Author Topic: Non-compete agreements ?  (Read 126 times)

benali72

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Non-compete agreements ?
« on: May 28, 2017, 05:17:39 PM »
I happened to see this article on how non-compete agreements are spreading to all levels of employee -- www.nytimes.com/2017/05/13/business/noncompete-clauses.html?mcubz=2&_r=0

I wonder what kinds of NCA's people here have run into.

Among my contractor friends I most often see NCAs that prevent you from working for the same company that you sub-contracted with for 1 year after leaving there. Many feel that's reasonable. Otherwise the contractor might try to just cut out the intermediary that placed him with the client.

But I've seen a few NCAs that are abusive. Such as, you can't work for any of the intermediary's clients for a year (which could ban you from work in that city in the case of a major contractor). Or you can't work for any other firm in the same industry as the client.

What's been your experience? Reasonable terms or abusive?


The Gorn

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Re: Non-compete agreements ?
« Reply #1 on: May 28, 2017, 05:24:47 PM »
What's been your experience? Reasonable terms or abusive?

When it's from a bork, it's always a strong-arm bid to keep you away from their current and even potential future clients. Borks add no value so their business model always consists of domination and strongarming (recall Stretch and LVITR recruiter assholes who used to hang out here?)

When it's from a small business and the NCA was created with the direct input of the owner, it's generally a dickheaded, stupid, egotistical, amateurish overreach that panders to the owner's slave plantation thinking.

The classic story I provide about this is the guy I worked with for a few years who sold tax preparation software. He prohibited his employees from working in the future with anyone who provides accounting software - which is pretty much 4/5 of the shrinkwrap software market. Not just tax related software but ALL accounting related software products.

I challenged him on this and he argued like crazy that I was misinterpreting what sounded like very, very clear words. As always I had to say "I'm walking away from this, you're fucking crazy" to get him to amend it for me. His FTE slaves still had to obey it, though.

Non competes reach right down to the paper-or-plastic crowd near minimum wage crowd. Jimmy John's sub shops had a non compete for their "sandwich artists".

http://www.cnbc.com/2016/06/22/jimmy-johns-drops-non-compete-clauses-following-settlement.html
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pxsant

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Re: Non-compete agreements ?
« Reply #2 on: May 28, 2017, 05:27:44 PM »
With contracting through an agency, the problem is that most consultants do not even read the contract.   Generally they are pretty desperate for work so they would pretty much sign anything.  I personally will not sign anything that has a longer non compete length than 6 months.   Also the non compete  must be limited to that specific location for the client, not all locations.  Consultants don't realize they have leverage.   Once an offer is extended, the agency is desperate to get you in the account and working so they can make money.   So if you read the contract and modify it for objectionable content, the agency will usually accept your changes otherwise they risk losing the assignment.

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Re: Non-compete agreements ?
« Reply #3 on: May 28, 2017, 05:29:48 PM »
With contracting through an agency, the problem is that most consultants do not even read the contract.   Generally they are pretty desperate for work so they would pretty much sign anything.  I personally will not sign anything that has a longer non compete length than 6 months.   Also the non compete  must be limited to that specific location for the client, not all locations.  Consultants don't realize they have leverage.   Once an offer is extended, the agency is desperate to get you in the account and working so they can make money.   So if you read the contract and modify it for objectionable content, the agency will usually accept your changes otherwise they risk losing the assignment.

The classic head game (part of the domination and power thing) that recruiters engage in is to tell you that you're being mentally defective and paranoid for scrutinizing the contract or objecting to specific provisions.

As pxsant indicates, they point to the majority of their current contractors who never asked the first question and accepted every provision.
« Last Edit: May 28, 2017, 05:40:43 PM by The Gorn »
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benali72

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Re: Non-compete agreements ?
« Reply #4 on: May 29, 2017, 03:09:31 AM »
....  Consultants don't realize they have leverage.   ....

especially true for H1Bs. Another reason companies love'em.

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Re: Non-compete agreements ?
« Reply #5 on: May 29, 2017, 06:56:28 AM »
I always read these things carefully. Often they are worded so that the "software industry" comprises their competitors. I reasonably insist that they amend it to say that in the event of termination for any reason whatsoever, I get full salary and benefits during the entire non-compete period so that I can support myself during the time I can't work due to their clause denying me the right to work in the only field I know.

At that point they either tighten up the clause significantly (for me this needs to be to the point it is a small list of specific named competitors), drop it, or refuse to negotiate. All these are acceptable outcomes to me.

I have this discussion often with other IT people and for some reason when I tell them the solution they say, "You can't do that" or "What if I don't get the job" or "It's probably not legal, I'll just ignore that clause" or other excuses. Many people in our field have absolutely no spine at all to push back against obvious problems in contracts and adopt a tactic of burying their head in the sand while hoping for the best.

Also, it's really helpful to have access to trusted qualified attorneys who understand these issues. You only need to see your guy once. If he's good he'll take 15 minutes scanning it and ticking all the big problems, he can do this fast since he's already seen every scam in the book and knows what to look for, then he'll say "Under absolutely no circumstances should you accept these specific clauses here in any form. And these other clauses need to be significantly amended before you can accept them." And then you can discuss the reasons why. After I did this a couple times I knew the tricks and what the problems were. If you have an attorney telling you "under absolutely no circumstances" it's easy to know you're right and stand your ground. It's also fun when he says "This is the most one-sided contract I've ever seen. You'd have to be an idiot to agree to any of this." Lawyers are very good at seeing the worse case scenarios that these clauses can lead to because they deal with the aftermath of those worse case scenarios in court on a regular basis. Worse case scenarios are pretty much the status quo when it comes to contracts.