Hey everyone, author here :) I'm sure most of you have more experience with contracts, so I'd like to hear your thoughts on stuff we, developers, shouldn't sign.
Very useful article. Thank you for putting it together. On one hand, you should read an employment contract or options agreement down to the letter, as you highlight. However, in my experience, most contracts have these provisions, at least in the US. Also, companies are going to be reluctant to deviate from a form template as this creates a legal mess down the road. My point being, you'll find it hard to "never sign" if every employer does this.
Hi Vadim, it’s so great you’ve written this and are trying to help others! It might be worth pointing out that in some places (Australia, I think California? And probably the European Union) the non-compete clauses can’t be enforced because companies aren’t allowed to stop you from making a living. Anti-poaching of employees sure but not anti-compete. So maybe people could do a quick google for their country or state to see if it’s even something to worry about (so they don’t reject a job for something that in practice isn’t relevant). Also, I’ve noticed that the NDA components are usually very reasonable as they mostly cover “material non-public information” (or something like that) so usually it’s not an issue, but good to check for sure.
Its only a problem with certain large chains, but they are often set up so that they automatically charge you every month and it is very hard to cancel. If a gym doesn't accept cash and demands you pay by credit card, that's a huge red flag. Also check reviews of the gym before you sign up. And of course, actually read the contract before signing. They can waive certain clauses if you confront them. And if they don't, there are plenty of small gyms to chose from.
A mate of mine was paying, say, $50/month for his gym, and had been doing so for a few years.
When he cancelled he was informed he’d actually been on a reduced rate based on an expected 10 year subscription, and as he hadn’t stayed 10 years, the price had actually been $60/month, so he now to pay a one-time fee of $10/month for every month he’d been with them, in order to be able to cancel.
Or, if he couldn’t afford that or didn’t want to pay, of course he could withdraw his cancellation and keep on paying his $50/month fee.
I thought "gym contract" in the article was an euphemism for specific types of employment contracts and was confused when nowhere else in the article mentioned anything about gyms.
Depends on the type of gym. The cheap ones only can pay the bills if most people are paying but not actually going. So they have to make it hard to end the contract.
There are a few gyms that don't, but these tend to be based on personal training or snall group classes. That personal attention means they are more likely to end your contract for you if you are not attending as they need a good reputation to justify the high price they have to charge everyone.
If you know what your are doing in the gym you don't need the services of the more expensive ones, so canceling will be hard.
Also, at least in many areas in the U.S., gyms - or more likely gym chains - are among the fastest to resort to debt/collection agencies....which in the U.S. tend to act very predatory. I don't blame orgs for resorting to collection agencies for legitimate folks who want to get out of paying, but i know far too many people who have been "accidentally" put in the sights of these collection agencies, and have had their credit negatively impacted. It sucks that businesses have such power over citizens and their financial reputation - without as much recourse.
I wonder how often non-compete clause are actually enforced. If I don't tell my employer what my next employer is and don't update my linkedin profile, I don't really see how it would actually works in practice.
The only time I've been burned by my contract is from relocation expenses. I went to a company to take a job and not long into it a reorg moved me to a different team. I left the company and they demanded I pay back my relocation expenses. When I protested that they changed my role to something not what I was expecting, I was told that according to my contract it doesn't matter. The temporary housing I was put in was very expensive despite the fact I hated it. Luckily, my balance was paid as part of a signing bonus by my new company.
My lesson here was: Never take a relocation package that has the company sorting your housing and travel, just ask for a large signing bonus instead.
I got paid relocation once, and the contract said that if any employment changes were on their end, I wouldn't have to pay the costs back. (I think this is why there are clauses like "if we don't hear from you for 3 days, that counts as resigning" instead of "if we don't hear from you for 3 days, you're fired". BTW, never go on vacation in a no-cell-phone area over the transition date for a vacation tracking system migration.
Learned that one the hard way!)
Nobody should sign a contract where they can fire you and charge you relocation costs; that is not employment but a scam to prop up relocation companies!
If you quit, then it's 50/50 in my mind. My take is that I don't want to be liable anything for quitting; the signing bonus is literally a bonus for signing the contract, not an obligation to do a certain amount of work. Salary covers the work. But I'd probably take a signing bonus that requires some tenure to not have to pay it back. Spend the money after that period. (Relocation is different to me because the disruption in your life is what they're paying for. If you don't like the job, your life was still disrupted. You're not asking for them to unrelocate you.)
I assume that I understand your point and probably even agree with the sentiment, however the content itself appears to be saying, "Don't sign contracts", or, "Don't work for other people." Granted, that's from a mostly USA-based perspective.
I've agreed to some terms because I didn't actually care whether they were enforced, because I was pretty confident the company couldn't or at least wouldn't do anything about it, or because my life circumstances didn't supply the luxury of choice.
Understanding the potential consequences and "why those may be bad" is useful, and prodding companies/governments to move away from that stuff is awesome, but "don't do that" isn't necessarily an option in many (most) contexts.
> the best thing we as engineers can do is be aware of the types of contracts we're signing
I'd argue that the best thing we can do is to not just make generalizations about what is OK to sign or not. Confidentiality agreements and non-competes are fine if they are narrowly focused, fair, and your compensation is sufficient to make it worth the restrictions. Because that is what a contract really is - a balancing act between obligations and limitations put on yourself contrasted with benefits (money) given to you in exchange.
So an absurd non-compete is fine if they pay me a lot of money for it. An confidentiality clause is fine if they pay me a lot of money for it.
This becomes critical when looking at all the recent layoffs. Most severance packages are exactly this type of contract - confidentiality and other restrictions in exchange for your severance pay.
Should you sign? Maybe. Maybe the severance pay is worth it. Read the contract, understand it, and make a choice.
Normally I 100% agree and this is, to me, one of the most important things that separates comments that are constructive from ones that are unfocused and all over the map. A lot of my own comment history is me making that same criticism.
But in this case, I think they are identifying an implication of "not making generalities" which I find to be perfectly appropriate. It reminds me of the robolending scandal, and how companies involved tried to deflect systematic criticism by suggesting each instance of robolending needed to be reviewed on a case by case basis without drawing why systematic conclusions.
It's meant as a criticism of how "don't make generalizations" can be used to deflect important and appropriate criticism, and I don't think it's just a case of someone changing the subject randomly.
Such a point could be made directly and respectfully, and without the sneering sarcasm. Engaging with such content rather than rejecting that behavior out of hand rewards it and demonstrates both to the poster and to any onlookers that lowering the level of discussion is welcome here.
Asking people not to misread a comment is an exhortation to improve quality of discussion. Endorsing a misreading because you dislike the comment being misread does not improve quality of discussion. You're equivocating between (1) misinterpret and (2) "reject out of hand" in order to make that endorsement work.
You can object to style without having to signal to the community that misinterpreting comments is an accepted practice.
It is not a misread to point out that the comment was loaded with sarcasm and would have been better without it, neither is it one to point out that engaging with that content causes its proliferation.
It is a misread to equivocate between stylistic objections and a criticism that was not about stylistic objections and suggest that both were expressing the same idea.
Endorsing the misread as the cost of doing business in order to reject a comment over stylistic objections signals that misreading is to be embraced as a community value.
Which I didn't do? Nobody misread anything. The comment is objectively nasty and sarcastic, against the rules of the site, and I asked you to consider that substantive comments are best addressed to other substantive comments.
I get that you don't like sarcasm (disagree, but to each his own), but how is the comment that I replied to more "respectful"? They dismissed out of hand the entire intellectual exercise of the original post because it doesn't jibe with their ideal of perfectly informed employees making optimal contracts with their employers.
I found their tone quite sneering and flippant, and so I parodied it (pretty mildly, I might add, the implications are right there in the comment I replied to).
OK, but that's REALLY hard to assess for a normal person on their own.
Moreover, it doesn't prevent unreasonable entities from having their retained lawyers draft scary letters. Most people just sign the boilerplate, hope for the best, and try not to poke sticks into wasp nests if they can avoid it.
But at software engineer salaries, it's not that expensive to get legal advice for this. I did it once, when a company I'd worked at for over a decade was bought out, and insisted everyone sign onerous contracts including broad IP assignment. I read the contracts carefully, marked them up with specific questions, and spent $300 on a half-hour consult with a lawyer, who said it was pretty much all enforceable in my state. (So I left the company, which worked out fine.)
One question/comment here, I don't think they can force you to sign a new one in most states without giving you something in return. I know someone who refused to sign a new contract because they didn't give him anything in return, and there was nothing they could do about it, or at least there was nothing they did do about it.
Hah interesting. My lawyer didn't mention that so maybe my state was an exception. Or, our employers can fire us anytime for any reason so maybe he figured it would be impractical to litigate.
It's even more dishonorable for a company with a legal team to offer up terms in a contract that are explicitly illegal, and then use those illegal terms to conduct unfair and deceptive business practices in the labor market.
In fact, that scenario is so dishonorable that in some states you can ask the court for triple damages if the employer tries to enforce the noncompete
For anyone in the US who needs regular healthcare beyond what's provided by Medicaid, the labor market is a war for (literal) survival. If the ownership class didn't want to return to an extremely adversarial relationship with labor, then they shouldn't have gutted the social safety net.
And no, I'm not going to show my hand in an imperfect information game... it would be stupid and dishonorable to my family to present with anything other than bourgeoisie professional-managerial class sensibilities.
That's like saying, "it's dishonorable to agree to a contract to kill someone knowing full well such a contract isn't enforceable."
If one party holds all the cards in a contract negotiation it's never truly being negotiated in good faith in the first place. Furthermore, one could argue that without having an expert on contract law right then and there available to answer any questions about any given contract means it falls under a "lack of capacity" for basically anyone who isn't a lawyer.
Employee agreements often fail in courts because of:
- Duress
- Lack of capacity (e.g. due to overly complicated legalese *specifically written to be hard to understand*)
- Undue influence (e.g. company says they'll hire someone else if you ask to get the contract reviewed by a lawyer before signing)
- Misrepresentation (e.g. job was described as "X" but turns out it's "Y")
- Non-disclosure (e.g. candidate was not told job would require purchasing products or services sold by the company itself or a partner)
- Unconscionability (e.g. some term or terms in the contract are so unfair that it cannot be allowed to stand... Like a non-compete that says you can't work within 50 miles of your former place of employment if you leave)
The "usual one" is unconscionability: Employers have unfair bargaining power almost all of the time and judges and juries are easy to convince of this. Also, these sorts of things don't usually make it to court unless there's something ridiculous in the contract. What's interesting is there usually is something ridiculous in every employee contract. It's just that those ridiculous things aren't usually the part of the contract a company is trying to enforce so they don't come up as often.
Dishonorable? I don't think so. They're the ones trying to trick employees into immoral and illegal obligations. They only have themselves to blame if it blows up in their faces. They played the game and they lost.
If an agreement is unenforceable, it's almost certainly abusive and exploitative in nature. I mean, it actually got to the point that the agreement was overridden by law. Doesn't even make sense to talk about honor in the same context. Would honorable people propose such an agreement?
They're likely banking on that sense of honor to make you hold yourself to obligations they can't legally hold you to.
I agree. My contract says that my employer can choose to enforce a non-compete for 12 months after I leave, but if they do, they have to pay me during that time. It creates a strong incentive for them to not abuse the non-compete.
A garden leave clause is literally required for any noncompete contract to be enforceable in MA [1]. Hilariously, none of the FAANG companies include a garden leave clause for MA employees. NB: giving post facto garden leave isn't enough to enforce a non-compete; an actual clause needs to be in the signed noncompete contract in order for the contract to be enforceable.
My employment lawyer friend is fairly certain that if a FAANG tried to enforce a noncompete without a garden leave clause, they could be sued for triple damages, where the damages would certainly include the minimum required garden leave, and that if the enforcement attempt resulted in a job opportunity being aborted you could probably also include the full vesting schedule of your next employment contract in the damages (which, again, gets tripled).
[1] M.G.L Chapter 149 Section 24L:
(b) To be valid and enforceable, a noncompetition agreement must meet the minimum requirements of paragraphs (i) through (viii)...
(vii) The noncompetition agreement shall be supported by a garden leave clause or other mutually-agreed upon consideration between the employer and the employee, provided that such consideration is specified in the noncompetition agreement. To constitute a garden leave clause within the meaning of this section, the agreement must (i) provide for the payment, consistent with the requirements for the payment of wages under section 148 of chapter 149 of the general laws, on a pro-rata basis during the entirety of the restricted period, of at least 50 percent of the employee's highest annualized base salary paid by the employer within the 2 years preceding the employee's termination; and (ii) except in the event of a breach by the employee, not permit an employer to unilaterally discontinue or otherwise fail or refuse to make the payments; provided, however, if the restricted period has been increased beyond 12 months as a result of the employee's breach of a fiduciary duty to the employer or the employee has unlawfully taken, physically or electronically, property belonging to the employer, the employer shall not be required to provide payments to the employee during the extension of the restricted period.
In Germany (and probably much of the EU) that incentive is built into the law, as it should be.
I think it’s boilerplate in big company contracts there, but extremely rarely enforced, because IIRC the amount you have to pay is the comp for the job you’re blocking.
When I had a contract like that, I occasionally fantasized about getting a FAANG job and being paid in full to not take it, but in reality that would never happen unless you got caught in a spat between rival executives.
In France a non-compete clause is only valid if it is bounded in time, geographically, for a specific type of job and with financial compensation while it is enforced (not necessarily full pay but has to be proportionate to the constraint).
As an engineer, I have seen a lot of contracts with bogus non-compete clauses and never seen one that would hold in court. So the employees are technically protected but still subject to psychological warfare (threats when you plan to ignore an illegal clause).
> non-competes are fine if they are narrowly focused, fair, and your compensation is sufficient to make it worth the restrictions
Yes! This is a particularly true for most software engineers. I have a friend who is a doctor whose contract says that if quits, he can't practice medicine within a 30-mile radius for 12 months. His only option would be to move to a different area, take a job with a horrible commute for a year or to wait it out. On the other hand, as a software engineer, I've never been in a situation where my thought is to move to a direct competitor. My skillset is broadly applicable to many industries, and it wouldn't be strange to do one gig for Home Depot, the next one at Google, followed by a role at Tesla.
A lot of doctor and vet contracts are like that because they are likely to get a large local client following just by joining a practise that the practise has spent years cultivating.
There's an easy way to solve this problem without non-competes: Treat your employees better. Usually by paying them more.
The entire concept of going to work for someone else is that it's supposed to save you a lot of trouble having to sell your services on your own/run your own business. If it has become so much more profitable for doctors to leave and start their own practice then they should be doing that because you're not paying them enough! You're not "making good" on your end of the bargain that we offer in civilized society.
Sure, and if a doctor is good enough, he can just start his own practice from the start and never have to sign anything since he never join any practice except his own.
That line of reasoning goes both way. If you sign something, then it was worth it for you.
>if a doctor is good enough, he can just start his own practice
It depends. Many instruments, such as PET in nuclear medicine, cost a lot. One have to work for hospitals/networks to help his/her patients with that instruments, no matter how good he/her is.
This perspective completely evades the actual argument which was that practices behave this way because they're extending access to their client base which is a resource they cultivated themselves and which will almost certainly yield a following the the new applicant.
A client base is not an exclusive resource that only the employer gets to have. If the doctor started a coffee shop and those same clients started going there for their coffee would it be the same? Or perhaps the whole point of such clauses is the very definition of anti-competitive behavior.
Also, if the doctor's patients all like him enough to switch to his private practice when he leaves then clearly they weren't paying the doctor enough. He was worth that many patients!
They could pay doc more if they didn't spend any money on marketing and retention but that would be a lose lose situation, especially as most docs bill money on a per visit basis.
Complete bullshit. The patients are not "theirs", they are not resources to be traded. The doctor is the one extending services to the practice. They're the ones who benefit from having high quality professionals attending to patients. The practice did not cultivate anything, the doctors practicing there did. Doctor-patient relationships are personal and it is 100% unethical to interfere in them with anticompetitive contracts.
> it's supposed to save you a lot of trouble having to sell your services on your own/run your own business
Can't stress this enough. Show up, attend to patients as scheduled then go home and enjoy life. All the boring details are taken care of. It's definitely more profitable to start one's own practice but the comfort of working at such places should not be underestimated.
Not always, a vet practise can have 1-5 million in fixed capital costs. Surgery, dental, x ray, blood and so on all add up. Sharing admin and vet techs helps too.
Yeah, it's generally called good will. Client list, client interaction, services, and payments history, website, company name. The ability to figure out the best clients and continue the relationship with them.
I know a PT who signed on of those. Then left, worked outside the agreed radius (but still in the same metro area) , and was still sued. He eventually settled.
I imagine the lawyers came up with some bull like "well actually we meant that the 30-mile radius of your new clinic can't overlap with the 30-mile radius of ours"?
Luckily Google does not, to my knowledge, try to have non-competes in their contracts, and they would not be enforceable in California, otherwise the problem with companies their size would be that they "compete" in an awfully large number of business areas.
Going from Google to Tesla? Sorry, they're a competitor in driving cars. Spotify? They compete in streaming music. Microsoft? They compete in search. Apple? They compete in cellphones. Telegram Inc? Google does instant messaging. Garmin? Google does maps. NCR? Every heard of Google Wallet?
Serious question: is it even possible to get a well-paying dev position that doesn't have one or more of the clauses listed in the article?
Another consideration is whether the contract can be enforced and your legal recourse if the counter-party attempts to enforce an invalid contract clause. This is particularly true for noncompetes.
A better piece of advice than "never sign" is to simply find an employment lawyer and discuss the ramifications of the contract prior to signing.
I have successfully negotiated my way out of non-competes and other onerous employment contract terms. Only at small- or medium-sized startups, though, not big tech. In general the bigger the company, the less willing legal is to play ball. I suspect going for rather senior roles helps, too.
Non-competes are dog-eat-dog "fuck you" territory for me. I don't even bother negotiating. I happily sign non-competes, but will never sign a non-compete that's actually enforceable. If their lawyers want to lie to me about what's legal in my state, I'm happy to let them engage in unfair and deceptive behavior right up until there are actual damages.
More importantly, I would also happily fight them in court if it came to that (and retire on the triple damages).
I'm thinking of some of the other clauses:
1. "one-sided termination clause": Every contract in an at-will jurisdictions without a guaranteed exit bonus contains, implicitly or otherwise, a "one-sided termination clause". I have never seen a contract for "normal working stiffs" that contains an exit bonus, and I've only ever worked in at-will jurisdictions.
I disagree. My employment attorney recently reviewed a "non compete non solicitation" doc for an engagement and said, "it's copied from LegalZoom and is so badly written it will be unenforcible in the jurisdiction and here is why." They earned their $300 for reviewing my employment docs (for reasons beyond this specific issue). When in doubt, seek counsel and follow their guidance.
How would you even function in the US? Just one time to get an apartment they had me sign an agreement stating I was not in the military, had never been in the military & would not join so long as I lived there. Keep in mind, I was subject to conscription at the time.
The whole thing is laughably unenforceable as well. They're trying to end run around federal law protecting members of the uniformed services. You can write any contract you want & have anyone you want sign it about. Doesn't mean anything, at all.
Also I'm pretty sure if I got called up to go to war, there is going to be someone in the DoD who can give me a little legal help in explaining to the landlord how hard they need to pound sand.
You're talking about "severability" in US contract law. The rest of the contract was either stupid (regulating my usage of the non-existent golf course) or just garden variety stuff (can't sublet, etc.).
The same company also just dropped off an "updated" contract a few months later and told me that I had to review it and sign it or move out by the end of the month. I obviously just ignored this.
Right, but in an employment contract you want that severability. If the company tries to enforce the non compete clause and it’s invalid, you don’t want that to invalidate their obligations with respect to your pension.
My experience with companies pulling DIY contract addendums out of their ass is that they forget severability clauses. Or that the contract starts falling apart because they have other sections which refer to the severed part which means those sections also fall apart. For example, a damages section that ends up exceeding state law.
DIY contracts are the best to sign because they are such a mess.
I’m a lawyer and a few years ago negotiated a “we own everything you make” clause in an agreement for a batch of engineers who were being hired at the same time. We couldn’t get the clause changed - as others have said, BigLaw drafted it, the employer didn’t want to change it - but we did get an email after back and forth that said they had no intention of enforcing that clause for stuff you make outside of work. So I sent that email to the engineers and they can hold onto it in case there’s an issue in the future.
Reasonable companies don’t want to get a reputation for litigating employment clauses like this. Sure, there are outliers, but nobody wants to be on the front page of HN for suing an engineer over a side hustle. Especially not in this labor market!
Side note: it was delightful to me that the engineers carefully read the agreement and one of them consulted their own lawyer. Most people don’t do that.
Are you a lawyer? Or do you have a lawyer review every contract you sign? Just curious how you are so confident a particular contract, or clause within, is unenforceable. Not saying you're wrong, but how do you know?
I didn't sign a work contract because it was written in English and there was no translation available, especially since it contained a non-standard clause related to intellectual property rights. All communication before signing the contract had been in my native language.
This is silly. It would be useful if it said something like “here are clauses that you should understand the implications of very clearly” but that’s about it.
Work for hire clauses are totally normal for certain kinds of work and no sane company is going to want you contributing some relatively inconsequential portion of a creative project unless the contract makes it clear you won’t claim to own it all later.
Same goes for the idea of never signing an exclusive distribution agreement. You would tell someone not to have their book published by a major publisher?
The rest mostly have nuance too. The various forms of non compete and NDA agreements are clearly unethical for entry level workers and would be essential for any high level CEO gig, or principals in a corporate acquisition
Also big companies are conservative, and they don’t care about your demands. If you don’t have a track record and want to do business with big companies you might have to sign some crazy stuff. Your other option is to not get enterprise business, and for the most part it doesn’t really matter it’s fine to sign some stuff and get paid.
I mean in principle, I agree with all of these points. But in reality if you stick to these rules hard and fast, you'll basically never accept a job offer. That's clearly an exaggeration, but many-to-most of these clauses are in every boilerplate contract.
Whether it's a small startup that's using a generic contract they've gotten from the internet or their lawyers, up to massive corporations, they're all going to include semblances of some of these points. Probably for different reasons, but the points will still be in there. Startups and small companies might be more flexible to work with you on changing parts, but still the legal headache of changing anything is often far greater for the company than just passing on you and looking for another candidate. Infinity moreso for big companies.
My experience is biased towards technical roles (like most on HN), but I've worked for startups, big companies, and as a freelance contractor. It's the same stuff in most contracts. Obviously my experience is not indicative of 100% of companies and I'm sure I'll have people chime in saying they had success getting company X to change some of their contract, but it's overwhelmingly not going to happen. So to treat these points as 'rules' instead of 'points to be aware of' is a bit too hardline of a stance to take in my opinion.
I've had a "we own everything you make" clause in contracts before, it's just copy pasted boilerplate, and they were fine with removing it when I asked.
Noncompetes I've been fine with, because they were always quite niche companies, and the wording was something along the lines of "don't join our direct competitors for a few years", and that seems ok to me. I will grant that it gets more complicated with megacorporations that work on everything though, as their "competitors" are roughly everyone.
A number of years back, our company was acquired and they sent us employment contracts from our new owners, with that same "sign it or GTFO" message. Many people signed. A few of us just didn't. Nastygrams kept on coming, we kept on ignoring them. Ultimately, we never did end up signing.
Which is the other piece of the puzzle - lawyers are really good at knowing when they actually have power and when they do not. Unfortunately, when they don't truly have legal power they resort to bullying. So if you are being bullied to sign a contract, that usually is a red flag to stop, really look at things, and figure out why they are using that tactic. You may be in a better situation than you think.
I think you might be a bit presumptuous. Why do you believe they don't have legal power? If you are an at-will employee, you can typically be fired for any reason. Not signing the updated employment agreement is, unfortunately, a valid reason.
In your case, they did not exercise that right. But I've been at places where they did. For something as petty as not signing an agreement which appeared to eliminate some employee benefits that were contractually obligated. Could the fired employees have sued, and won? Perhaps. But it would be an expensive, risky, time-consuming proposition to find out.
> many-to-most of these clauses are in every boilerplate contract
Contracts are entirely negotiable. If there's a job you want, but the contract contains an objectionable clause, tell them that you're willing to accept if they strike that clause. If you're at the point in the hiring process where they're showing you the contract, that means that they've sunk resources into you that they don't want to throw away. And the fact that these clauses are boilerplate, as you say, works in your favor, because nobody involved in the hiring process consciously chose to put that clause in and they probably don't really give a damn.
> because nobody involved in the hiring process consciously chose to put that clause in and they probably don't really give a damn.
Yes but I think I didn't convey my point enough. Nobody involved in the hiring process cares, and if it's a good company they probably agree with you. But this standard contract is what they paid attorneys good money to comb over with a fine tooth comb for liability, and eventually sign off on.
Very very very few companies are going to go pay Expensive Law Co. (TM) $500 per hour to review changes to the contract just because _one_ potential hire who still might not even accept the offer says they won't accept if that's in it. It's way out of most recruiters or engineering managers that you might be interfacing with to make that happen, not to mention making their life way harder. Heck even a startup CTO might balk at having to go spend more on legal.
I have had clauses similar to the "we own everything you do 24/day" one and I've pushed back on all of them. Every time, the response is "yes we totally understand but we have no power to change the wording in this contract we use for every single employee" and it just comes down to a gut judgement call on my part on if I feel they will actually screw me over on that point.
Again to emphasise, I totally agree logically with author's and your points. But it's simply not realistic to approach job hunting that black and white unless you're comfortable being out of work for months until you find the perfectly-flexible-enough company.
Nobody is going over a contract with legsl just because they removed the ‘we own everything you make’ clause. That’s an irrelevant part of the contract.
My experience in the USA is that they will flatly refuse to change anything in the contract, and will tell you to take it as-is or walk away, in part because they feel like they can't make changes without getting it re-approved by legal first.
I've had the opposite experience. There was always a bit of hand-wringing about "oh, but this is the contract approved by our legal consultants...", but pointing out the fact that A) this clause is flatly impossible to enforce in my jurisdiction and B) it would be immensely silly to blow up this entire hiring process over a contract clause that, best case scenario, would involve them having to sue me and lose to enforce has always made the hiring manager sign off on the reasonable modifications.
Of course, if the clauses are enforceable in your state, it might be a different matter, but that's also an opportunity to make demands. "Sure we agreed to $XXX,XXX , but there was no mention of a noncompete. That's going to need $XXX,XXX+$YY,YYY or $Z weeks of vacation". Make the numbers bigger than you think is reasonable, and they'll probably cave on the contract clause. Or they'll compensate you for it. Win/Win.
At big companies they will not change the contract for a single candidate. No way. Not unless it's a "big deal" sort of job where the executives are involved. They'll just tell you to go pound sand.
The correct course of action is to cross out the clause, put your initials next to it, then sign the document. It is the responsibility of the company to have someone review contracts for such things but they never do; they just collect all the documents, check they're signed, and file them away to be forgotten about forever (or until a lawsuit requires they be retrieved).
I've done this at several employers! I even tell the HR people what I'm doing so they can't claim they're being misled. Not once have they ever understood what I was even talking about or even cared. It's because they're HR people; not lawyers. They just "follow the script" as it were.
One woman at HR said that what I did--crossing out the "we own everything you make while you work here plus a year afterwards" clause--was a "very good idea" and just took my documents and filed them away like anyone else's. I even offered alternative language that would be fair along the lines of, "we own everything you make using company resources in your official line of work" but she wasn't interested.
A lot of HN folks make stuff and these invention clauses are completely ridiculous. If you invent a new kind of apple peeler in your garage on a weekend using your own tools it is absolutely unconscionable that your employer who pays you to do programming or management work could claim ownership of that thing. Even if the contract says as such I seriously doubt any court would enforce that unless you worked at a manufacturer of apple peelers.
This. You always have the power to change the proposed contract to suit your needs, and let them balk if they don't like it. This assumes it's a contract you can actually edit (whether on the computer or mark up with pen); for non-editable things (e.g. DocuSign contracts), I'm not sure what you'd do if you can't print it out pre-signing.
For the latter, I've sent them a "diff" over email containing the changes I required before signing. They didn't accept any changes to the document itself, but they did let me create a separate document with clarifying language.
They’ll tell you that this is unchangeable, it’s the default, etc the first few times, but if you persist, they’ll usually just strike out a clause like this if they actually want to come to an agreement. They may not even bother telling legal (depends on company size).
Really it depends whether you’re negotiating from a position of strength and and can walk away, if you are changes like this become possible, if you are not changes are more difficult.
I've never had any HR person give up even a comma in a contract like this, even after a full week of back-and-forth negotiating and trying to get them to strike out an individual sentence or change a word. Their attitude is that even if they lose their first choice hire over it, they always have a pipeline, and they'd rather adhere strictly to legal protocol and go with their second-choice hire.
> Very very very few companies are going to go pay Expensive Law Co. (TM) $500 per hour to review changes to the contrac
If they are already hiring "Expensive Law Co." then most likely they have them contracted anyway. Even with big corporations, there was never an issue with this. They were always happy to send my changes to their legal team for review and also allowed me as much time as I needed to review and consult my own legal team (if I had one).
It is in their and my interest that the contract describes the relationship in a way we both want and it is fair for both sides.
> "yes we totally understand but we have no power to change the wording in this contract we use for every single employee"
Had that too. Just be persistent and firm. "I can't sign the contract with these clauses in." 100% of the time they would eventually change their mind.
It may be bad for them that the clauses will be gone, and they need to show their employer they put up a fight and also it would be much worse to lose resource that otherwise was ticking all the boxes.
The issue is in smaller companies that don't have standing contracts with Expensive Law Co, and can't afford to even pick up the phone to ask them a question unless they're in serious need.
In 20 years, I've never seen a company that was willing to negotiate over the employment contract of an employee. As a freelance consultant, I had free range to negotiate, but as an employee, the contract was always presented as "take it or leave."
That's probably because most people don't even think about it or bother trying. They may not even read the agreement!
I've successfully negotiated contracts several times in the past. Even once at a big company (that I knew was desperate :). As long as what you're asking for is reasonable they'll usually make the change unless it's a really big company. In that case they're not going to bother and just tell you to either sign it or go to work somewhere else. They know they have plenty of leverage and there's always someone else they can hire.
I've negotiated literally every employment contract I've ever signed. Hiring people is expensive, and by the time you've found someone you're willing to extend an offer to, there's a lot of sunk cost. That, my friend, is called "leverage".
I've done it a couple of times. Recently I started a new job where they had a "we own all of your IP you create at any time" clause, which is ridiculous. They agreed to change it to only include IP related to their normal business which I think is fairly reasonable.
They don't give a damn, but every time I've asked for changes to contracts, including positions I was actively recruited for by the hiring manager, once even by the owner of the company, I'm told to sign it or no job. In the case of the owner asking me to apply, they literally said "My lawyer says to leave it in, you're not a lawyer, it's staying in."
I'm sure some people have negotiated these things but I've tried multiple times - to shorten noncompete lengths, to remove the "anything you do on our machine is ours for all time" stuff, etc - but never had any success.
"My lawyer says to leave it in, you're not a lawyer, it's staying in."
The response there is "Well you aren't a lawyer either, and mine said it needs to go".
As others here have said, crazy clauses can go. One key point, make it clear it is about unduly restricting right to income in the future, without wanting to screw over anyone.
This is why a second response, such as "Well, if you triple the salary ... maybe" makes a point here.
Some contracts literally make it impossible for you to work in the future, in your field. That means 'gimme retirement salary on exit' minimum.
(Such broad clauses are rarely enforceable, you can't prevent a person from working at all, but... )
They will 100% let you walk over this. And then what? Your next offer will be the same, and so on. Market forces don't work if every agent on one side of the market does exactly the same thing.
> But in reality if you stick to these rules hard and fast, you'll basically never accept a job offer. That's clearly an exaggeration, but many-to-most of these clauses are in every boilerplate contract.
In the tech industry, yeah, but there are industries that aren't so employee hostile where you can find better contract terms. I'd have to say in my experience, the tech industry is one of the worst when it comes to the malicious application of employment contracts. Apple is especially egregious with forcing interviewees to sign expansive NDAs; the Dilbert cartoon is spot on by making them dress like Apple store employees.
Totally correct - I tried to caveat that in my post by saying I'm skewed hard tech industry. That was the main attention of the article, and my main experience, so I was writing from that viewpoint.
I somehow doubt that Vail Resorts has a non-compete for their lift operators to go work on another mountain (although now that I think about it VR is pretty terrible so this might have been a bad example)
The funny NDA's are the ones where they think they have a 'secret sauce'. Then you get in there and find out they are using some off the shelf API's exactly as intended. You start asking exact questions and they do not understand how you know so much about their product already.
How is it that someone smart enough to be able to read the docs and connect up to the API can still be unable to realise that they are using something that others can also use?
I just think it is sort of funny. But connecting API's up is what many do. Reading the docs is something a lot of people skip, not hard just tedious. The NDA part is a funny twist where I can see an NDA around their business case and who they are working with. But the tech is rarely anything groundbreaking. Had one guy who only wanted to work with 'mozarts' no 'salieris'. That was some weapons grade hubris there. It was basically a in memory hash table he was building. Thought he had some sort of serious secret sauce with that 'idea'. When his real secret sauce was his client list and connections.
Also verify that anything you're signing when you leave matches what you signed when you were hired.
I recently left a company where, when I was hired, I had agreed in "Appendix C" not to recruit any of their employees away from them for a period of 12 months after separation. When I actually separated after more than two years, the "Appendix C" they wanted me to sign and presented as the one I had agreed to at hire now said 24 months. I told them I was happy to stand by my original agreement of 12 months, but I had no incentive to extend to 24 and would not be doing so. They sent me one with the right number and I signed.
Their story was that, in the two years since I'd signed, they changed Appendix C and had "accidentally" given me the one that pertained to people who had been hired after me under the revised terms. I'm willing to give them the benefit of the doubt, because why believe people are malicious when they could just as well be careless?
I'd tend to agree, but then again, there's so many people who are just bad at their job. Attention to detail is a skill which many do not care to sharpen.
I'm sure the person who actually sent me the form was some low-level functionary. All I did was say the equivalent of, "Hey, this isn't the right form," and he went back to his supervisors and got the right one.
I sincerely don't think there was malice involved, certainly not at his level, so I just treated it like that.
I can believe that they're careless and used the wrong copy of a document but I'm not sure I understand why you're signing an agreement like that on exit: you've signed it on hiring so that regardless of the outcome of your employment, you're bound to the anti-poach. The only reason I can think that they'd ask you to sign the agreement again on exit is that they wanted to bind you into something new -- what explanation did they give?
I would happily sign a 1 page document that said, "I acknowledge that I have been reminded of my obligations under the document signed April 1, 2004 and been provided with paper copies of said agreement."
Often a company will offer severance more generous than they are contractually/legally obliged to in exchange for the leaver signing some extra restrictions beyond what was in the original employment contract.
> The only reason I can think that they'd ask you to sign the agreement again on exit is that they wanted to bind you into something new
In the Clerky boilerplate employment docs, used by many YC companies, the employment agreement contains a Termination Certificate along with a clause that says something like “upon leaving the company you agree to sign the Termination Certificate in the appendix”.
So technically, in the case of Clerky’s boilerplate docs, you agree to sign the termination form before employment even begins.
FWIW the termination certificate I’m thinking of is a very simple 1 page agreement basically just acknowledging to the company that you have returned all company IP, hardware, etc to the company and agree to continue to abide by the original employment agreement. It doesn’t really add any additional obligations.
I suppose the benefit to the company is just a reconfirmation that you are aware of the terms of the original agreement and that you’ve followed through with basic duties such as returning confidential data, hardware, etc to the company.
That said, many employers have additional severance agreements that can add lots of additional expectations such as non-disparagement clauses, but that’s typically only done in exchange for additional severance the the company isn’t legally obligated to provide you (in which case you can absolutely say you won’t sign the agreement if you want to forgo the severance payment)
Yeah, this was the situation, that I had agreed when I was hired to sign the agreement when I left. The issue was just that the summary of what I "had agreed to" when I was hired that was presented in the termination agreement wasn't actually what I had agreed to when I was hired.
I was leaving of my own accord, so no severance involved, which was why I told them I was happy to stand by the terms I'd already agreed to, including signing the termination agreement, but I wouldn't be signing a document that contained new terms.
I agreed to when I was hired. It was a basic summary doc: I've returned everything that isn't mine. I haven't kept records of things I'm not allowed to keep. I'm not going to poach your customers or employees (for 12 months, which was the part they tried to change to 24).
Easiest way to do this is to not sign anything unless it involves extra pay. I’ve politely refused HR’s request to re-sign bunch of documents before when leaving - I didn’t feel like digging through them or paying a lawyer and they had zero leverage
I've never refused, but I do always outline the (usually low four figure) cost in time and legal expenses required to review the contract. I close by explaining that I cannot in good faith enter into an ostensibly binding contract without some form of consideration from my counter-party because such a contract would be difficult to enforce in any case.
HR never knows what to do and usually just never gets around to replying to the email.
I don't even politely reply. At my last job, HR sent me a "contract" offering $1 in exchange for agreeing not to work in the industry for 1 year. I archived their email and never spoke to them again :)
It would really depend on the job, of course. I didn't really care about that one, and didn't see myself ever wanting to work with that founder again, so I didn't make any effort to be "nice" in any way. If I ever left my current job, I would make sure to stay on the best of terms. I would be annoyed if they paid me $1 to not work for a year, but I also know they would never ask for that.
I had signed a contract at hire saying I would sign the separation agreement when I left.
I didn't have any issue with the agreement I had already made. I just wasn't willing to change it as I was voluntarily leaving and they weren't offering me anything to change the terms.
I'm not even 100% sure I would have noticed it except that my new employer required disclosure of any restrictions I had, so I disclosed the 12-month non-recruit from the previous company. It was fresh to mind.
The two companies are in the same general industry, but do not compete with each other.
Yeah...when I left a job in 2021, HR presented me with a bunch of new agreements that they wanted me to sign. I explained to them that it just didn't work that way.
> Also verify that anything you're signing when you leave matches what you signed when you were hired.b
Better, just don't sign anything when leaving without sufficient new consideration. If they really want to five you a reminder of what you signed when you joined, that’s what copiers are for.
> Anything you do with the company property, e.g., work computer, automatically belongs to the company, even if you do it on the weekends.
That doesn't sound unacceptable to me. It's not that I'm that strict about e.g. reading personal emails etc. on my work computer, but if it's some side hustle, be it for money or for fun, I think it's honest to take your personal machine for that.
If I write code using some company computer, then the most they could do is charge me for the damages, i.e. the power used or in the worst case I would have to replace the computer.
If you make that pen available to me under these conditions? Sure.
If you "just give" me something without any conditions then no, you could definitely not claim that story. But if you make that pen, your property, available to me explicitly only for work and nothing else?
It's your property, not mine. I only have whatever rights you grant me to it.
> If you make that pen available to me under these conditions? Sure.
Let's leave aside whether the law (in whatever country) permits such a one-sided contract, and ask - should it permit it? There are plenty of contract terms that are illegal (i.e. not backed by law), such as usury [1] or various anti-competitive practices, because their enforcement is seen as either unfair, or a detriment to society, regardless of whether they were entered freely. Contracts are not and should not be above the law.
> because their enforcement is seen as either unfair, or a detriment to society
I mean, I do agree with you in general, its just that I do not see this issue as a detriment to society. If someone demands massive interest rates on loans that you need to survive thats definitely unethical.
A company demanding that you do not use their laptop so that you can work on your side projects at home ... well, that doesn't quite sound as bad. There is nothing stopping you from just buying your own device.
Thats like saying "only use the company car for work stuff" ... it just doesn't seem that unfair or unethical to me to be honest.
Exactly this, and they are ubiquitous. With software I think it might be a slightly different matter as the company mighy have access to software you couldn't otherwise afford. But it's a red flag anyways ... why would you ever want to work for someone who'd want to claim ownership to something that is clearly not theirs?
Strangely it works this way though. It doesn’t make sense. In my current job I refused company equipment, and insisted on using my own. I pay for my own software too.
If you explicitly included a contract that stated how the pen was to be used and the ramifications before my acceptance of your pen then yes.
Companies do include policies about how their equipment is to be used and for what and they do include how they think about ownership usually in your employment agreement or principles of employment policies. To write those off because “hey it’s only a generic piece of equipment” is perilous.
I suspect how you think about the analogy changes if you write the story on company letterhead or if you used the company car for your catering side hustle on the weekends.
We have a policy that states, "company equipment can not be used for personal use". As without this company equipment can not be tax deductible. However, in the UK at least, it is a matter of economic policy whether a company makes any effort to in-force.
Thus I hit on what a I thought was a neat solution. Which was to deem it a sackable offence to expend any resource whatsoever including time or materials to identify if company property had been so used.
It's not that simple. The law recognizes that when signing a contract there is a power-imbalance between employer and employee. It would be different if the contract was written by the employee and signed by the employer.
That last paragraph of yours is key the your whole post. It’s a good illustration of how a large enough difference in degree becomes a difference in kind.
If you use the company car for a side hustle in catering, then that perhaps gives the company the right to fire you or charge you for damages. However, they do not get to claim any intellectual property (recipes you invented for your catering side-job).
I agree with that. In the pen example, they should bill you for the wear and tear on the pen (ball bearings and ink aren't free). In the computer example, same deal. Figure out what a flash memory erase cycle is worth, figure out what bringing the CPU out of its lowest power state costs per minute, figure out how many of each were used, and send an invoice!
I disagree. A vanilla MacBook might be a bit like a pen, but if that MacBook is loaded with a bunch of proprietary or licensed software, I can see why an organization wouldn’t want it being used for financial gain outside of the organization. Perhaps they don’t explicitly “lose” anything, but it’s their investment to have returns on.
If a laptop is like a pen, what about a high end graphics workstation? What about a small server? Internet bandwidth is a cheap commodity, can I run my site from work? Electricity is basically free (I charge my personal scooter at work), what about a small Bitcoin miner?
So you're the one who keeps taking the company's pens ...
More seriously though, there are frequently restictions of the use of office equipment (or business equipment in general). Businesses will often overlook it if it is not a problem, say if you need a photocopy of a rental contract. They have the discretion to say no if the privilege is being abused, say if you started printing hundreds of pages a month for personal use. The misuse of pens is rarely seen as an issue since they hold little intrinsic value and are routinely replaced.
Should they be able to claim the rights to something you produced with their equipment? In most cases, no. I'm not going to say in all cases no since there is always going to be someone who pushes the limits beyond reason. (Say a person develops a piece of software with a company computer to sell on the side. Can that be construed as the business indirectly financing the development of the software by providing hardware and/or software tools?)
In general, it is always a good idea to do personal stuff with personal equipment and business stuff with equipment supplied by the business. I'm sure the coworkers who are searching for the missing pens will thank you for doing so.
I think it's fine to require that you cannot use work equipment for personal projects, but claiming ownership of a project written on the weekend on a company laptop isn't the solution.
My employer's laptop, my current client's laptop (I'm in a consulting branch of a large corporation), and my personal laptop. Pre-Covid I lugged them on airplanes every week.
I enjoy HN for many reasons, one of which is to encounter approaches and perspectives that I would not ever even remotely consider. I would not use my employer's laptop for personal, let alone a side-gig purpose, with a 10 foot pole. It's not mine, I have no control of it, I have no visibility into what is being monitored nor how it is used, where the data goes, what I should install on it, etc. Employer has full legal right to request it back this evening, do whatever forensic examinations they want, and have interesting questions or claims on anything they find.
Yes laptop is a tool, but it's such a complex multipurpose massively powerful dangerous tool, that even if we try to make a claim "Pen and Laptop are legally the same as a employer-provided-tool", I find the surface area of a Pen minuscule compared to the surface area of a laptop and everything I can do with it / put on it.
Big +1 on that. I assume a model where my work laptop screen is being directly mirrored into a room with 100 people watching it 24x7, basically. Entirely impossible, but every organization has some level of monitoring between zero and my theoretical scenario, so I carry a personal device and completely sidestep the entire issue.
And I've setup everything from scratch. There is no software on there that I wouldn't install on my personal machine. If anyone wanted access to it they'd have to ask me for a password noone else knows.
Yes, it is perfectly reasonable and in many cases prudent to not use your companies laptop for home-use. So you may chose not to do it.
That the company would own everything you did on it is still completely unreasonable.
Not to negate your point, but a related pondering : I would assume that the Venn diagram of companies that make claim on property created on their laptops ; vs companies that let you install fresh OS and software from image and repository of your choice and access work network / store proprietary data ; is practically zero.
(If you did not install fresh OS from image of your choice, then you did not install software from scratch and should not be confident what's in your work laptop and what it's doing / monitoring)
It's not your equipment, you didn't buy it, you can't just do whatever you want with it. It's like being given a company car but going on a 3,000-mile roadtrip "because why should I have my own car if you gave me this one?"
It's not remotely unreasonable to expect someone not to use their employer's equipment to make money on the side, especially for something like a laptop which over the course of what a developer earns in 4-5 years is basically nothing.
> It is completely unreasonable as a blanket statement.
I personally find your position unreasonable: that you should be entitled to use property that is not yours how you see fit, because it’s more convenient to you.
In reality, any sane organization wouldn’t punish you for reading the news on your work computer, but to assert you should be given access seems unreasonable to me. You’re paid to do a job and they provide some tools for you to use to complete that job.
If your company ever ends up in legal hot water, you’ll be glad you kept a physical separation between your personal affairs and work equipment. See for example the Enron emails, which were made public as part of discovery and include thousands of personal emails from people who used their work email as personal email.
Another wrinkle on "company property" you have to watch out for:
When I was in grad school, a professor in my department left to take a job at another university.
The beancounters demanded the return of the department-issued computer he'd had...in 1985.
Of course, that was many, many computers ago, and what almost certainly happened was that he'd transferred the machine to a grad student or whatever when he got a new one, and they'd just lost the record of the transfer (or never entered it in the first place). Still, he had to go through a week or so of back and forth before they were convinced that a) it was unreasonable to expect him to account for a computer from decades ago and b) even if he did still have the 1985 computer, it wouldn't be worth anything like their book value any more. They actually wanted to charge him the original 1985 price for the "missing" computer!
I guess the moral there is to keep your own careful log of what happens to any company property that's been issued to you.
When I worked in tech support at my University, we 100% knew we were never getting it back but had to ask like once a year anyway because government. Public money means excessive tracing for any asset!!
> Another clause to watch out for […] is the "I agree not to cause any other employees to get hired," which prohibits you from hiring directly or allowing any current employees to get hired by the company to which you went. This clause protects the company from the unlikely event of a manager leaving and taking their team with them.
I had a previous employer threaten to sue me for this after a couple friends followed me to a new job on their own accord and despite having signed nothing of the sort. One strongly worded letter from a lawyer though and they dropped the whole affair.
I wonder how these hold up, and what the clause “I agree not to cause any other employees to get hired” means in a legal sense. Like, if you and I work at Company A, and you go to Company B and I want to go there because it’s amazing. If you recommend me, is that causal? I have to interview and all that still.
If you leave for a managerial role, can you hire me if I make first contact with your new company? That seems causal, but also easily circumvented.
The author ignores an important part of the negotiation equation - are you being adequately compensated for the imposed limitations?
For example a one year non-compete after separation might be unreasonable by itself, but coupled with one year of full severance pay is a different story, although there is still the "what am I supposed to do with my time?" issue.
If you are a founder/early employee with significant equity then a non-compete clause when being acquired will likely be acceptable to you.
There's this HN obsession with negotiating on non-competes. Here's the problem. Say that I work for Acme Corp that makes Fancy Widgets for Bridgettes with 11 Digits and I'm hiring a software engineer. We put out the offer and give them time to respond. They come back saying they would like the offer to be $10k higher. No problem... As the hiring manager, I might already know that we have $10k leeway, or at the most, I'll have to go ask someone a level or two above me.
Another candidate gets an offer and sees the non-compete clause (which is the same across all of Acme Corp's 10k employees) and asks for that to be removed. As the hiring manager, what do I do? My boss leads a division but doesn't have authority to change boilerplate contracts. Neither does her boss. So we need to go to Legal. But who do I reach out to there? The company's general counsel doesn't have time to deal with this. So I guess I start emailing around? Who do I go to who actually has the authority to change this? It becomes too much of a hassle and I turn candidate #2 away. Oh, and by the way, had candidate #2 signed the contract, they would have been banned from working for any other company whose business is primarily selling Fancy Widgets to people named Bridgette who have 11 fingers. It probably wouldn't have been an issue anyway.
My point is that people sometimes overthink this. Yes, non-competes are bad. I'd argue that they are immoral and certainly bad policy. But not every non-compete is created equally and sometimes maybe you'd be better off negotiating for other things that might be easier to negotiate on and would be more useful anyway. If you are a software engineer, it's often unlikely that you'd find yourself working for a direct competitor anyway.
Well lets say you work at TechCompany. TechCompany makes most of its revenue off of ads, but it has a bunch of side bets in classifieds, AI, self driving cars (or so its rumored), virtual reality, chat, even some finance tools. Now you want to go to NewTechCompany to go work on something there. But $TechCompany says you can't do that, they are a competitor, you can't work there for 12 months like your noncompete says! And you reply well no, I worked on search engine stuff here, I will be working on big data tools there, its completely different! And TechCompany just says- "No, they are also a tech company. You can't work there. On anything."
So you think about this for a minute, and go back out and go get an offer from an ad company (in the digital space). And again TechCompany comes back and says "No you cant work there, they are a competitor! We do ads too!" And you come back and are a little pissed now, and say "I have never worked on ads in your company before, I have no idea what that is all about, I don't have access to any of that stuff! I am going and stuff it!"
TechCompany now comes back and says "well we have an army of lawyers, we have already sent a letter to their legal department saying we intend to sue." This ad company is small and does business with TechCompany, and doesn't want to upset them or get into a long and expensive legal battle. They rescind your offer...
You now look at what else is out there... healthcare? probably not... they have some forays into that too. Insurance? ok maybe. A consulting firm? The options are just... small.
This by the way is not some completely fictional scenario. These agreements are meant to intimidate you and make it more difficult for you to leave. I had an egregious noncompete put on me, that essentially said I could not work in any business the company was involved in (which was ever expanding- though in the financial space), and at first they wanted it to be a fixed payment for not working, which while the number was equivalent to about 6 months of my base salary (which was only half of my total compensation roughly), I knew people at that firm that had been there 15 years. That number they signed was now paltry. They relented and said it could be based on base salary for that year, but that was it. I swallowed the bullet because I liked the company otherwise and the pay was great. Later I renegotiated my comp toward my base salary to make sure I was taken care of if I left.
Anyway, the specific details in my situation don't really matter. My wife has also been bent over by a non-compete in a similar fashion. You need to read this thing thinking about the worst case possible scenario if the company wants to bend you over, and nothing less. Taking these lightly puts you at risk of a world of hurt. My wife had to step back and take shitty jobs for 2 years because of a bad noncompete (for a place that she worked at for 4 months before she was let go after a re-org) and her compensation pretty much halved during that time- we talked to a lawyer, he said yeah you will probably win in the end, but it might take a year, a lot of money, the outcome is uncertain, and no one is going to want to touch you while the case is ongoing. DO NOT take these lightly.
That's why I prefer business to business type of contract rather than employment.
Unfortunately in many countries government are bribed by big consultancies to limit or even prevent individuals from running their own consulting business.
A big one is missing in this article: The clawback provision.
In 2011, when Microsoft bought Skype for $8.5 billion (that’s a B), some former employees and executives were outraged when they found that their equity was worth $0 because of a clawback in their equity documents.
“The only mention that the company had the right to buy if he left in less than five years came in a single sentence toward the end of the document that referred him to yet another document, which he never bothered to read.”
Do non-competes include money? The ones I’ve seen include your salary for that period of time. It sounds fair. You ban the employee from job prospects but compensate them in pay. Maybe this varies by industry, geography, etc.
No, not always. In my state, they have to compensate you with some minimum amount. I don’t know what that is, but based on my current contract, my guess is that it’s the equivalent of one week of pay.
(I’m fine with it because it’s a small, and not particularly interesting, industry. Plus, I’m in a DevOps role: none of our five or ten competitors are going give me a bag to have me build CI/CD pipelines.)
Ancillary, but I'll add to be careful with contracts around purchasing large building items, specifically in my case referring to SteelMaster buildings.
They will sell you on something saying they will deliver it and a truck is coming through your area soon, etc., then the sales guy will call at dinner time and say oh by they way your delivery is ready to ship out we just need you to sign something real quick and you're good to go. Then after you sign they will point to a clause in the contract that says they are not actually responsible for delivery and they won't deliver and you have to actually come pick it up. It's essentially a scam, and I'm unsure how they stay in business that way (I suppose people who work with them just know that's the deal and go into it knowing that), but it's one of those things that is a hard lesson to learn for having quickly signed something without fully reading it.
Non-competes are legit if they are narrowly limited in time and scope. It's perfectly fine for a company to demand that if they hand over their proprietary know-how to you, know-how that has cost them years to acquire, you won't take it to the competitor across the street. And no, an NDA is not enough to protect them. They own this information, not you, and no, you can't take it.
NDAs are legit for obvious reasons.
Work-for-hire clauses are absolutely required. If a company is paying you, they own what you create on company time and company equipment. No, you can't take it and sell it elsewhere. It's perfectly fine for you to resist signing a clause that says they own what you create offsite (so long as it's not related to your day job), but a company cannot continue to operate if employees can take what the company paid for.
Maybe they are legal (definitely not here in California) but the moral argument you’re making doesn’t make much sense because it works both ways - company has no intention of unlearning your past years of experience when you leave and so neither must you
> It's perfectly fine for a company to demand that if they hand over their proprietary know-how to you, know-how that has cost them years to acquire, you won't take it to the competitor across the street.
This never happens. For software developers, most "proprietary know-how" is awful in-house inner platforms that work like shit but you're forced to use it because otherwise some senior vice president would have to admit he made a bad decision 9 years ago. The companies who try hardest to protect their trade secrets are exactly those companies with the dumbest secrets. There's absolutely no risk to the company that their employees will take their competitive advantage to some competitor "across the street".
What actually happens is that the company uses this as a prison fence to keep their employees from being able to leave when they treat them like shit.
> If a company is paying you, they own what you create on company time and company equipment
You're misrepresenting what those clauses say. Those clauses actually say "literally anything you ever do from the time of signing this document until the time you quit, we own, if we want it." If you draw an idea for a new fusion reactor on the back of a napkin late one night in a bar, your company now owns all rights to that design, and you are never allowed to do anything with it, ever. Yes, that's what they say. Yes, they're bullshit. That's why everyone hates them.
The WFH analysis seemed incorrect to me also, as a former lawyer. It seems like the advice is geared toward a potential employee, not a potential contractor. If you're a contractor, it's not true that
> If you work for a software hub, any SaaS app you build over the weekend will belong to the company, regardless of whether you do it with company property or not — as it's related to the company's business.
Also, I'm not sure what to make of this claim:
> Belonging to the company means everything, not just the IP — the revenue, the code, and the good vibes.
Isn't this assumed, for both employment and contracting? If you're writing code for someone, then yes they own the code, the associated IP, the revenue they're going to generate with it, and the "good vibes". Which one of these things would an employee or contractor think he's entitled to?
Grabby abusive employers will likely hate this and downvote...But, while I don't have any experience with separate NDAs, never given nor received (they've always been baked into contracts and never presented a problem, were always scoped and not grabby), yet back in the day I turned down over USD 250K in multiple contracts that had funky "grabby vague IP provisions", or "grabby excessive non-compete provisions" when I was contracting and the contracts related to side-projects. Probably doesn't sound like much, but it was a lot for global remote at the time.
Well, it all worked out well. The personal projects I was working on and protecting paid beyond that now...!! Hahah.
Im just not made for this world, how and were can i outsource this ability to decipher legalesee somone willing to fix this for me for money, without exceeding the value gained?
You should sign what your trusted legal representation recommends you sign. Many of these situations are more nuanced than an internet blogger looking for clicks is going to make them out to be.
And yes, if you're making a 6-7 figure decision (which you often are when you sign an employment agreement as a software engineer), you should at least have an employment attorney give it a look through.
Noncompetes are mostly bullshit in the EU. Startup lawyers know the CEO has read too much SV literature so they write down that clause to make them happy.
"Everything belongs to your employer" clauses seem scarier to me although I have never seen them enforced either. But if you are making your employees sign those you should know it will likely kill their motivation to work on side projects, which will make them less competitive and motivated at work.
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[ 0.83 ms ] story [ 297 ms ] threadCheers, Vadim
https://www.bbb.org/us/tx/austin/profile/gymnasium/planet-fi...
No, many little independent gyms have caught on to the behavior too.
When he cancelled he was informed he’d actually been on a reduced rate based on an expected 10 year subscription, and as he hadn’t stayed 10 years, the price had actually been $60/month, so he now to pay a one-time fee of $10/month for every month he’d been with them, in order to be able to cancel.
Or, if he couldn’t afford that or didn’t want to pay, of course he could withdraw his cancellation and keep on paying his $50/month fee.
There are a few gyms that don't, but these tend to be based on personal training or snall group classes. That personal attention means they are more likely to end your contract for you if you are not attending as they need a good reputation to justify the high price they have to charge everyone.
If you know what your are doing in the gym you don't need the services of the more expensive ones, so canceling will be hard.
They rely on the fact many members will go less and less each month before reviewing and cancelling, so they get paid for 5-6 months.
My lesson here was: Never take a relocation package that has the company sorting your housing and travel, just ask for a large signing bonus instead.
The relocation management company racked up a bill I would have never incurred if I allocated the money myself.
Nobody should sign a contract where they can fire you and charge you relocation costs; that is not employment but a scam to prop up relocation companies!
If you quit, then it's 50/50 in my mind. My take is that I don't want to be liable anything for quitting; the signing bonus is literally a bonus for signing the contract, not an obligation to do a certain amount of work. Salary covers the work. But I'd probably take a signing bonus that requires some tenure to not have to pay it back. Spend the money after that period. (Relocation is different to me because the disruption in your life is what they're paying for. If you don't like the job, your life was still disrupted. You're not asking for them to unrelocate you.)
I've agreed to some terms because I didn't actually care whether they were enforced, because I was pretty confident the company couldn't or at least wouldn't do anything about it, or because my life circumstances didn't supply the luxury of choice.
Understanding the potential consequences and "why those may be bad" is useful, and prodding companies/governments to move away from that stuff is awesome, but "don't do that" isn't necessarily an option in many (most) contexts.
I'd argue that the best thing we can do is to not just make generalizations about what is OK to sign or not. Confidentiality agreements and non-competes are fine if they are narrowly focused, fair, and your compensation is sufficient to make it worth the restrictions. Because that is what a contract really is - a balancing act between obligations and limitations put on yourself contrasted with benefits (money) given to you in exchange.
So an absurd non-compete is fine if they pay me a lot of money for it. An confidentiality clause is fine if they pay me a lot of money for it.
This becomes critical when looking at all the recent layoffs. Most severance packages are exactly this type of contract - confidentiality and other restrictions in exchange for your severance pay.
Should you sign? Maybe. Maybe the severance pay is worth it. Read the contract, understand it, and make a choice.
But in this case, I think they are identifying an implication of "not making generalities" which I find to be perfectly appropriate. It reminds me of the robolending scandal, and how companies involved tried to deflect systematic criticism by suggesting each instance of robolending needed to be reviewed on a case by case basis without drawing why systematic conclusions.
It's meant as a criticism of how "don't make generalizations" can be used to deflect important and appropriate criticism, and I don't think it's just a case of someone changing the subject randomly.
You can object to style without having to signal to the community that misinterpreting comments is an accepted practice.
Endorsing the misread as the cost of doing business in order to reject a comment over stylistic objections signals that misreading is to be embraced as a community value.
I found their tone quite sneering and flippant, and so I parodied it (pretty mildly, I might add, the implications are right there in the comment I replied to).
Moreover, it doesn't prevent unreasonable entities from having their retained lawyers draft scary letters. Most people just sign the boilerplate, hope for the best, and try not to poke sticks into wasp nests if they can avoid it.
After all, we make promises all the time that are unenforceable, but we keep them.
In fact, that scenario is so dishonorable that in some states you can ask the court for triple damages if the employer tries to enforce the noncompete
For anyone in the US who needs regular healthcare beyond what's provided by Medicaid, the labor market is a war for (literal) survival. If the ownership class didn't want to return to an extremely adversarial relationship with labor, then they shouldn't have gutted the social safety net.
And no, I'm not going to show my hand in an imperfect information game... it would be stupid and dishonorable to my family to present with anything other than bourgeoisie professional-managerial class sensibilities.
If one party holds all the cards in a contract negotiation it's never truly being negotiated in good faith in the first place. Furthermore, one could argue that without having an expert on contract law right then and there available to answer any questions about any given contract means it falls under a "lack of capacity" for basically anyone who isn't a lawyer.
Employee agreements often fail in courts because of:
The "usual one" is unconscionability: Employers have unfair bargaining power almost all of the time and judges and juries are easy to convince of this. Also, these sorts of things don't usually make it to court unless there's something ridiculous in the contract. What's interesting is there usually is something ridiculous in every employee contract. It's just that those ridiculous things aren't usually the part of the contract a company is trying to enforce so they don't come up as often.Nobody is making you sign it.
They're likely banking on that sense of honor to make you hold yourself to obligations they can't legally hold you to.
My employment lawyer friend is fairly certain that if a FAANG tried to enforce a noncompete without a garden leave clause, they could be sued for triple damages, where the damages would certainly include the minimum required garden leave, and that if the enforcement attempt resulted in a job opportunity being aborted you could probably also include the full vesting schedule of your next employment contract in the damages (which, again, gets tripled).
[1] M.G.L Chapter 149 Section 24L:
(b) To be valid and enforceable, a noncompetition agreement must meet the minimum requirements of paragraphs (i) through (viii)...
(vii) The noncompetition agreement shall be supported by a garden leave clause or other mutually-agreed upon consideration between the employer and the employee, provided that such consideration is specified in the noncompetition agreement. To constitute a garden leave clause within the meaning of this section, the agreement must (i) provide for the payment, consistent with the requirements for the payment of wages under section 148 of chapter 149 of the general laws, on a pro-rata basis during the entirety of the restricted period, of at least 50 percent of the employee's highest annualized base salary paid by the employer within the 2 years preceding the employee's termination; and (ii) except in the event of a breach by the employee, not permit an employer to unilaterally discontinue or otherwise fail or refuse to make the payments; provided, however, if the restricted period has been increased beyond 12 months as a result of the employee's breach of a fiduciary duty to the employer or the employee has unlawfully taken, physically or electronically, property belonging to the employer, the employer shall not be required to provide payments to the employee during the extension of the restricted period.
The question is what is the rate of voluntary compliance in what would otherwise be an illegal contract.
I think it’s boilerplate in big company contracts there, but extremely rarely enforced, because IIRC the amount you have to pay is the comp for the job you’re blocking.
When I had a contract like that, I occasionally fantasized about getting a FAANG job and being paid in full to not take it, but in reality that would never happen unless you got caught in a spat between rival executives.
As an engineer, I have seen a lot of contracts with bogus non-compete clauses and never seen one that would hold in court. So the employees are technically protected but still subject to psychological warfare (threats when you plan to ignore an illegal clause).
Yes! This is a particularly true for most software engineers. I have a friend who is a doctor whose contract says that if quits, he can't practice medicine within a 30-mile radius for 12 months. His only option would be to move to a different area, take a job with a horrible commute for a year or to wait it out. On the other hand, as a software engineer, I've never been in a situation where my thought is to move to a direct competitor. My skillset is broadly applicable to many industries, and it wouldn't be strange to do one gig for Home Depot, the next one at Google, followed by a role at Tesla.
The entire concept of going to work for someone else is that it's supposed to save you a lot of trouble having to sell your services on your own/run your own business. If it has become so much more profitable for doctors to leave and start their own practice then they should be doing that because you're not paying them enough! You're not "making good" on your end of the bargain that we offer in civilized society.
That line of reasoning goes both way. If you sign something, then it was worth it for you.
It depends. Many instruments, such as PET in nuclear medicine, cost a lot. One have to work for hospitals/networks to help his/her patients with that instruments, no matter how good he/her is.
Also, if the doctor's patients all like him enough to switch to his private practice when he leaves then clearly they weren't paying the doctor enough. He was worth that many patients!
Can't stress this enough. Show up, attend to patients as scheduled then go home and enjoy life. All the boring details are taken care of. It's definitely more profitable to start one's own practice but the comfort of working at such places should not be underestimated.
Going from Google to Tesla? Sorry, they're a competitor in driving cars. Spotify? They compete in streaming music. Microsoft? They compete in search. Apple? They compete in cellphones. Telegram Inc? Google does instant messaging. Garmin? Google does maps. NCR? Every heard of Google Wallet?
Another consideration is whether the contract can be enforced and your legal recourse if the counter-party attempts to enforce an invalid contract clause. This is particularly true for noncompetes.
A better piece of advice than "never sign" is to simply find an employment lawyer and discuss the ramifications of the contract prior to signing.
More importantly, I would also happily fight them in court if it came to that (and retire on the triple damages).
I'm thinking of some of the other clauses:
1. "one-sided termination clause": Every contract in an at-will jurisdictions without a guaranteed exit bonus contains, implicitly or otherwise, a "one-sided termination clause". I have never seen a contract for "normal working stiffs" that contains an exit bonus, and I've only ever worked in at-will jurisdictions.
2. IP assignment
3. Confidentiality agreements with broad language
The whole thing is laughably unenforceable as well. They're trying to end run around federal law protecting members of the uniformed services. You can write any contract you want & have anyone you want sign it about. Doesn't mean anything, at all.
Also I'm pretty sure if I got called up to go to war, there is going to be someone in the DoD who can give me a little legal help in explaining to the landlord how hard they need to pound sand.
So yea, in a case like that that part of the contract would be struck, but it isn’t a get out of jail free card for the entire contract.
The same company also just dropped off an "updated" contract a few months later and told me that I had to review it and sign it or move out by the end of the month. I obviously just ignored this.
DIY contracts are the best to sign because they are such a mess.
Reasonable companies don’t want to get a reputation for litigating employment clauses like this. Sure, there are outliers, but nobody wants to be on the front page of HN for suing an engineer over a side hustle. Especially not in this labor market!
Side note: it was delightful to me that the engineers carefully read the agreement and one of them consulted their own lawyer. Most people don’t do that.
No, and my posts are not legal advice.
> Or do you have a lawyer review every contract you sign?
Yes, and they provide me with legal advice specific to my situation.
> Just curious how you are so confident a particular contract, or clause within, is unenforceable. Not saying you're wrong, but how do you know?
MA statute is very clearly written and its courts don't have a reputation for fucking around with legislative intent.
And I'm free to work on other stuff or have a side business. People in the company disagree on how much of that needs to be disclosed, though.
Work for hire clauses are totally normal for certain kinds of work and no sane company is going to want you contributing some relatively inconsequential portion of a creative project unless the contract makes it clear you won’t claim to own it all later.
Same goes for the idea of never signing an exclusive distribution agreement. You would tell someone not to have their book published by a major publisher?
The rest mostly have nuance too. The various forms of non compete and NDA agreements are clearly unethical for entry level workers and would be essential for any high level CEO gig, or principals in a corporate acquisition
Also big companies are conservative, and they don’t care about your demands. If you don’t have a track record and want to do business with big companies you might have to sign some crazy stuff. Your other option is to not get enterprise business, and for the most part it doesn’t really matter it’s fine to sign some stuff and get paid.
The answer to this stuff is it depends.
Whether it's a small startup that's using a generic contract they've gotten from the internet or their lawyers, up to massive corporations, they're all going to include semblances of some of these points. Probably for different reasons, but the points will still be in there. Startups and small companies might be more flexible to work with you on changing parts, but still the legal headache of changing anything is often far greater for the company than just passing on you and looking for another candidate. Infinity moreso for big companies.
My experience is biased towards technical roles (like most on HN), but I've worked for startups, big companies, and as a freelance contractor. It's the same stuff in most contracts. Obviously my experience is not indicative of 100% of companies and I'm sure I'll have people chime in saying they had success getting company X to change some of their contract, but it's overwhelmingly not going to happen. So to treat these points as 'rules' instead of 'points to be aware of' is a bit too hardline of a stance to take in my opinion.
Noncompetes I've been fine with, because they were always quite niche companies, and the wording was something along the lines of "don't join our direct competitors for a few years", and that seems ok to me. I will grant that it gets more complicated with megacorporations that work on everything though, as their "competitors" are roughly everyone.
I've had a very negative experience, where I also asked, and they basically said "sign it or GTFO". So I did the latter, and I'm very glad I did.
Which is the other piece of the puzzle - lawyers are really good at knowing when they actually have power and when they do not. Unfortunately, when they don't truly have legal power they resort to bullying. So if you are being bullied to sign a contract, that usually is a red flag to stop, really look at things, and figure out why they are using that tactic. You may be in a better situation than you think.
In your case, they did not exercise that right. But I've been at places where they did. For something as petty as not signing an agreement which appeared to eliminate some employee benefits that were contractually obligated. Could the fired employees have sued, and won? Perhaps. But it would be an expensive, risky, time-consuming proposition to find out.
Contracts are entirely negotiable. If there's a job you want, but the contract contains an objectionable clause, tell them that you're willing to accept if they strike that clause. If you're at the point in the hiring process where they're showing you the contract, that means that they've sunk resources into you that they don't want to throw away. And the fact that these clauses are boilerplate, as you say, works in your favor, because nobody involved in the hiring process consciously chose to put that clause in and they probably don't really give a damn.
Yes but I think I didn't convey my point enough. Nobody involved in the hiring process cares, and if it's a good company they probably agree with you. But this standard contract is what they paid attorneys good money to comb over with a fine tooth comb for liability, and eventually sign off on.
Very very very few companies are going to go pay Expensive Law Co. (TM) $500 per hour to review changes to the contract just because _one_ potential hire who still might not even accept the offer says they won't accept if that's in it. It's way out of most recruiters or engineering managers that you might be interfacing with to make that happen, not to mention making their life way harder. Heck even a startup CTO might balk at having to go spend more on legal.
I have had clauses similar to the "we own everything you do 24/day" one and I've pushed back on all of them. Every time, the response is "yes we totally understand but we have no power to change the wording in this contract we use for every single employee" and it just comes down to a gut judgement call on my part on if I feel they will actually screw me over on that point.
Again to emphasise, I totally agree logically with author's and your points. But it's simply not realistic to approach job hunting that black and white unless you're comfortable being out of work for months until you find the perfectly-flexible-enough company.
Of course, if the clauses are enforceable in your state, it might be a different matter, but that's also an opportunity to make demands. "Sure we agreed to $XXX,XXX , but there was no mention of a noncompete. That's going to need $XXX,XXX+$YY,YYY or $Z weeks of vacation". Make the numbers bigger than you think is reasonable, and they'll probably cave on the contract clause. Or they'll compensate you for it. Win/Win.
The correct course of action is to cross out the clause, put your initials next to it, then sign the document. It is the responsibility of the company to have someone review contracts for such things but they never do; they just collect all the documents, check they're signed, and file them away to be forgotten about forever (or until a lawsuit requires they be retrieved).
I've done this at several employers! I even tell the HR people what I'm doing so they can't claim they're being misled. Not once have they ever understood what I was even talking about or even cared. It's because they're HR people; not lawyers. They just "follow the script" as it were.
One woman at HR said that what I did--crossing out the "we own everything you make while you work here plus a year afterwards" clause--was a "very good idea" and just took my documents and filed them away like anyone else's. I even offered alternative language that would be fair along the lines of, "we own everything you make using company resources in your official line of work" but she wasn't interested.
A lot of HN folks make stuff and these invention clauses are completely ridiculous. If you invent a new kind of apple peeler in your garage on a weekend using your own tools it is absolutely unconscionable that your employer who pays you to do programming or management work could claim ownership of that thing. Even if the contract says as such I seriously doubt any court would enforce that unless you worked at a manufacturer of apple peelers.
Really it depends whether you’re negotiating from a position of strength and and can walk away, if you are changes like this become possible, if you are not changes are more difficult.
> Very very very few companies are going to go pay Expensive Law Co. (TM) $500 per hour to review changes to the contrac
If they are already hiring "Expensive Law Co." then most likely they have them contracted anyway. Even with big corporations, there was never an issue with this. They were always happy to send my changes to their legal team for review and also allowed me as much time as I needed to review and consult my own legal team (if I had one). It is in their and my interest that the contract describes the relationship in a way we both want and it is fair for both sides.
> "yes we totally understand but we have no power to change the wording in this contract we use for every single employee"
Had that too. Just be persistent and firm. "I can't sign the contract with these clauses in." 100% of the time they would eventually change their mind. It may be bad for them that the clauses will be gone, and they need to show their employer they put up a fight and also it would be much worse to lose resource that otherwise was ticking all the boxes.
I've successfully negotiated contracts several times in the past. Even once at a big company (that I knew was desperate :). As long as what you're asking for is reasonable they'll usually make the change unless it's a really big company. In that case they're not going to bother and just tell you to either sign it or go to work somewhere else. They know they have plenty of leverage and there's always someone else they can hire.
I'm sure some people have negotiated these things but I've tried multiple times - to shorten noncompete lengths, to remove the "anything you do on our machine is ours for all time" stuff, etc - but never had any success.
The response there is "Well you aren't a lawyer either, and mine said it needs to go".
As others here have said, crazy clauses can go. One key point, make it clear it is about unduly restricting right to income in the future, without wanting to screw over anyone.
This is why a second response, such as "Well, if you triple the salary ... maybe" makes a point here.
Some contracts literally make it impossible for you to work in the future, in your field. That means 'gimme retirement salary on exit' minimum.
(Such broad clauses are rarely enforceable, you can't prevent a person from working at all, but... )
In the tech industry, yeah, but there are industries that aren't so employee hostile where you can find better contract terms. I'd have to say in my experience, the tech industry is one of the worst when it comes to the malicious application of employment contracts. Apple is especially egregious with forcing interviewees to sign expansive NDAs; the Dilbert cartoon is spot on by making them dress like Apple store employees.
I somehow doubt that Vail Resorts has a non-compete for their lift operators to go work on another mountain (although now that I think about it VR is pretty terrible so this might have been a bad example)
The noncompete agreement prohibited Mr. Meier from hiring any of Intermountain’s employees, from janitorial staff to ski lift operators
https://ag.ny.gov/press-release/2022/attorney-general-james-...
Also, fast-food employees: https://news.ycombinator.com/item?id=28702468
I recently left a company where, when I was hired, I had agreed in "Appendix C" not to recruit any of their employees away from them for a period of 12 months after separation. When I actually separated after more than two years, the "Appendix C" they wanted me to sign and presented as the one I had agreed to at hire now said 24 months. I told them I was happy to stand by my original agreement of 12 months, but I had no incentive to extend to 24 and would not be doing so. They sent me one with the right number and I signed.
Their story was that, in the two years since I'd signed, they changed Appendix C and had "accidentally" given me the one that pertained to people who had been hired after me under the revised terms. I'm willing to give them the benefit of the doubt, because why believe people are malicious when they could just as well be careless?
When your job is to be careful, being careless is nothing but malicious.
I sincerely don't think there was malice involved, certainly not at his level, so I just treated it like that.
Some wrinkle of "the law" probably works that way?
I would happily sign a 1 page document that said, "I acknowledge that I have been reminded of my obligations under the document signed April 1, 2004 and been provided with paper copies of said agreement."
Part of the issue is that lawyers get too free of a hand sometimes. We signed, agreed, that part is over.
Frankly I have never attended an "exit interview", and never will.
That said, if someone want a reminder sign, as you say, I'd expect the corp to sign one too, and give me a copy, as well.
When signing contract between two entities, neither side is special.
In the Clerky boilerplate employment docs, used by many YC companies, the employment agreement contains a Termination Certificate along with a clause that says something like “upon leaving the company you agree to sign the Termination Certificate in the appendix”.
So technically, in the case of Clerky’s boilerplate docs, you agree to sign the termination form before employment even begins.
FWIW the termination certificate I’m thinking of is a very simple 1 page agreement basically just acknowledging to the company that you have returned all company IP, hardware, etc to the company and agree to continue to abide by the original employment agreement. It doesn’t really add any additional obligations.
I suppose the benefit to the company is just a reconfirmation that you are aware of the terms of the original agreement and that you’ve followed through with basic duties such as returning confidential data, hardware, etc to the company.
That said, many employers have additional severance agreements that can add lots of additional expectations such as non-disparagement clauses, but that’s typically only done in exchange for additional severance the the company isn’t legally obligated to provide you (in which case you can absolutely say you won’t sign the agreement if you want to forgo the severance payment)
I was leaving of my own accord, so no severance involved, which was why I told them I was happy to stand by the terms I'd already agreed to, including signing the termination agreement, but I wouldn't be signing a document that contained new terms.
It happens.
HR never knows what to do and usually just never gets around to replying to the email.
It would really depend on the job, of course. I didn't really care about that one, and didn't see myself ever wanting to work with that founder again, so I didn't make any effort to be "nice" in any way. If I ever left my current job, I would make sure to stay on the best of terms. I would be annoyed if they paid me $1 to not work for a year, but I also know they would never ask for that.
I didn't have any issue with the agreement I had already made. I just wasn't willing to change it as I was voluntarily leaving and they weren't offering me anything to change the terms.
I'm not even 100% sure I would have noticed it except that my new employer required disclosure of any restrictions I had, so I disclosed the 12-month non-recruit from the previous company. It was fresh to mind.
The two companies are in the same general industry, but do not compete with each other.
For those who like named things: https://en.wikipedia.org/wiki/Hanlon%27s_razor
Weird.
Funny how their "carelessness" always seems to benefit them at our expense.
Better, just don't sign anything when leaving without sufficient new consideration. If they really want to five you a reminder of what you signed when you joined, that’s what copiers are for.
That doesn't sound unacceptable to me. It's not that I'm that strict about e.g. reading personal emails etc. on my work computer, but if it's some side hustle, be it for money or for fun, I think it's honest to take your personal machine for that.
If I gave you a pen and you wrote some story with it, then could I claim the rights to that story? I think not.
If I write code using some company computer, then the most they could do is charge me for the damages, i.e. the power used or in the worst case I would have to replace the computer.
If you "just give" me something without any conditions then no, you could definitely not claim that story. But if you make that pen, your property, available to me explicitly only for work and nothing else?
It's your property, not mine. I only have whatever rights you grant me to it.
If I used the company computer to access a dating-website, then could the company claim ownership of my firstborn child, if that was in the contract?
No, but first kiss is definitely on the table.
Let's leave aside whether the law (in whatever country) permits such a one-sided contract, and ask - should it permit it? There are plenty of contract terms that are illegal (i.e. not backed by law), such as usury [1] or various anti-competitive practices, because their enforcement is seen as either unfair, or a detriment to society, regardless of whether they were entered freely. Contracts are not and should not be above the law.
[1] https://en.wikipedia.org/wiki/Usury#Usury_law
I mean, I do agree with you in general, its just that I do not see this issue as a detriment to society. If someone demands massive interest rates on loans that you need to survive thats definitely unethical.
A company demanding that you do not use their laptop so that you can work on your side projects at home ... well, that doesn't quite sound as bad. There is nothing stopping you from just buying your own device.
Thats like saying "only use the company car for work stuff" ... it just doesn't seem that unfair or unethical to me to be honest.
Safer that way.
Companies do include policies about how their equipment is to be used and for what and they do include how they think about ownership usually in your employment agreement or principles of employment policies. To write those off because “hey it’s only a generic piece of equipment” is perilous.
I suspect how you think about the analogy changes if you write the story on company letterhead or if you used the company car for your catering side hustle on the weekends.
We have a policy that states, "company equipment can not be used for personal use". As without this company equipment can not be tax deductible. However, in the UK at least, it is a matter of economic policy whether a company makes any effort to in-force.
Thus I hit on what a I thought was a neat solution. Which was to deem it a sackable offence to expend any resource whatsoever including time or materials to identify if company property had been so used.
Is anyone really running their side businesses from their work laptops? That seems crazy to me.
If a laptop is like a pen, what about a high end graphics workstation? What about a small server? Internet bandwidth is a cheap commodity, can I run my site from work? Electricity is basically free (I charge my personal scooter at work), what about a small Bitcoin miner?
More seriously though, there are frequently restictions of the use of office equipment (or business equipment in general). Businesses will often overlook it if it is not a problem, say if you need a photocopy of a rental contract. They have the discretion to say no if the privilege is being abused, say if you started printing hundreds of pages a month for personal use. The misuse of pens is rarely seen as an issue since they hold little intrinsic value and are routinely replaced.
Should they be able to claim the rights to something you produced with their equipment? In most cases, no. I'm not going to say in all cases no since there is always going to be someone who pushes the limits beyond reason. (Say a person develops a piece of software with a company computer to sell on the side. Can that be construed as the business indirectly financing the development of the software by providing hardware and/or software tools?)
In general, it is always a good idea to do personal stuff with personal equipment and business stuff with equipment supplied by the business. I'm sure the coworkers who are searching for the missing pens will thank you for doing so.
It is completely unreasonable as a blanket statement.
My employer's laptop, my current client's laptop (I'm in a consulting branch of a large corporation), and my personal laptop. Pre-Covid I lugged them on airplanes every week.
I enjoy HN for many reasons, one of which is to encounter approaches and perspectives that I would not ever even remotely consider. I would not use my employer's laptop for personal, let alone a side-gig purpose, with a 10 foot pole. It's not mine, I have no control of it, I have no visibility into what is being monitored nor how it is used, where the data goes, what I should install on it, etc. Employer has full legal right to request it back this evening, do whatever forensic examinations they want, and have interesting questions or claims on anything they find.
Yes laptop is a tool, but it's such a complex multipurpose massively powerful dangerous tool, that even if we try to make a claim "Pen and Laptop are legally the same as a employer-provided-tool", I find the surface area of a Pen minuscule compared to the surface area of a laptop and everything I can do with it / put on it.
Yes, it is perfectly reasonable and in many cases prudent to not use your companies laptop for home-use. So you may chose not to do it.
That the company would own everything you did on it is still completely unreasonable.
(If you did not install fresh OS from image of your choice, then you did not install software from scratch and should not be confident what's in your work laptop and what it's doing / monitoring)
It's not your equipment, you didn't buy it, you can't just do whatever you want with it. It's like being given a company car but going on a 3,000-mile roadtrip "because why should I have my own car if you gave me this one?"
It's not remotely unreasonable to expect someone not to use their employer's equipment to make money on the side, especially for something like a laptop which over the course of what a developer earns in 4-5 years is basically nothing.
I personally find your position unreasonable: that you should be entitled to use property that is not yours how you see fit, because it’s more convenient to you.
In reality, any sane organization wouldn’t punish you for reading the news on your work computer, but to assert you should be given access seems unreasonable to me. You’re paid to do a job and they provide some tools for you to use to complete that job.
When I was in grad school, a professor in my department left to take a job at another university.
The beancounters demanded the return of the department-issued computer he'd had...in 1985.
Of course, that was many, many computers ago, and what almost certainly happened was that he'd transferred the machine to a grad student or whatever when he got a new one, and they'd just lost the record of the transfer (or never entered it in the first place). Still, he had to go through a week or so of back and forth before they were convinced that a) it was unreasonable to expect him to account for a computer from decades ago and b) even if he did still have the 1985 computer, it wouldn't be worth anything like their book value any more. They actually wanted to charge him the original 1985 price for the "missing" computer!
I guess the moral there is to keep your own careful log of what happens to any company property that's been issued to you.
I had a previous employer threaten to sue me for this after a couple friends followed me to a new job on their own accord and despite having signed nothing of the sort. One strongly worded letter from a lawyer though and they dropped the whole affair.
If you leave for a managerial role, can you hire me if I make first contact with your new company? That seems causal, but also easily circumvented.
For example a one year non-compete after separation might be unreasonable by itself, but coupled with one year of full severance pay is a different story, although there is still the "what am I supposed to do with my time?" issue.
If you are a founder/early employee with significant equity then a non-compete clause when being acquired will likely be acceptable to you.
Another candidate gets an offer and sees the non-compete clause (which is the same across all of Acme Corp's 10k employees) and asks for that to be removed. As the hiring manager, what do I do? My boss leads a division but doesn't have authority to change boilerplate contracts. Neither does her boss. So we need to go to Legal. But who do I reach out to there? The company's general counsel doesn't have time to deal with this. So I guess I start emailing around? Who do I go to who actually has the authority to change this? It becomes too much of a hassle and I turn candidate #2 away. Oh, and by the way, had candidate #2 signed the contract, they would have been banned from working for any other company whose business is primarily selling Fancy Widgets to people named Bridgette who have 11 fingers. It probably wouldn't have been an issue anyway.
My point is that people sometimes overthink this. Yes, non-competes are bad. I'd argue that they are immoral and certainly bad policy. But not every non-compete is created equally and sometimes maybe you'd be better off negotiating for other things that might be easier to negotiate on and would be more useful anyway. If you are a software engineer, it's often unlikely that you'd find yourself working for a direct competitor anyway.
So you think about this for a minute, and go back out and go get an offer from an ad company (in the digital space). And again TechCompany comes back and says "No you cant work there, they are a competitor! We do ads too!" And you come back and are a little pissed now, and say "I have never worked on ads in your company before, I have no idea what that is all about, I don't have access to any of that stuff! I am going and stuff it!"
TechCompany now comes back and says "well we have an army of lawyers, we have already sent a letter to their legal department saying we intend to sue." This ad company is small and does business with TechCompany, and doesn't want to upset them or get into a long and expensive legal battle. They rescind your offer...
You now look at what else is out there... healthcare? probably not... they have some forays into that too. Insurance? ok maybe. A consulting firm? The options are just... small.
This by the way is not some completely fictional scenario. These agreements are meant to intimidate you and make it more difficult for you to leave. I had an egregious noncompete put on me, that essentially said I could not work in any business the company was involved in (which was ever expanding- though in the financial space), and at first they wanted it to be a fixed payment for not working, which while the number was equivalent to about 6 months of my base salary (which was only half of my total compensation roughly), I knew people at that firm that had been there 15 years. That number they signed was now paltry. They relented and said it could be based on base salary for that year, but that was it. I swallowed the bullet because I liked the company otherwise and the pay was great. Later I renegotiated my comp toward my base salary to make sure I was taken care of if I left.
Anyway, the specific details in my situation don't really matter. My wife has also been bent over by a non-compete in a similar fashion. You need to read this thing thinking about the worst case possible scenario if the company wants to bend you over, and nothing less. Taking these lightly puts you at risk of a world of hurt. My wife had to step back and take shitty jobs for 2 years because of a bad noncompete (for a place that she worked at for 4 months before she was let go after a re-org) and her compensation pretty much halved during that time- we talked to a lawyer, he said yeah you will probably win in the end, but it might take a year, a lot of money, the outcome is uncertain, and no one is going to want to touch you while the case is ongoing. DO NOT take these lightly.
In 2011, when Microsoft bought Skype for $8.5 billion (that’s a B), some former employees and executives were outraged when they found that their equity was worth $0 because of a clawback in their equity documents.
“The only mention that the company had the right to buy if he left in less than five years came in a single sentence toward the end of the document that referred him to yet another document, which he never bothered to read.”
https://stockoptioncounsel.com/blog/standards-ownership-cant...
https://www.forbes.com/sites/dianahembree/2018/01/10/startup...
(I’m fine with it because it’s a small, and not particularly interesting, industry. Plus, I’m in a DevOps role: none of our five or ten competitors are going give me a bag to have me build CI/CD pipelines.)
They will sell you on something saying they will deliver it and a truck is coming through your area soon, etc., then the sales guy will call at dinner time and say oh by they way your delivery is ready to ship out we just need you to sign something real quick and you're good to go. Then after you sign they will point to a clause in the contract that says they are not actually responsible for delivery and they won't deliver and you have to actually come pick it up. It's essentially a scam, and I'm unsure how they stay in business that way (I suppose people who work with them just know that's the deal and go into it knowing that), but it's one of those things that is a hard lesson to learn for having quickly signed something without fully reading it.
https://www.bbb.org/us/va/virginia-beach/profile/modular-bui...
Didn’t see the particular one you mentioned. It is amazing companies like this can get away with so much crap.
Non-competes are legit if they are narrowly limited in time and scope. It's perfectly fine for a company to demand that if they hand over their proprietary know-how to you, know-how that has cost them years to acquire, you won't take it to the competitor across the street. And no, an NDA is not enough to protect them. They own this information, not you, and no, you can't take it.
NDAs are legit for obvious reasons.
Work-for-hire clauses are absolutely required. If a company is paying you, they own what you create on company time and company equipment. No, you can't take it and sell it elsewhere. It's perfectly fine for you to resist signing a clause that says they own what you create offsite (so long as it's not related to your day job), but a company cannot continue to operate if employees can take what the company paid for.
It's never about making the money back, is it?
This never happens. For software developers, most "proprietary know-how" is awful in-house inner platforms that work like shit but you're forced to use it because otherwise some senior vice president would have to admit he made a bad decision 9 years ago. The companies who try hardest to protect their trade secrets are exactly those companies with the dumbest secrets. There's absolutely no risk to the company that their employees will take their competitive advantage to some competitor "across the street".
What actually happens is that the company uses this as a prison fence to keep their employees from being able to leave when they treat them like shit.
> If a company is paying you, they own what you create on company time and company equipment
You're misrepresenting what those clauses say. Those clauses actually say "literally anything you ever do from the time of signing this document until the time you quit, we own, if we want it." If you draw an idea for a new fusion reactor on the back of a napkin late one night in a bar, your company now owns all rights to that design, and you are never allowed to do anything with it, ever. Yes, that's what they say. Yes, they're bullshit. That's why everyone hates them.
> If you work for a software hub, any SaaS app you build over the weekend will belong to the company, regardless of whether you do it with company property or not — as it's related to the company's business.
Also, I'm not sure what to make of this claim:
> Belonging to the company means everything, not just the IP — the revenue, the code, and the good vibes.
Isn't this assumed, for both employment and contracting? If you're writing code for someone, then yes they own the code, the associated IP, the revenue they're going to generate with it, and the "good vibes". Which one of these things would an employee or contractor think he's entitled to?
Well, it all worked out well. The personal projects I was working on and protecting paid beyond that now...!! Hahah.
And yes, if you're making a 6-7 figure decision (which you often are when you sign an employment agreement as a software engineer), you should at least have an employment attorney give it a look through.
"Everything belongs to your employer" clauses seem scarier to me although I have never seen them enforced either. But if you are making your employees sign those you should know it will likely kill their motivation to work on side projects, which will make them less competitive and motivated at work.