Tell HN: I got screwed by my employer
I worked in a consulting company in my country of origin and I was bootstrapping a startup in the meanwhile. A few weeks ago I moved to another job in another country. Now I have to close my startup because my employer does not allow it.
There are posts like this one http://blog.asmartbear.com/working-startup.html that tell you that usually things go well in this regard. While I don't doubt it, it wasn't my case. If you want to start a startup while employed, be very careful on this matter.
Actually everything seemed ok with this at first. I was hired in my current position because of my startup (I have an iPhone developer position here and the only iPhone development I ever made was in my startup) and during the interview I was asked if I wanted to continue to keep my startup after switching job. I answered yes to that question and there wasn't any issue about it.
I received my contract just a few days before leaving my country and there was a non competitive clause on it. Nothing strange, only a clause stating I can't compete with my employer while I am employed and I was in no way competing. So everything looked fine to me.
But when I got here I discovered that I'm not allowed to do any development out of the company, for myself or for anyone else, in any form (paid or free, open source or not), even if it is not competing in any way with this company. This is because they think that this would take my focus from my current job and since they give me a good salary and enough interesting challenges in my job, I don't need anything else (these are exactly their words).
I think this is very stupid and inconsistent. Stupid because I can just find any other passion that can take my focus from my job, or just get drunk every night (they actually encourage parties and drinking!). Inconsistent because they hire people that did extra projects out of their previous jobs. Then, when you are here, they forbid it. I think that as hackers you can imagine all the other flaws in this way of thinking and why it actually hurts all their company (which is mainly made of developers).
Let me tell you that it really hurts to close a startup and to give up all your work not because it failed but just because someone compels you to do so. Not because I was getting some big money from it (actually I still had to break even) but just because I did it for passion. I share the fault because I didn't ask to make everything clear before coming here, but given the premises everything seemed ok to me and I really wanted to leave my country so I overlooked this matter.
Actually I'm not in the position to challenge this decision and I can't just switch to another job, so for now I have to suck it and stop everything. As soon as I will be in a better position I will start looking for a job with better conditions for me (actually this is a very good job, but I really can't stand this stupid rule that controls what I can do with my spare time).
I just wanted to warn you. I hope that this will be useful for somebody.
120 comments
[ 18.7 ms ] story [ 424 ms ] threadI'd be very wary of a company that is that shortsighted.
That's dreadful. It's a shame you can't quit.
(Bootstrapping while contracting is best when you own the consultancy company.)
"Do you want to keep your startup after you join us?" "Yes, I'd really like to." "Ok."
Maybe I was too ingenuous and share part of the fault, I really don't know. There were no written rules anywhere, just this verbal agreement. The person was the same one that then told me I have to stop, the head of software development of the company.
Obviously it would have been better to get it in writing, but even then, it still could be ignored and it's not like it's worth fighting.
Can you not get another day job, which has nothing to do with software but is enough to pay the bills? That way you wouldn't have to worry about weird contracts and could work hard on your startup in your spare time?
Your current employer should be considered an enemy to your well-being and you need to find new employment post-haste.
No company will have regulations which are all-and-always perfect for every employee, and some managers will be stupider in applying rules than others - this is a good exercise in learning to stand up for yourself and getting what you want without quitting. If you're a good developer, they'll be willing to "bend a few rules" to keep you.
I concur with the top comment: run, don't walk, to the nearest exit.
So true. Cogs cannot rectify. Therefore, either give up hope or switch to a context where you are not a cog.
It's surprising how far people can string themselves along refusing to admit this (cf the fantasy literature about "organizational change"). I did it myself for a few years before snapping out of it.
Having said that, I wouldn't expend too much energy on trying to get them to change their minds...
Excellent point. I believe that no matter the outcome, going on the record in a "direct-but-professional" manner is good karma. Worse case: it removes any ambiguity about the reasons for your departure. Best case: it gives you the opportunity to talk some sense into one manager, potentially improving the lives of a whole team of developers.
It's also good negotiation practice.
They are paranoid you will steal from them the ideas you code on and compete.
They want to own your ass.
In either case, I don't like paranoid management, and I don't like people "owning my ass".
Now on the flip side I don't see why someone you TRUST can't own the company. You might program for it unofficially while working at your current company.
If it's as implied and they flat lied in the interview then change policy? Step 1 is ignore them, you're not doing anything illegal. Step 2 is find a new job immediately.
An alternative is to not give up your company and hope they fire you, and then sue for unfounded dismissal. This can be quite lucrative. I wouldn't want to wage a legal battle in a country I just arrived in, in a language I don't speak though.
If you speak Dutch there is a quite good forum that often has useful advise (in addition to consulting a lawyer, not instead of).
The union advise below is, as much as I dislike them, good - for little money they will help you out with this. A legal assistance insurance isn't going to cover this issue at this point, if you didn't have one before this whole thing started.
Also I'm really curious on what company this is, and what country you're from.
I don't speak Dutch yet, unfortunately, and even if I'm studying it, it will not become good enough in a short time. So I can't use the forum you wrote about.
Answering your last question: I'm Italian and I'm working for a big big social network here (you will surely know it). The workplace is quite good actually, except for this rule, that happens to be one of the most important things to me...
I was intrigued by the legal issues and after doing some research I am not so convinced any more as I was in my previous answer. You didn't provide the full text of your non-compete clause but most 'standard' ones are quite elaborate and do include broad exclusions on what is considered being in competition. Considering that your company can afford professional council I would expect your employment contract to be quite elaborate and tight. The case law also points to a fairly broad interpretation of non-compete clauses - i.e. the competition can be only slightly overlapping and that would still be covered by many non-compete clauses.
On top of that, now that I know who your employer is, I would argue that you are (with at least one of your products) in direct competition with them and/or several of their strategic partners. It still sucks for you that they promised you could continue work on it and now they won't let you but that does not have any legal standing any more.
Anyway good luck. One hint as to an option would be that your Ltd can have a trust for a director, and that the beneficiaries of UK trusts can be anonymous...
What is true is that an employer becomes copyright holder of any work done for that employer, as part of the employment contract. No further contractual agreement is necessary.
From iWoz:
<quote>
Before the partnership agreement was even inked, I realized something and told Steve. Because I worked at HP, I told him, everything I'd designed during the term of my employment contract belonged to HP.
Whether that upset Steve or not, I couldn't tell. But it didn't matter to me if he was upset about it. I believed it was my duty to tell HP about what I had designed while working for them.
[Later, after getting an order for one hundred Apple Is]
I decided I should run the whole thing by HP one more time. I spoke to Pete again. He told me to run it by legal. The legal department ran it by every single division of HP. That process took about two weeks. But HP still wasn't interested, and I received a note from HP's legal department saying they claimed no right to my design.
</quote>
Oh Merciful Book Industry, please do not smite me for reproducing a few paragraphs from a book.
<quote> The very first thought in my mind was, "I think I signed a document that everything I design belongs to Hewlett-Packard." Even just on my own time, I thought that they deserved it first. And I wanted Hewlett-Packard to build this. </quote>
Good call.
That's bullshit if they've told you that. Threaten to challenge them legally over that (a simile might be if you worked in a garage and your contract "stopped" you from fixing your neighbors car as a favor at the weekend).
If it is not explicitly in the contract it is not legal for them to say this to you.
It annoys me how software companies think they can get away with things like this.
I would go do whatever software you like (as long as it is not competing, obviously) and let them try to a) find out and b) stop you.
Maybe we should, as a collective, start a campaign to drive out the most over bearing clauses!
I received my contract...
Then you say
But when I got here I discovered that I'm not allowed...
Did you sign the contract? What did you agree to in writing? Do they have other constraints not specified in the contract? If so, are you legally required to be subject to those constraints? You may have rights you are not currently aware of.
Sounds like you're beyond the point of soliciting personal and business advice and now your should seek legal advice.
Find a competent attorney and have him review your contract. Have him help you understand your options. This probably should have been your first step. But it's still not too late to do this. Do it now.
Understanding what your alternatives really are is the first step in a proper plan of action.
>I received my contract...
>Then you say
>But when I got here I discovered that I'm not allowed...
On my contract there is only the non competing clause. What I mean when I say "I discovered" is that they told me so by email after coming here. It is not something written on the contract.
Asking a lawyer is exactly what I want to do now. The non competing clause in my contract is very short and in my opinion it does not enforce what they are trying to compel me to do (I don't have it with me now, but I read it several time to be sure). But that's only my opinion and I really need legal advice on this.
That being said, at least in the US, employment is at-will, and companies can fire you for pretty much any reason. Arguably, a side business is a large distraction. For example, what happens if someone needs support during business hours?
Given the kind of apps I develop (as of now) it nearly impossible that someone will need urgent support.
This is not the case in the Netherlands (where the OP is). Employees are fairly well protected here, apart from the first month or months. That's the "probation period" (proeftijd) when an employer can fire you for any reason. It is also likely that initially you are employed for one year, which means that the company is free to fire you after that year (it's not technically firing of course, just a contract that ends). After that, people usually get a permanent contract and firing gets more difficult.
If that is all there is then they don't have much legal grounds to limit you like this.
It depends on how they define competing though as to whether this affects your startup or not - if your doing iPhone work for them it may count (that's probably why it's worth talking to a lawyer to find out).
Anything else (non-competing work, outside consultancy and open source code) is irrelevant - unless it comes under employment laws for the country (highly unlikely).
Please do ask legal advice. There are lots of low-cost options for an initial opinion. Google "arbeidsrecht" and you'll find a few lawyers offering a first consult for free (check the google-ads as well).
Legal disputes only work well when they are between equal parties. This employer/employee relationship is far from equal.
I am suggesting legal advice.
None of us should ever sign any contract or make any legal assumption without proper advice from an expert in this area. OP is probably no more aware of his rights and options than your customers understand how refactoring your code will affect their business.
OP acted without legal support. But it may not be too late to fix it. He needs to find that out. That is all.
(Being paranoid doesn't mean they're not out to get you, etc.)
In many cases when an employer wants to get rid of an employee for a reason that isn't covered by the employment contract he has to request permission from a local judge (small claims court equivalent)... and even then the judge can determine an outrageous "termination fee".
So although the rules like these look draconian, they're sort of needed to keep the power between employer and employee in balance.
You've wisely chosen to not ruffle any more feathers there. Just behave and get out when you can.
I understand non-compete clauses, but this doesn't seem to apply here.
In the German system the oral addition stands above the written contract. The written contract is considered boiler-plate by the courts and the oral addition is more specific, and bears more weight.
Of course all parties have to agree to amend a contract. So just the employer changing their mind wouldn't cut it.
The Netherlands is a civil law country, so the German standard might be closer to what they have than the common law American standard.
Labour relations and law are of course a strange thing in themselves.
In Canada this practice is not legally supported, but still relatively common.
Maybe I'm paranoid, but just to cover my ass, these days any time I agree to anything with just about anyone, I insist on adding an explicit clause that makes it clear that I am free to work on any other project with no restrictions (I specifically retain the right to compete), and that except for the works specifically covered by the contract, the other party has no claim or license to any intellectual property that I own or create.
Then again, that's par for the course when it comes to work-for-hire, it's been a long time since I've signed an employment contract as an employee, and I doubt those additions would fly as easily in that circumstance...still always worth a shot, though, companies will often agree to change details of contracts for you as long as they don't feel they're getting screwed by the changes.
Most contracts refer to (in the UK) the patent act of 1974 and specifically claims by an employer against work are restricted to that which they ask you to do, that which they support you in doing (financially, or with time benefits). Anything outside of those fall within your own remit and providing it's happening without their asking you to do it, and without them paying you or giving you time to do it... then anything you do is outside of work in your own time and whatever your employer says has no bearing on this.
Basically, they can control what you do at work and on their behalf... beyond that, they have zero say.
If you want to stay where you are, engage a lawyer to have this conversation with them. I pretty much had to do the same with my last employer just to make it explicit that what I created in my own time was nothing to do with them and they have no say over.
Most people face these sorts of big, tough choices in life. Many let the situation make the choice for them. Those people are generally not entrepreneurs. Make a conscious decision. Make it and mean it.
However, given that your startup revolves around iPhone development, as does your current position, it's likely they're concerned that you will get burnt out on it... I'm not defending their position, just stating a possibility.
This is normally how contracts work. I'm not sure where you got screwed.
Doesn't contracts matter any more? That is an usual non-competing clause and i guess that you don't develop apps that compete with what you build in your day job...
Quite sad, wish you the best...
In my opinion, the work that most companies offer are challenges, but not very interesting ones and the no-outside-work clause would prevent me from taking on a spur-of-the-moment challenge outside my particular development area that might actually lead to some self-improvement.
This sort of thing is why I got a chuckle out of the claim that there would be "enough interesting challenges in [OP's] job." No employer can offer me enough interesting work that I won't find something unrelated I'd like to play with in my spare time, and I'm probably not alone in that.
I've recently started a company out of a hobby project while working for my day-to-day employer and they've never raised an eyebrow about any of it - it's one of the things I value most about my current job. DeusExMachina, your story is a real reminder of how important this has become to me - thanks for sharing.