Now that I'm independent I do work for various people. When doing a large project I expect that I get a NDA from the client. No problem. But, a new client sent me a contract which included a non-compete section. It seemed to be worded with a W2 employee in mind. It states that the Programmer (me, the consultant in this case) can't work for any competition of theirs directly or indirectly for 1 year after working for them. Then, a bunch of "you can request permission" stuff, and if you can't get a job because of this provision they pay you 80% of your salary until you can. All wording which seems reasonable for a salaried employee. But, not a consultant. I sent an email back saying I wouldn't sign it unless that section was removed, as I couldn't agree to having my income limited because I do work for them, and since I'm not salaried.. 80% of no salary is $0. I haven't heard back yet (it's Friday, so didn't expect to).
Then I started to wonder how enforcable something like this would be anyways. If you worked for Acme Corp, left (or was asked to leave) the company, then was hired by Widget Corp (Acme Corps bitter enemy).. what could Acme Corp. really do about it? I once worked for a company which hired someone who was a consultant. The consulting company tried to pull some legal stuff on the guy, but didn't seem to be able to enforce it. I figured I could just sign that contract and a) the company would never know who I did work for anyways, or b) couldn't enforce anything. But, I just don't like signing things I don't agree with and don't want to have the possability of any legal hassles.
Does anyone know of any cases where a non-compete was broken and successfully enforced? And, if so.. what was enforced? Did the person have to quit their job? Pay money?
Re:What gets me...
jordan on 2003-12-20T15:41:57
- ...
is when these contracts are considered "normal" and "justified"... yet nobody would consider asking a pro baseball player or an actor to sign something so silly.
Bad analogy with the pro baseball player. Pro baseball players work for an organization, exempt from anti-trust legislation by congress, that can pretty much determine where you work, what you can get paid and for how long.Re:Bad analogy...
phillup on 2003-12-21T16:18:22
Seeing how I don't watch or follow any sports... I'll trust you on that.
Hopefully the finer details didn't obscure the point.
Are you saying that baseball could be stricter than "normal" about non-compete clauses? If so, I wonder even more why they aren't...
I mean... you spend a lot of time and money training a jock, and literally build your organization around the people... seems you'd want to drastically limit their ability to find work elsewhere.
And what about IP? (Probably the wrong term there) If you can keep a programmer out of the market because some of the "business process" (or whatever they are calling it) might leak out at the next employeer... how on earth can they justify an athlete working for another organization? No way they will not use what they acquired (in skill) from their previous gig.Re:Bad analogy...
jordan on 2003-12-22T11:59:25
- Are you saying that baseball could be stricter than "normal" about non-compete clauses? If so, I wonder even more why they aren't...
I guess I did change the subject a bit. There aren't non-compete clauses in pro sports contracts, per se, but the Commissioner has absolute power to alter or disregard contracts under his authority to do what's "good for Baseball".
Witness the recent Rodriguez-Ramirez trade. While it's true that the Player's Union lobbied against the trade, the Commissioner stepped in and disallowed it under his authority even though it was allowed under the rules of their respective contracts.
Re:It varies
KM on 2003-12-20T16:30:28
Makes sense that it varies from state to state. But, in states that it is enforcable, how can it be "enforced"?
If the employer is in Oklahoma and your in NY, can Oklahoma law enforce it on the person in NY?
In this case, I'm a consultant, so wouldn't be cowed in being in line with it, and won't even sign it. If I were a W2, I would. Especially since the provision says it will pay 80% of your salary if you can't find new employment because of the provision. That, I hadn't seen before and is fairly programmer friendly. But, no W2 no agree for me:-) Re:It varies
jordan on 2003-12-20T16:37:31
IANAL. But, I think that these non-competes usually contemplate that you'll be competing locally against them.
It's not a crime to break these anyway, it's civilly actionable. So, in your example, you might be sued in a Oklahoma court. I think what happens if you lose and don't comply can be very complicated and varies, here it comes, from state to state. I think often, you can just ignore civil judgements in other states. They can seize any property you have in the state in which you lost. I believe that for large judgements (think OJ Simpson) states enforce each others' civil judgements, but I'm not sure how that works.
If you go to nolo.com and check out their employment law section I think they cover non-compete clauses and the like.
Re:Actual lawyery info
KM on 2003-12-29T16:40:45
Thanks Fletch. I found this in there. Seems like, as I suspected, they are sort of hard to enforce and some states will not do it at all. This article didn't cover all details of non-competes, but had some good points.It seems they are most enforcable when a reasonable timeframe is given (I've seen some which state 3 years!), and actual competition is mentioned. That makes sense. In this field, when a non-compete mentions "competitors" and the company does webhosting, mail hosting, or basically anything web-related, then most companies could fall into this bucket. Being specific to which companies seems it would help the company be able to enforce it. But, leaving it general seems like it would help the employee.
Thanks for the link. As for the one which sparked my questioning, they said they would remove that clause completely. The article on the site doesn't mention any differences between employees and sub-contractors. But, I'd assume it is even harder to enforce against a sub-contractor.
I once worked for an outsourcing company, and their default non-compete said you couldn't work for *any* clients which the company has. Before I started working for them, I had them change it to word as I wouldn't do work for their clients which I had actually done work for while under assignment from them. They had about 200 clients, many local employers... and surely wasn't going to restrict myself from future employment.
I'd still like to know of any cases where someone had one of these enforced on them successfully.
