It’s hard to believe anyone would turn down a 6 figure job because of a non-compete or ownership agreement, but that’s exactly what I have done 6 times before finally accepting a job at a much more reasonable company.
This article is about non-competes and property ownership agreements and the damages that can happen to you because of them.
I’ll start by introducing a very interesting legal dilemma, one where you pay a company to sue yourself because you used your own personal code to benefit your employer; yep, that’s a real scenario and possible that it will occur to you because three sneaky caluses–
- The attorneys’ fees clause states that you will pay all their legal fees to go after you for any violation of the agreement(notice it has the ‘ after the s because they can pay multiple to sue you) .
- The property ownership clause says they own all code you work on while employed, and all code you bring to the company regardless of prior ownership. So by combining them they are incentivized to frivolously sue you! The company will tell you that the contract doesn’t mean that but then they will not put that statement in writing.
- The complete agreement clause states no verbal or email discussion are part of the agreement. So even though they promise the contract is harmless, they aren’t actually making any promise at all because you can’t sue them for misrepresenting the agreement. DON’T sign something you don’t agree with. My question is, why don’t they have irrevocable usage instead…?(Also the complete agreement clause isn’t a bad thing as long as the rest of the contracts acceptable, the main reason to worry about it is they can legally misrepresent information to you and claim that it’s not admissible).
So now I’ll explain why I wont sign them:
- Companies are already protected from confidentiality agreements, and non-disclosures they protect business secrets making non-competes and over-extending property ownership agreements not needed.
- According to the agreement they legally own important property of your start-ups written during employment; this is ridiculous to think that they can sue your own companies when your companies are charitably giving them code. Per their claims, sure maybe the state will protect you, but why would you sign something that states exactly that? Why not write the agreement to say what they “mean” instead?
- They have a incoherent argument: When it comes to top talent, if you are really the risk they claim you are in the agreement, then why shouldn’t you start up a competitive company instead of working for them? If they don’t think you’re a risk why do they require you sign that garbage? It’s a logical paradox and makes no sense (Remember the non-disclosure and confidentiality agreement still protect them regardless).
- It reduces your marketability, why should you work at a company just because of a legal document, it reduces your potential value because a competitor might be willing to pay more and if they were– your company would be willing to match the pay. But your agreement puts you into slavery and prevents that.
- You still can’t work at a competitor for a year, even if your crap and they fire you (I’ve always believed this is the most bs legal ruling there is).
- Top talent will not sign these agreements, if companies want to continue to hire unqualified employees that will gullibly sign the documents they are free to, but the truely talent workers that revolutionize the industries won’t sign them
Also, I find it ironic that the same lawyers stating that companies should require non-competes have legally exempted themself from non-competes; that’s a fun question to ask them at the bar if you want some entertainment.
Please note that this article is my opinion and that I am not an attorney and make no such claims of the validity of any part of this article, it is intended to represent my opinion and understanding of what to me the agreements clearly state.