Should I pass on a new job because they want me to sign a non-compete?

Edit: hire an employment lawyer, I am not one.

That said, the way I deal with non-competes and IP in contracts is I ask them to specify the scope of the clause as it relates to the technology domains and businesses involved, for a precise amount of time (e.g. 6mos), and that they will have to pay an additional %30 of the total contract value to exercise it.

Given the three new variables, they have typically (n~=5) come back with variations on two of them. I have not been paid out on one yet, but I have had the agreement re-scoped to apply to narrow technology domains, an inclusion of the cost of the exercise option, and dropped the non-compete period from 3 years to 6 months.

Your strategy is to ensure you can afford retirement, and their boilerplate clause adds significant risk to that plan without compensation. Just say, "hey, this boilerplate section is a bit broad and it adds unncessary risk, here are some options that I would consider."

If they bully you on this, you already know everything about them you need to. However, if you're screwed and you need a job, sign it, take the money, and manage that non-compete clause risk yourself.

Before"standing your ground", try negotiating first.

I've used conversations along the lines of "You're offering me this role at least partly because I have $x years experience in $relevantSubjectMatter. When, in future, we are no longer in an employment relationship for whatever reason, I will take that experience to my next employer as well. While 'm perfectly happy to sign a non-compete that limits me from taking any new experience gained while working here to any of your direct competitors (possible add "or clients"), I cannot sign a contract that prohibits me from making a living in my field of expertise after working with you. If you need me to sign a supremely broad 1 year 'will not engage in my chosen career' non-compete, we'll also need to add a 1 year's salary payout clause."

I've twice had employers pretty much say "Oh yeah, that's a standard thing we put in all contracts, but we only really apply it to salespeople. Here, let's just delete it all for your development role".

As much as anything, their response there will let you clearly know whether this is a molehill or a mountain.

The first royalty contract I was presented with meant I granted exclusive rights in exchange for a royalty. It sounded fair to me. I showed it to a friend, who said: "they have a similar product. With this contract, they get exclusive control over your product, and never have to actually sell any. You get $0 royalties, and they eliminated their competition."

If this employment contract is worth $$$ to you, it is worth showing to your lawyer.

What I also do for employment contracts, is list all my side and past projects, and get written confirmation that those remain my intellectual property. If, when I've been employed, I wanted to start a new side project, I'd get written confirmation from the company that it's mine. They've never objected, and I never had a problem. Contrast that with people who sometimes come to me saying "I've worked a year on this side project, and I'm worried my employer will claim it is theirs."

I was shocked to learn recently that California’s exclusion of non-competes can be voided if you are represented by a lawyer when signing it!

Basically a Delaware court found that a Delaware corporation could ignore California’s provisions of an employee who had worked only in california, due to “Freedom of contract” and specifically the labor code §925(e).

In general (I’m not a lawyer) it seems wrong to me to sign something you don’t agree with, even if you think it’s not enforceable.

Here’s a reference, or just ddg “Nuvasive” which was the evil company that got this ruling.

https://www.gtlaw.com/en/insights/2018/12/california-employe...

It's almost impossible to find a software job without a non-compete in Texas. It's less of a problem when it's a smaller company with a narrow focus, vs a Google that arguably "competes" with every other software company out there (this is part of why I've always opted for small companies). For example, my current company makes software for the energy sector, so I might not be able to go straight to a job at another company making software for the energy sector. I don't think it would apply to much else. To me, that seems reasonable and it doesn't really bother me.

Now, there's another type of clause that you often (but not always) run into where companies will claim ownership of everything you create while employed there (sometimes scoped to a vague "related to work", but not scoped by "on company time" or "with company equipment"). I've read horror stories about those, and I've flat-out turned down offers based on that alone. My private creative life is my lifeblood and I will not give someone the slightest bit of power over it. So I only accept if that part is missing or at least properly scoped to the hours/equipment that belong to my employer.

Sometimes smaller companies will be willing to tweak the contract if you voice your concerns; larger companies usually won't because it just gets handed down from Legal.

Best of luck.

Do you have an alternative to this agreement? Are you willing to walk if they won’t budge?

I’d suggest that you stand your ground and redline it in the employment contract. It will materially impact your future earning potential. Perhaps they can offer you a year of severance in exchange for the non compete.

They will likely tell you “it’s standard” and “there’s nothing they can do” and they will hold that line until they know you are serious.

If you, or the company, is in California go ahead and sign it. Non-competes are not valid or enforceable in the state of California.

I am not a lawyer, but when faced with a very similar situation, the lawyer I sought advice from told me this.

Non-competes have various degrees of enforceability depending on where you live and/or where the company is headquartered. I would recommend reading up on those details, but suggest consulting a qualified lawyer to verify the jurisdictional details.

The unpopular truth is that boilerplate noncompete agreements are common practice in most companies, big or small. I know people who have negotiated to not sign them, but I also know people who lost job offers by refusing to sign non-competes.

If for whatever reason you cannot expose yourself to risk of a non-compete agreement and you're willing to give up this job offer, you can try pushing back.

Practically speaking, it's rare for companies to try to enforce non-compete agreements against former employees for simply working at a competitor company. They only tend to come into play if you leave for a competing company and you're directly working to help that company compete against your former employer using knowledge or experience gained at the previous company. For example, if someone worked on XBox at Microsoft and then left for Sony to work on cameras (but not Playstation) then it's exceedingly unlikely that the company would even try to bring up the non-compete. However, if someone goes straight from the XBox team to the PlayStation team to work on the exact same feature, watch out. Even without a non-compete, the NDAs you signed could be invoked depending on the nature of this work, so not signing an NDA doesn't mean you're free and clear when moving to a competitor.

However, that's not a guarantee. If you're in a situation where you cannot afford to be burdened by any possibility of a non-compete and you're in a position to give up this job offer, you can make your employment conditional on not having to sign the non-compete.

> I've also heard horror stories of being presented with a non-compete to sign after starting the new job and leaving previous employment. That kind of behavior seems especially devious, but it seems pretty common as well.

It seems Texas is at-will employment and non-compete are enforceable there, which is IMHO why BS like this flies. This is luckily not common in most of the world.

> Should I pass on a new job because they want me to sign a non-compete?

You can always negotiate any part of the contract:

- Tell them you don't sign no-competes, so you can only work with them without one. Let them reject you.

- Ask for the agreement to be more strict. E.g. limit it to a sub-category, like "FX trading software".

- Ask for the agreement to be a lot shorter. E.g. 1-3 months. Note that in practical term this might be the same.

- Ask to be paid for the no-compete time. Good luck with that though.

Of course depending on the employer and how much they want/need you, they might accept the negotiation or not.

I would guess your risk would go down substantially if you're able to just not disclose where you were going to work publicly, for a few months. (If/when you choose to leave).

"I'm looking a few options, but taking some time off first"

1) It depends on what your field is. For example, if you are a software engineer, moving to a company that doesn't compete is easy. If you work on software for Tesla, that doesn't mean that you can only work for car companies. So being barred from working for Ford for a year may not be a big deal. Keep that in mind. However, if you work as a mechanical engineer on electric motors, your skillset does limit you somewhat and the non-compete matters more.

2) It depends on the size of the company. At the start of my career, I worried about stuff like this a lot, to the point of trying to negotiate it. In retrospect, I'm a software engineer, so I don't really need to work for a competitor for my skillset to be useful, so I think I was wasting my time. I should have been negotiating for higher salaries instead (that's something that hiring managers can readily negotiate on and don't have to go to legal for).

3) For what it's worth, I've gone to an experienced employment lawyer several times and he's always advised me to just sign. He said that it's very unlikely to be enforced anyway and in his mind not something worth negotiating over. Keep in mind, for example, that Amazon and Google might be competitors, so going from AWS to Google Cloud might be a problem with that contract, but moving from AWS to Google Search wouldn't be since that's not a competing division.

So that's my story, but IANAL and everyone is different.

I would try to get clarification on what does and does not constitute a competitor. The ideal would be a definitive list of competitors for which this would apply, and any future competitors would be added by mutual agreement. They might not go for that though, so it might be fine to have a sufficiently narrow definition. Of course it also depends who the company is. If it's, like, Alphabet, their competitors are going to be a broad swath of companies. For most companies though, a fair non-compete wouldn't have to restrict your options too much.

I've had a lot of contracts over the years that range from handshakes to those full of overbearing non-compete/ip clauses. Early on, I learned that handshakes aren't a good approach and you always want some form of contract that's mutually beneficial. I also started by having an attorney who answered my questions about various clauses - money well spent. Over time, I learned more and got better at negotiating - I agree with all the folks recommending negotiation. In addition to trying to get a more fair agreement, negotiation tells you more about the type of people you will have to work with. It's the first time you get to have difficult discussions and you'll learn how much you can trust them. Exception to the rule for me is that I've seen startups lately that have the overbearing non-compete/ip ownership clauses, which I just walk away from because they're so one sided that a fair negotiation isn't worth the effort when I can find other customers without having to do that. Another consideration is that I've never gone to directly work for one of my customer's competitors after working for them - unless work is hard to find, it just isn't a nice thing to do.

1 year non competes post-termination of your employment isn't all that uncommon. In practical terms, it prevents you from working for a direct competitor of your former employer for 12 months, after which it expires and you can do whatever you want.

> Anyone been pursued by a previous employer due to a non-compete?

Remember that this question is only relevant if you plan to go and work for your employer's direct competitor after your termination.

Do you anticipate working for a competitor after quitting or being fired in the following 12 months?

I would consider the scope what what is considered competition to be excessively broad. That must either be narrowed considerably, or they must pre-agree on what severance would be. The last time I was faced with such a non-compete, I did hire a lawyer to review and help negotiate it, and I did get it narrowed to something I could live with, and it only cost a few hundred to do so.

When the time finally came to part with that company, I was very grateful for the narrower scope.

Texas government website describing the validity factors for non competes in Texas: https://www.twc.texas.gov/news/efte/conflicts_secrets_non_co...

IANAL, obviously.

1) these are not very uncommon, in my experience they're pretty normal

2) if you tell them about your friend's experience, and explain that you're willing not to work with a direct competitor but you will need to make it clear you still can seek employment as a programmer so this needs to be narrowed, they should be willing to modify the language

3) if they say "my way or the highway", even after sharing your friend's experience, that tells you something about them as a potential employer

4) but from their point of view, developers get to look at a lot of the innards of the company, and they aren't crazy or mean to want some protection from you just walking away with a lot of the value of the company in the form of IP, trade secrets, etc.

Don't sign if you are uncomfortable with the risk. It's best to have an employment attorney look over the contract and follow their advice, but if in doubt... don't.

I once worked for a company that wanted me to sign over rights to use my name, voice, and likeness for their marketing purposes. I said no way. HR drew up a new contract with the offending clause removed.

Then there was the startup that wanted me to sign an NDA and a TEN YEAR noncompete, the penalty for violation of which was that I would be personally liable for twice my employer's market cap -- even if my employer were, say, PayPal -- just to hear what their product was.

I gave them a hard no.

So, I am going to give a controversial take here.

Non-competes in general are not enforced. Often times they are straight up illegal, and even when they are legal, it is really pretty easy to hide where your new work is.

If you are stupid, you could get caught. But, in reality, if you actually take the correct actions, and are smart about it, the chances of you being targeted or sued is very slim.

IE, you can get away with breaking the contract. Probably because the contract is illegal, unenforceable, or unlikely to be enforced.

The important thing to do, is you just need to lie, and don't tell your former employer where your new job is. So don't put it on linkedin, ect.

https://www.twc.texas.gov/news/efte/conflicts_secrets_non_co...

In many places, noncompete clauses aren't worth the paper they are written on. In some places they are actively illegal, although DAs seem not to enforce that, much.

Now that practically all coding work is remote, you should be able to get work in some state where it would not be enforceable, even if it is, in Texas.

I don't know if it is enforceable in Texas. I know that in New York City it has been common for hedge fund coders to have enforced 6 or 12-month paid vacations between jobs. I know that California is a place where they are mostly unenforceable.

But always check with an employment lawyer.

This is a tricky situation when you like the company to join and presented with these non competes. Read through the non compete and find out if the limited to a specific role within a competing company or is it a blank statement saying that you cannot join the competitor in any capacity. If it a blanket statement, I would avoid signing or work with HR to make amendments. Good luck.

This may not be relevant to your case but I don’t see it mentioned.

I have worked with several large tech companies where I did not sign the non compete. I didn’t bring it up as an issue but I very clearly didn’t sign or otherwise initial the paper work. Strangely I have never once had one of those companies come back and ask me why I didn’t sign it.

I think that companies try to get what they can out of you.

Another thing to consider in addition to the other comments is your position within the company. Individual contributor software engineers seem relatively safe compared to, say, a sales executive who could take a significant portion of their clients with them. Basically the more damage you could do to the company if you join a competitor, the more likely they are to come after you.

Tech recruiter here from Switzerland.

Most non-competes that I saw are invalid because they contradict with local laws.

Firms put them anyway to scare candidates. In reality, they never hold.

I made even a video about it to calm down applicants: https://www.youtube.com/watch?v=st7JaIdLJ4w

You don't say what state the job is in, or whether you're an executive level employee. Both of those are important.

If you happen to be in California go ahead and sign it, they’ll never be able to enforce it.

Be transparent with your friend horror story and why you don’t want to sign the non-compete. You can also ask for a precise list.

Overall I would sign it without thinking too much of it. They probably have some horror stories from the other side!

Yes- but because you’re doubting it, not because of the non-compete.

Most contracts in-general never come into play.

But you should pay attention to all of them. Don’t sign things you aren’t comfortable with, unless you know you must.

IANAL but got a few lawyers in my circle. Unless you are a high level executive, you can just ignore non-compete. No company will or can enforce it for a low level developer.

Also advice from my lawyer friends, don't work for smaller companies with sociopath owners/executives with fragile egos. They are the one who file the most of lawsuits for no reasons. Non-compete or no non-compete clause, it doesn't matter, they are suing their employees more than bigger companies. Best defense is be a good employee and leave company on good terms.

Of course, consult your lawyer.

Fairly standard? I dunno. Hard to uphold in certain states.

How do they control what job will you take next?

> Am I making a mountain out of a molehill or should I stand my ground?

If you can afford it, boycott this unethical job offer and move on with your life. Of course if you're anxious about paying bills in the upcoming months, that is less of an option.

Sharing information/knowledge and helping one another is the foundation of any healthy society. Someone or some corporation trying to prevent you from helping someone (whether for money or not) is definitely a sociopath and is a danger to society as a whole. They will make your life miserable and will use you to make other people's lives miserable.

Seems like pretty standard language to me. Most of my jobs have had a non-compete clause similar to this one. It's obviously not great, but they're standard in states that don't forbid them. I've never been pursued.

I also tend to completely switch industry between jobs, so it would be pretty stupid for a company operating in the HFT space to sue me when I join an online sports betting company.