair bargaining power almost all of the time and judges and juries are easy to convince of this. Also, these sorts of things don't usually make it to court unless there's something ridiculous in the contract. What's interesting is there usually is something ridiculous in every employee contract. It's just that those ridiculous things aren't usually the part of the contract a company is trying to enforce so they don't come up as often.

Dishonorable? I don't think so. They're the ones trying to trick employees into immoral and illegal obligations. They only have themselves to blame if it blows up in their faces. They played the game and they lost.

An honorable person would refuse to sign such an agreement, or would honor it, enforceable or not.

Nobody is making you sign it.

If an agreement is unenforceable, it's almost certainly abusive and exploitative in nature. I mean, it actually got to the point that the agreement was overridden by law. Doesn't even make sense to talk about honor in the same context. Would honorable people propose such an agreement?

They're likely banking on that sense of honor to make you hold yourself to obligations they can't legally hold you to.

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