9 ms·

Tell HN: Beware confidentiality agreements that act as lifetime non competes

• transactional 1y ago
  ...but are they enforceable?
  • throwarayes 1y ago
    So far it seems maybe?, but according to the article some courts and agencies are pushing back. Well the FTC was at least in 2023. California bans anything that is effectively a non compete.
    • codingdave 1y ago
      I didn't see any references in the article you linked to any cases where it had been enforced. I see a lot of commentary that validates the concern, and a listing of half a dozen states where they are being struck down. So the callout to be wary of them is totally legit... but it doesn't look like they are going to be enforceable when such things go through the courts.
      • throwarayes 1y ago
        Yeah the warning is: you may, like me, find a litigious paranoid former employer who freaks out at everything :-/ I’d rather not carry the cost of learning it’s not enforceable.
    • epolanski 1y ago
      Well since OP's giving that warning he might've been impacted and could tell us more.
    • ryandrake 1y ago
      Technically, maybe, but effectively, nobody is going to be able to withstand BigCorp's 100 lawyers whose mission is to bury you in legal fees if you push back. By the time that you confirm these things are unenforceable, you've spent your life savings on $millions in legal fees, and possibly gone into crippling debt. In the legal system, might (wealth + lawyer quantity) makes right.
      • eirikbakke 1y ago
        As I recall from John Akula's Corporate Law class, judges in the US tend to be sympathetic to the following argument: "Defendant has never worked in any other industry. He has three kids. He's gotta work." (That's for regular employees--it's a different issue with founders who may have significant equity stake and such.)
      • cyberax 1y ago
        The "bury in litigation" is overstated. Since it's the _company_ that is going to sue you, there's a limited amount of shenanigans they can do. The worst is that they can delay the case for years, leaving you in a legal limbo. Or go after your employer, involving them in the discovery process.
      • gopher_space 1y ago
        It sounds like moving to California for a year would be way cheaper.
        • ghaff 1y ago
          You'll probably still end up in court even if the plaintiff will likely lose. Maybe cheaper, maybe not.
    • vonunov 1y ago
      They tried: https://www.ftc.gov/news-events/news/press-releases/2024/04/ftc-announces-rule-banning-noncompetes https://www.ftc.gov/news-events/news/press-releases/2024/04/... (see top note) Not sure how that's going.
  • jauntywundrkind 1y ago
    To riff Keynes, Enforcement can maintain litigation longer than you can maintain solvency.
    • teeray 1y ago
      And that’s our judicial system: whoever has more ability to sustain prolonged cash flow wins.
  • prerok 1y ago
    IANAL and I don't know about other countries, but in EU (definitely the country I live in and am pretty sure it goes for the rest as well) any non-compete agreement after two years is void by law. You are required to hold confidential stuff for life, like business contracts, but you can use your know-how, if it does not violate any patents, in a competing company as you see fit. This knowledge is a part of you and cannot hold you against employment. Even if you do decide within those two years to employ yourself in competing company, this can be held back by your original company only if they give you X% of your pay at them (X can be 80, or as low as 50, as my friends inform me).
    • ghaff 1y ago
      I've actually dealt with this in third-party IP cases I've consulted on. Of course a lot of "bench advice" best practices (use a debugger as a silly example) shouldn't cause a problem--or maybe even some various specific experiences about practices that worked. A file dump of corporate strategy and business plan presentations or code--even if they probably get pretty stale after a few years--probably not.
• kirubakaran 1y ago
  It's funny how states like Washington are notorious for enforceable non-competes, to be "business friendly". Meanwhile California bans non-competes, and its GDP is 4th largest in the world if it were a country! "incumbent friendly" vs "startup friendly"
  • llm_nerd 1y ago
    I'm pro-California and anti-noncompetes, but I'm not sure if this evidence demonstrates much. The banning of non-competes in California is a very recent thing, and if we're doing a correlation thing, California saw the vast bulk of its growth when non-competes were in effect.
    • karthikb 1y ago
      The Traitorous Eight would only have been possible in California, not Washington, because of the position on noncompetes.
      • ghaff 1y ago
        On the other hand, moving between (and founding) minicomputer companies was a thing for a long time in spite of Massachusetts being fairly non-compete clause friendly until very recently. And arguably, current laws enacted against some fairly strenuous tech company opposition force companies to put some skin in the game but are still a pretty raw deal for employees who can't afford to sit on the bench for 50% of their former base. (Which is what I think relatively recent legislation calls for.) I'm against non-competes except in narrow cases. But a lot of people probably give the general inability to enforce non-competes in California too much credit for CA tech success in spite of one story in particular.
    • haxton 1y ago
      California has banned non competes since 1872. You might be thinking about non solicits which was 2024 also reaffirming the ban on non competes
    • loaph 1y ago
• OutOfHere 1y ago
  What exactly should one be on the lookout for? Practically every company has an IP confidentiality agreement.
  • Traubenfuchs 1y ago
    Yeah, good luck being the odd one out who wants special individualized contract. This might work for unicorn value level employees that are poached from one FANG to another but not for the average Joe.
    • OutOfHere 1y ago
      I never said I want an individualized contract, but I reserve the right to reject the offer, and I have, when the contract is unreasonable. What I want to know is when exactly to reject it wrt the confidentiality agreement.
    • mapmap 1y ago
      In my experience, as a normal non-unicorn employee at a large corp, I was able to have my contract modified. It required advice from an employment law lawyer that cost a few hundred dollars and a couple emails with the company’s general counsel. You can change these contracts. Hiring people is difficult and once the company has made that decision they don’t want to lose you over a contract clause.
      • anticensor 1y ago
        Some companies are literally legally barred from individualising employment contracts due to active union or government contracts they have.
    • OtomotO 1y ago
      I had every single one of all my contracts (as employee and one-nerd-business) adapted in minor or major ways. I am good at what I do, but no unicorn and not FANG "level". But then again, I don't live in the US
    • 1y ago
• btilly 1y ago
  This is a state level thing. As is whether IP produced outside of your job, on your own equipment, is yours. I moved from New York to California a bit over 20 years ago in large part because I personally encountered this (the IP ownership bit), and preferred to live under California's rules. It is worthwhile to read https://www.paulgraham.com/america.html https://www.paulgraham.com/america.html. Point 7 talks about how easy it is for regulations to accidentally squash startups. I believe that the fact that California makes neither mistake causes us squash fewer startups. It is not sufficient to have made Silicon Valley a startup hub, but it was likely necessary.
  • throwarayes 1y ago
    It also depends on the laws governing your contract, not just where you live.
  • xhrpost 1y ago
    Just looking this up but appears NY finally caught up here in 2023 https://newyork.public.law/laws/n.y._labor_law_section_203-f https://newyork.public.law/laws/n.y._labor_law_section_203-f
    • btilly 1y ago
      Thanks for the correction. It was only 20 years too late to help me.
      • Esophagus4 1y ago
        I would love to hear whatever you’re comfortable sharing of your (anonymized) story, if you’re up for it!
  • arnonejoe 1y ago
    I usually add this at the end of the agreement and if they wont go for it, I move on: This agreement shall not apply to any inventions, conceptions, discoveries, improvements, and original works of authorship that [my name] developed entirely on their own time without using [the employer](s) equipment, supplies, facilities, trade secret information, or anything not based on or received from [the employer].
• matsemann 1y ago
  So happy my union managed to ban broad non-competes in my country ~8 years ago. Now it needs to be very specific if they want to enforce it (not just "development work in the same industry" which most contracts had back when I graduated), only applicable for maximum a year, and they have to pay your salary for the time they stop you working somewhere else.
  • autobodie 1y ago
    [flagged]
    • throwaway173738 1y ago
      So are corporations.
    • theoreticalmal 1y ago
      Sounds like the union negotiated a heck of a deal for the parent poster
    • superb_dev 1y ago
      I don't care about the free market, I just want food and shelter for my family.
    • arunabha 1y ago
      Care to back up that definitive statement? Or is it just a pavlovian reflex?
    • mitthrowaway2 1y ago
      How is a union any different in that respect than a corporation? I mean on a theoretical level. A true free-market firm would just be an association of individuals making individually negotiated transactions, with no employee-employer relationship, and no coordination on the side of purchasing labor. Of course that's very inefficient outside of pure theory. A corporation acts as a coordinating body that collectively negotiates the purchasing of labor contracts, and a union collectively negotiates on the selling side.
  • 1y ago
• stego-tech 1y ago
  Have an employment attorney always look over said agreements before signing. A local acquaintance who did work for an MSP had said MSP try such a ploy, only for the employment attorney to sue and get it thrown out as unreasonable and unenforceable. Never, EVER sign a contract without reading it first, and having your lawyer review it.
  • iLoveOncall 1y ago
    > your lawyer That presupposes that people have a lawyer, and one specialized in employment law at that, which is highly unlikely to be the case for 99% of the population.
    • throwaway173738 1y ago
      Sometimes general employment law is not enough and you need someone who specializes in executive contracts for upper management.
    • stego-tech 1y ago
      A good employment law lawyer is A) not at all hard to find in major metros, B) charges reasonable rates for quick turnaround times, and C) is something more people need to have on their side in general, rather than elevating them as some snooty thing only the elite have. This whole “bUt WhO hAs A lAwYeR” nonsense I’m being blasted with in my comments is exactly why these sorts of contracts, grifts, and scams are allowed to exist and succeed. Know your rights, get a lawyer, and then share that knowledge with others. It’s Organizing 101 stuff.
      • ghaff 1y ago
        Yeah, as far as I know, I've never needed one (aside from very routine real estate) but I've had to get a couple lawyers recently for different purposes--through my neighbor. I know lawyers but not in the field I need. Sort of a PITA but just something you need to do sometimes.
    • kragen 1y ago
• exe34 1y ago
  > They argue it would be impossible for you to work elsewhere in this industry during your entire career without violating confidentiality with the technical and business instincts you bring to that domain In that case you need to ask for a lifetime worth of salary, including growth from being in position to be put in escrow before you sign the dotted line. Otherwise they can hire you and fire you immediately and you'd never be able to work in your field that you spent years/decades training for.
  • lazide 1y ago
    Realistically, most places ban ‘unconscionable’ contract clauses, either explicitly or by making them unenforceable. At least in theory, any judge that saw clauses like that should throw it out for that reason alone in those jurisdictions.
    • duskwuff 1y ago
      Precisely. And, at least in the US, any contract which makes it impossible for a worker to take a new job in their field is extremely likely to be found unconscionable. It doesn't matter whether the contract is cast as a non-compete or as a NDA; if its effect is to say "you must work for us, or not at all", it's unlikely to hold up.
      • ghaff 1y ago
        Maybe. I've known companies in the IT industry that took a very hard line on non-competes. Whether they won in court, I don't know. But I've know people who took a year off rather than involving the lawyers. Small pretty well-defined segment of the industry and a couple of the big players apparently did take it seriously. (Never worked for either.)
        • lazide 1y ago
          Just because the employer ‘takes it seriously’ doesn’t mean the court won’t laugh at them. In my experience, the more the employer puts up a show, the more unenforceable it is.
• ivan_gammel 1y ago
  If I understand it right, those NDAs work as non-competes if “confidential” is defined as restricted just on the basis of some relationship to the business, which is pretty weird attack of legalese on common sense. Let’s say I used some relatively simple chain of thought to derive X about my job at Z. The fact that Z uses or does X is probably confidential, and that’s ok. This would be how I understood a broad definition. But what kind of reasoning would conclude that X is confidential per se, preventing me to use or do X elsewhere, effectively making doing my job impossible? It just doesn’t make sense.
• gwbas1c 1y ago
  I once declined a job offer because the non-compete made no sense. (It was many pages, claimed that I would be paid during the non-compete period, and impossible to read.) I basically concluded that they (the company) had a lawyer that was basically wanking off.
  • senkora 1y ago
    In finance, it is common to be paid your base wage during your non-compete. Or at least that is how mine worked.
    • paxys 1y ago
      Yup, garden leave.
    • dylan604 1y ago
      That seems like something ripe for being gamed. How do they protect from someone just quitting and continuing to get paid?
      • thw09j9m 1y ago
        They're not obligated to enforce the non-compete. If you don't have any sensitive information to take to a competitor, they might not give you any garden leave. OTOH, I've seen non-competes as long as 2.5 years from places like Citadel.
        • kccqzy 1y ago
          What's worse is actually those non-competes with a variable period. The company doesn't have to tell you in advance how long it will be; only when you hand in your resignation letter will they tell you. It entirely serves to make your job hunt more difficult.
          • throwaway2037 1y ago
            Jesus: What jurisdiction is this? And what dummy signs a contract like that?
• secondcoming 1y ago
  A few years ago an American company that approached me (UK based) about a job opportunity insisted I sign an NDA before I could interview with them. I refused and they couldn't understand why so they even put me in contact with one of their lawyers. I still refused, and they eventually relented, but I could never understand why I'd need to sign an NDA to attend a job interview. There's literally no benefit to me in doing so. At the time I was working for a competitor and I figured they could use the fact that I interviewed with them to argue that I - either intentionally or unintentionally - gained proprietary knowledge of their product and my current employer gained from it.
  • lanyard-textile 1y ago
    If you’re an employee under NDA, and your company considers almost everything about your work to be confidential, you can’t effectively paint a detailed picture for the role. The NDA gives them some protection to answer your questions openly and transparently.
    • throwaway2037 1y ago
      You had to know your response would get no love here on HN. You seem to be missing the point that this is like a free option for the interviewing company. Did they offer to compensate this person... say 1000 USD per hour to interview? I doubt it. As a result, the person signing this NDA has 100% of the downside, with no upsides except a "potentially lucrative job offer". That seems like a wildly unequal offer.
      • lanyard-textile 1y ago
        You know, in moments like these, you have an opportunity to build a connection — to meet someone in the middle who sees the world a little differently, who is perhaps indoctrinated into a disrespectful aspect of capitalism and is unable to see through it yet, or who perhaps offers a perspective you don’t have yourself. And you slam dunk any chance of connection for what seems to be the sake of argument and posture. All because of a difference in opinion? Because you have the mighty all-seeing eyes of an objective opinion we should all see through too? I “had” to know my response would get no love? The only mistake I made here is my continued thought that this was a place for some kind of industry togetherness: It is just a constant stepping over each other for no apparent reason than to satisfy a kind of unfulfilled ego. I wasn’t concerned with how much you would love my response. I didn’t cater it for you. You are not the only person in my god damn universe. It was meant to be my authentic perspective, to be helpful, or to invite conversation and debate if I missed another perspective unhad. But with responses like these, gosh, why bother? What a waste of my love. I think the argument you made is just an entirely different one. The inequality in your argument is basically whether you should be compensated for interviewing with a company — which, I don’t know what’s economically fair there and I’m not making an argument about. I’d love to be paid to interview :) I don’t know the economic impact of it though. I wonder if it would just lead to more selective hiring practices and worser mutual fits. Requesting payment for just the NDA is weird to me. Without something like this, you’re asking the company to provide detailed specifics of the role you’re interviewing for, but you won’t give them any legal peace that you won’t run away with the secrets you learn: It’s a free and permitted distribution of anything your interviewers go and share with candidates. It leads to interviews where you have no idea what the role actually is and what you’ll be doing on the job. Every question stonewalled with a generic answer so the employee doesn’t get in trouble. An atmosphere of curation and inauthenticity, to gauge how you will potentially spend years of your life. Lovely.
• tgsovlerkhgsel 1y ago
  OTOH, beware letting yourself be intimidated by scary looking but unenforcable clauses that are all over contracts. In doubt, spend a bit of money on a lawyer to figure out what your real situation is. I know of several cases where lawyers said "don't bother arguing with them about clause X, just sign it and ignore it".
  • voidfunc 1y ago
    This is pretty much the advice every lawyer has given me in the past. The likelihood of it coming up is very low. Sometimes it's good to not be special.
    • ghaff 1y ago
      The one time I had to sign a non-compete--because my company was acquired--I just signed it because it was quite specific and I wasn't going to be an exec of a storage company anytime soon. Probably didn't matter much because I left a few months later anyway.
  • BobbyTables2 1y ago
    I suspect our primary school upbringing of “follow the rules” holds a lot of people back. Seems like a lot of successful people in business know exactly how far they can step over the line without suffering serious consequences.
    • thfuran 1y ago
      Societies where no one has any regard for rules aren't great either.
      • inetknght 1y ago
        You can't make billions of dollars by following rules...
        • epicureanideal 1y ago
• dakiol 1y ago
  In some countries that's illegal. So when presented with a contract that contains such claims, I have 2 options: 1) ask them to remove it... and so I risk not getting the job 2) don't say anything, and sign it If I'm really interested in the job, I'll go for option 2 because I know they cannot enforce such claims, so I'll be fine.
  • coderatlarge 1y ago
    i personally consider bad legal clauses in employment contracts a seriously negative sign about the employer. if they’re trying to pull that sort of thing at hiring, what are they going to try to do later when you’re fully committed?? is executive leadership simply unaware or do they condone that sort of thing??
    • mystified5016 1y ago
      Well, yes. That's how we do business in the USA. It's literally unavoidable unless you can afford to spend a year or three declining offers until you find a unicorn with a sane contract. Approximately all businesses explictly try to exploit workers to the full extent of the law. That's what capitalism is and it's how we've structured our society.
      • coderatlarge 1y ago
        social media shaming has worked in a few high profile companies like openai recently. especially when founders are still around and feel some personal culpability when their company’s values are on display. but i think your broader societal point stands though. especially with horrible language in vendor contracts that people click through because who has time for that garbage. i hope llms will help people push back in somewhat more concerted and systematic fashion.
  • epolanski 1y ago
    The fact that something isn't enforceable does not mean it won't be a giant headache to prove it in a court in a foreign country.
• sim7c00 1y ago
  sounds crazy. in my country, adding anything that prevents you from finding work in the future to a contract is kind of invalid. you do get non competes etc., but it never holds up in court as you can easily prove it prevents you from finding jobs. i wish for you in your legislation there might be a similar law, otherwise these things are really evil. i mean, its like prison in some fields niche enough, and those are exactly the fields prone to such overly protective clauses
  • anilakar 1y ago
    > adding anything that prevents you from finding work in the future to a contract is kind of invalid. Here it's six months top, and it only applies to management and specialists with critical domain knowledge - and this also has to be reflected in their wage.
• almosthere 1y ago
  New definition for the word Irony: AI companies protecting their IP.
• tianqi 1y ago
  I think the Chinese law is effective in this regard: in order to maintain any non-competition agreement, the company must continue to pay you a monthly compensation amount equal to 30% of your total monthly income when you were at the company. Whenever the payment stops, the non-competition agreement is automatically void.
  • coderatlarge 1y ago
    can you choose to refuse these payments to avoid the responsibility?
    • whiplash451 1y ago
      I’ve seen this is France and UK but it lasts only a few months and no you can’t refuse the payment - but the company can refuse to pay and set you free.
      • v5v3 1y ago
        In UK it's called gardening leave. A period when you are still employed but not at work and can't join another company without agreement. Uk law generally is that non compete clause is ok, if the length of time is reasonable. But you can't stop a person with a trade from applying that trade unreasonably. Most tend to be 3-6 months. Normally it's to stop a person leaving from stealing clients.
        • kelnos 1y ago
          US finance has the same thing, and also calls it gardening leave. In our case I think it's reasonably common for it to be as long as a year. Downside for finance folks is that the usually make a decent chunk of their compensation through bonuses, not their base salary. So their gardening-leave pay ends up being quite a pay cut, and while they're "gardening", they're out of the game for a year and their skills/knowledge becomes a little out of date.
          • 1y ago
• sgt101 1y ago
  Has anyone been caught by this? As in sued or prevented from working?
• viapivov 1y ago
  Like.. has anyone been sued for the violation of the non compete?
• timoth3y 1y ago
  Non-competes (including stealth non-competes like the OP mentioned) are being abused by US employers seeking leverage over their employees. In fact, 12% of hourly workers earning $20 or less had to sign non-competes. These workers do not have access to corporate secrets. It simply reduces their power to negotiate with their employer. https://www.minneapolisfed.org/article/2021/non-compete-contracts-sideline-low-wage-workers https://www.minneapolisfed.org/article/2021/non-compete-cont...
  • aforwardslash 1y ago
    Not only in the US; without going into too much detail, many countries in south America and Africa have strong business connections with the US, and it is quite common to see the ever-abusive dumb dumb US contract templates being used in those countries, even when local law differs significantly. Usually, the posture is "we can do whatever you want and you keep your mouth shut, or else we'll sue you for everything". I loathe organizations with these kind of contracts.
    • aforwardslash 1y ago
      On a personal note, I once was presented with such a (US) contract that also required me to list every NDA I had signed to date; Since then, I always assume most US lawyers are beyond incompetent.
      • bruce511 1y ago
        That's funny. Some NDAs I've signed prohibit you from mentioning any contact with the company involved (thus you're not allowed to mention the NDA) so my answer would be; "Under the terms of NDAs I have signed I am not free to disclose that list."
        • anticensor 1y ago
          Couldn't the employer convert that into a filter?
• josephcsible 1y ago
  I wish "inevitable disclosure" were totally turned on its head. If I were in charge, proving inevitable disclosure would happen would result in nullifying the NDA instead.
  • amatecha 1y ago
    Right, as in "I literally cannot comply with this"? Makes sense.
• neuroelectron 1y ago
  Too bad. I routinely reapply the exact same business logic across competitors. I even have proprietary source code collections I use for reference. If you don't like it, write your own software. Business methods are literally unpatentable. If you're not copying internal wikis, and poaching customers what are you even doing?
• v5v3 1y ago
  What happend to you?
• tptacek 1y ago
  For what it's worth, a noncompete that makes it effectively impossible for you to apply your profession anywhere for your entire career is unlikely to be enforceable in any state in the country. Companies that are serious about noncompetes for professionals (rather than hourly shift workers) generally do garden leave. I'd take a noncompete for a garden leave company seriously, and would maybe roll my eyes at a broad noncompete from a random tech firm. (Don't sign anything you're not comfortable with.)
• ww520 1y ago
  Not just employment contracts, some companies require NDA just for interviews.
  • airocker 1y ago
    IF you go to an interview, and nothing was divulged to you, this NDA does not mean anything. But if youwork at a competitor, and you get an interviewer tell you things that the company does not want to divulge, company has some protection. Not all laws and processes are bad.
    • wewtyflakes 1y ago
      Seems like the company should not opt to divulge that information then.
  • throwaway2037 1y ago
    > some companies require NDA just for interviews Like who? And what dummy signs these NDAs?
• awaymazdacx5 1y ago
  once you're - in you're in. we found we were bound like rats.
• airocker 1y ago
  So if you are against this, you are okay with Coca Cola’s secret to be divulged by any employee to any competitor? If you cannot let companies maintain trade secrets, you may as well close them down.
  • 93po 1y ago
    as far as i can tell there are a million sodas that are extremely close to coca cola and coca cola is still doing just fine
    • airocker 1y ago
      That’s my whole point. They are not using Coke’s formula
      • harimau777 1y ago
        But they are using functionally equivalent formulas and Coke is still fine.
        • airocker 1y ago
          if coke did not have deep pockets, it would have gone under without this protection.
          • 93po 1y ago
            there are a million different manufacturers of, for example, hot dogs, and those hot dogs basically taste all the same to everyone, and yet they're all making basically identical hotdogs and doing fine
            • airocker 1y ago
              But none of them would end up becoming Coca Cola. At least not just by selling hot dogs.
    • 1y ago
• kelnos 1y ago
  So tired of this garbage. I think non-competes (and the legal concept of inevitable disclosure) should just be banned completely. Sure, some things (like taking customer lists when you leave a company) are messed up and should be barred, but companies should just be required to accept the fact that their employees will take some "proprietary" knowledge/information with them to their next job. I don't even think that non-competes should be allowed for higher level employees/executives. Everyone deserves the right to change jobs whenever they want to.
  • sircastor 1y ago
    > Sure, some things (like taking customer lists when you leave a company) are messed up and should be barred Is it messed up? If you're a salesperson, and you've built the relationships with these customers is their loyalty to you, or to the company that you worked for? I had a personal trainer for a little while and he took all his clients to a new gym when he decided to contract with a different gym. I don't know the answer to this. But it doesn't seem as clear cut to me.
    • kelnos 1y ago
      Yeah, that's a fair interpretation. But I think the way I look at it is in a sort of "work product" type way. If I'm employed by a company to write software, I'm the one who wrote it, but I agree that the software I write is the property of the company, and I can't take it with me when I leave. Is a salesperson's "work product" those relationships, and does that make them the "property" of the company? I don't think it's reasonable to say that those relationships are solely between the customers and the salesperson; those relationships wouldn't work out in that way if the salesperson's company was selling garbage, or even just a product that those customers didn't want. That is, the good customer-salesperson relationship is both a function of the salesperson's personal skills, and of the good fit between the company's products and the customer. Ultimately, though, whatever you agree to in writing when you start the job is what you should honor. I'm fine with the law protecting people from predatory practices by employers (of which I think non-competes qualify, and employees shouldn't be able to sign away a right to change jobs like that), but if an employee signs something that says any customer relationships belong to the company, then that seems like a reasonable thing to me.
• bitwize 1y ago
  In common law jurisdictions, there's a term of art in law -- "unconscionable". It's when a contract is so egregiously one-sided that no reasonable person would agree to it, and it could be ruled unenforceable. It's not reasonable to expect an employee to build up a body of expertise in a field, and then agree to be bound never to work in that field again after leaving your current job. IANAL, but confidentiality agreements that act like lifetime noncompetes are good candidates for being found unconscionable, even absent an explicit anti-noncompete statute in your jurisdiction. (Other clauses you may rightly consider unfair, I don't know about.) Making things worse for the companies implementing such contracts is the fact that things change so fast now that they are unable to substantially benefit from such a contract. The contract is purely a CYA move. If you have agreed to lifetime noncompete terms, you may wish to speak to an employment attorney about how enforceable the contract actually is in your area.
  • anticensor 1y ago
    Civil law jurisdictions also have protections against one-sided contracts.
    • bitwize 1y ago
      Indeed, but I believe in common-law countries, unconscionability is one of those common-law things that apply even absent a statute spelling it out.
• wbl 1y ago
  IANAL but as I was told by some who are: They can say that all they want, but that isn't what the statutes or case law about trade secrets says. in California state courts take a very dim view of this sort of overreach.
  • fc417fc802 1y ago
    That is exactly what I'm wondering about. At least a few states have severely limited noncompetes and even outright banned them in specific contexts. I have to wonder if a nondisclosure twisted for use as a noncompete would survive the courts in one of those states. I'm also skeptical how enforceable this theory is in general. Have there been any noteworthy cases of employees getting screwed over that rested on it?
• throwaway2037 1y ago
  Hot take: Sign these agreements without worry. When you change employers in the future, make no public announcements about it -- don't post anything on social media, including LinkedIn. Do your best not to transfer any IP between employers. You will be fine. Finally: Yes, I think these agreements should be illegal. I recently signed a new employment contract that requires me not to disparage my new employer... forever. Literally: There is no end date. I could be an old man in a squeaky rocking chair that says something bad about my (then) former employer, and they have the right to sue me for breaking a non-disparagement agreement. I laughed to myself when I signed that contract.
• hk1337 1y ago
  Is there any precedent for this yet? This sounds like some overeager lawyers talking out of their ass hoping you don’t call them out for it? It sounds like it’s for a very specific situation that really doesn’t apply to most people.
• francisdavey 1y ago
  To chime in on how English law approaches this (and perhaps amplify some of the good points already made): the common law position is that any restraint of trade is contrary to public policy and so should not be enforced unless some exception can be shown. Post employment restrictions fall under the doctrine of restraint of trade - which explains why we use "gardening leave". While you are employed you and your employer have a relationship which includes a duty of loyalty by you to your employer. They have duties such as a duty to pay you for your work. By default they should also be offering you work, so a specific "gardening leave" clause is required to keep you at home, bound by restrictive covenants but without work and being paid. After employment, it is much harder to make restrictions that will bite. Typically an employer must show there is some legitimate interest they are protecting and that it is reasonable to do so. Hence: non-solicitation of clients tends to be easier to justify, though only if an employee actually had some kind of relationship with or knowledge of those clients. Whereas a non-compete is much harder to justify. It is also harder to make reasonable, hence time/space/sectoral limitations. Looking at confidentiality: the default established in the amusingly named Faccenda Chicken v Fowler (Mr Fowler was a frozen chicken sales lead). It is that you are bound by the usual duties of confidentiality that arise when anyone has confidential information but that you cannot be prevented from using information gained while working that is part of your normal skill acquired as part of the job unless that is so secret as to amount to a "trade secret". In this case, Mr Fowler knew where to sell chicken (from having done so). While this was confidential, he was able to use that information (not being a trade secret) in setting up a competing frozen chicken sale network. The core idea is that you can't stop someone plying their normal trade. That's the default. Obviously if you sign an agreement that imposes post-contract confidentiality obligations it can go further than Faccenda Chicken, but if it went too far, it would also be vulnerable to the rule against restraint of trade. In short:this sort of "you cannot work in the industry" idea is very unlikely to work in England and Wales (and I suspect the rest of the UK - though I am strictly only an English lawyer). That said: there is still value in reading your contract of employment carefully and making sure that you are happy with it.
• chaosprint 1y ago
  isn't this illegal? I mean even patent has 20-year limit
• b800h 1y ago
  That's the terrible Wikipedia article. It says nothing at all about juridictions in which it's considered a valid legal principle. I notice that someone seems to have just flagged it "unclear".
• szundi 1y ago
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• BrandoElFollito 1y ago
  Of course this depends on the country. This is a non-issue in France for instance where this topic is strictly regulated and heavily leaning towards the employee.
• deleted 1y ago
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• ungreased0675 1y ago
  Non-competes should be illegal. If someone is so valuable that them leaving for a competitor would severely damage the business, then pay them more. Do their laundry. Hire someone to drive them around. Give them a personal chef. Etc.
• didntknowyou 1y ago
  most country's employment law would hold up against NDA/non-competes if they do try to sue
• getcrunk 1y ago
  I thought a few states maybe California or New York effectively made non compete not enforceable
• Travelhack 1y ago
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• gadders 1y ago
  "Unconscionability is a doctrine in contract law that describes terms that are so extremely unjust, or overwhelmingly one-sided in favor of the party who has the superior bargaining power, that they are contrary to good conscience. Typically, an unconscionable contract is held to be unenforceable because no reasonable or informed person would otherwise agree to it. The perpetrator of the conduct is not allowed to benefit, because the consideration offered is lacking, or is so obviously inadequate, that to enforce the contract would be unfair to the party seeking to escape the contract." https://en.wikipedia.org/wiki/Unconscionability https://en.wikipedia.org/wiki/Unconscionability