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Non-compete Agreement
Inking a deal with my new employer
stuntdubl




msg:793368
 10:13 pm on Nov 1, 2003 (gmt 0)

I am about to start work with a new employer. My current employer is in the hospitality industry so they have no problem with me doing website work in my spare time.

My new employer is strictly computer related services, and wants me to sign a non-compete. I was planning on bringing my current clients to the company, but I am a bit concerned about the non-compete.

It is for the term of a year, and doesn't have any information on the proximity restrictions.

Anyhow...I've heard that many non-competes don't hold up in court, and chances are I won't have to worry about it (they seem like a very good employer), but I want to have my bases covered.

If anyone has much experience with these, please let me know what I can do to cover my backside.

 

TomWaits




msg:793369
 10:28 pm on Nov 1, 2003 (gmt 0)

I've always consulted a lawyer before signing non-competes. It's not that expensive considering the downside of signing an especially egregious one.

Speeeedy




msg:793370
 10:50 pm on Nov 1, 2003 (gmt 0)

Best bet: do not sign a non-compete. Ask for him to come to a compromise with a slightly better offer in your favor. Be honest and tell him you need more security. It's not worth the risk.

As TomWaits said, you should also consult a lawyer, especially since it lacks any information on the proximity restrictions. You could also ask your employer to revise that part of the contract, if it makes it more appealing for you to sign.

--Jim---

Webwork




msg:793371
 4:47 am on Nov 4, 2003 (gmt 0)

Non-competes are upheld when they are reasonable as to scope (what is limited), geography (got it?) and duration.

I am NOT a big fan of non-compete agreements. There's always something a bit desparate about them. There's ALWAYS going to be competition.

Basically, what should be agreed upon is "I won't steal your clients even if they want to come with me".

Address their concern and your concern directly. You could probably write the agreement yourself - and should, if they are dealing straight.

"Agreement: I promise, that should I no longer be employed for any reason, I will not solicit or accept work from clients of this firm - even if they ask me nicely. You promise that any clients that I bring to the firm will remain my clients should I no longer be employed for any reason and you will neither solicit or accept work from the clients I bring to the firm - the names of which are attached hereto, and will included future additional clients specifically refered to this firm through my existing client list." Both sign. Both get signed originals.

End of agreement.

If you can't pull together an agreement "of this nature" in less than 1 page, double spaced, then someone is looking for an out and forget it.

It's one thing to anticipate a million contingencies. It's another thing to interpret the nuances of 20 pages of contingency language. The best contracts exist in the spirit of the persons making them. If you "are being sold" the deal - walk away. If the conversation is simple, straightforward, no nonsense and the person is surrounded by people who respect him/her (not the respect of fear, yearning, etc. - but the admiration of simple decency) - make the deal.

So much of business is being able to read people and choosing to trust your instincts.

Screw the fancy multipage non-compete agreement prepared by the shyster. People tend to regret signing them. I've reviewed a few. Litigation to enforce or break or even interpret them is expensive and, more often than not, filed with a certain punitive attitude by snubbed or scared employers.

As always, this is NOT legal advice. Each State/country has different rules, consult with a lawyer, etc.

Jeff Esq.

stuntdubl




msg:793372
 7:18 pm on Nov 4, 2003 (gmt 0)

Thank you webwork.

I may actually use a portion of your post as my "counter non-compete".

I was a little disappointed that they sent a non-compete with my acceptance letter (they had not even mentioned it).

They seemed very up front about everything to that point, but the non-compete was a bit off-putting. The most offputting part is that it was for a year...had no proximity restrictions written in, and said that if I were to leave I had to notify them where I was working (in writing), and a description of what I was doing.

I think they let some lawyer go overboard, and have just used it as their standard form. No one else probably raised a stink, and just signed it, but I couldn't do that in good concscience (if they are going to cover their butt, I am going to too;).

Thanks guys.

TomWaits




msg:793373
 1:30 pm on Nov 5, 2003 (gmt 0)

A year's not too terribly bad. The one's that have been presented to me have ranged from 2 to 5 years. Not webmastering field, though.

Macguru




msg:793374
 2:01 pm on Nov 5, 2003 (gmt 0)

I have this precedent with non-compete clause. I never signed it, but went to work anyways since we verbally agreed on some dead line and temporary billing. I will never do that again!

Spent a lot of time and money in court afterwards, while they where trying to force that clause on me, even if I didn't sign anything! They lost the cause and I lost time and money.

From that time, I react to non-compete clause by turning them into an exclusivity clause and triple the wages. They usually get the message.

I never talk about clients to clients.

stuntdubl




msg:793375
 4:55 pm on Nov 5, 2003 (gmt 0)

From that time, I react to non-compete clause by turning them into an exclusivity clause and triple the wages.

Could you please explain an exclusivity clause to me?

I am trying to negotiate terms with them (when they are back from vacation next week) similar to what webwork mentioned.

chicagohh




msg:793376
 7:54 pm on Nov 5, 2003 (gmt 0)

I wouldn't worry too much about the NC. I have broken every one that I signed. I have walked dozens through breaking their (I was a HeadHunter in a former life) NC's.

If you want to be safe - encourage them to make the contract as limiting as possible. Multiple year duration, 100 mile geographical limit, unlimited damages - etc.

jamesa




msg:793377
 5:55 am on Nov 6, 2003 (gmt 0)

>> if I were to leave I had to notify them where I was working (in writing), and a description of what I was doing

Gawd, I wouldn't sign that.

I've heard that anything over 6 months has been difficult to enforce... anyone know if there is any truth to that?

stuntdubl




msg:793378
 4:47 pm on Nov 6, 2003 (gmt 0)

If you want to be safe - encourage them to make the contract as limiting as possible. Multiple year duration, 100 mile geographical limit, unlimited damages - etc.

I knew they had a good lawyer when I read this clause:
Validity
If this Agreement shall be held by a court to be invalid or unenforceable in any respect, the Agreement shall be narrowed by the court to the extent required to be enforceable.

I am sure you can find holes in any non-compete if you look hard enough, I just don't ever want to have to pay someone to be looking for them.

jmbishop




msg:793379
 9:22 pm on Nov 6, 2003 (gmt 0)

A few years back I turned down an offer based solely on the non-compete they presented. They wanted me to not work in the web field for 3 years after quitting/being terminated.

I explained that this was unacceptable. That web work was my career not just a hobby that I could switch to something else for a few years. I said I would agree to not target any of their existing customers for 3 years following my leaving but that I couldn't make any promises about not actively seeking other clients in the community.

In the end they wouldn't agree to my terms and stopped negotiations. Since then I have taken 6 clients from them.

mattglet




msg:793380
 3:15 am on Nov 7, 2003 (gmt 0)

that has got to be the most absurd thing i have ever heard an employer try to do.

-Matt

Lilliabeth




msg:793381
 5:52 am on Nov 7, 2003 (gmt 0)

I have signed a few and have had others sign them for me many times. Never a problem, never seen one so full of jargon that it required a lawyer. Never broke one and never had one broken where I wasn't agreeable to it.

Where I work we sometimes make "stars" out of employees, bragging them up, publicizing them, and investing in them. What can a company do to set themselves apart, make them seem better than the competition? Have better people, or at least appear to have better people. Smarter, better-looking, more articulate, and better-known.

All so that employee can develop a big head and leave to go to work for himself, or worse, for my most-hated competitor, taking that star-status with him, probably with my customer list in hand?

Nope, whether enforceable or not, non-competes will make most folks stop and think, because they did make an agreement; they signed it, they shook on it. Most of us still care about keeping our word.

stuntdubl




msg:793382
 5:03 pm on Nov 7, 2003 (gmt 0)

Most of us still care about keeping our word.

That is a concern to me, thus, I want to iron out the details before committing.

I think I would rather not take the deal than break my word.

Never broke one and never had one broken where I wasn't agreeable to it.

Do you think this is a reasonable agreement though Lilliabeth? They are not a "big-time" firm, but rather a smaller operation with only a handful of people that work on the web.

I will probably be bringing at least 1/3 more web business to them with JUST the clients I have now.

I hate this game of "cover your ass", but I guess I know it is necessary.

Lilliabeth




msg:793383
 6:26 pm on Nov 7, 2003 (gmt 0)

stuntdubl,

I like this:
Agreement: I promise, that should I no longer be employed for any reason, I will not solicit or accept work from clients of this firm - even if they ask me nicely. You promise that any clients that I bring to the firm will remain my clients should I no longer be employed for any reason and you will neither solicit or accept work from the clients I bring to the firm - the names of which are attached hereto, and will included future additional clients specifically refered to this firm through my existing client list." Both sign. Both get signed originals.

I'd need for you to delete the "and will include future additional clients specifically referred to this firm through my existing client list." Not only is it too vague, but I'd even be a bit put off that you wanted that in the agreement; I might start to question if you are ever going to be a good team player.

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