Slashdot Mirror
Non-Competes Might Mean Loss Of Benefits
Skapare writes "WashTech is running a story about how having a non-compete agreement could cause loss of unemployment benefits. While non-compete agreements are addressed in unemployment benefits policies, it seems you still get shafted because it forces you to accept any employment outside your field, making it much harder to find work in your field. Personally, I think the employers with whom you have a non-compete agreement should be the ones paying you unemployment benefits."
but the last time a lawyer explained the non compete laws to me they were enforceable on a limited basis, with the limitations differing by state.
Non-competes are not enforceable in the state of California. It's perfectly legitimate for a company to demand you not divulge company secrets when you change jobs, but they can not prevent you from working in your field of expertise.
The last time an employment contract had a non-compete clause in it, I crossed it out and initialed it. I also told the HR person I had done so and explained that it wasn't enforceable in this state. It did not affect the hiring. Actually, at that point they couldn't refuse to hire me since they had already made the offer which I had accepted. If they had refused to hire me for my unwillingness to sign an unenforceable contract, they would have been open to all kinds of litigation.
-- Will program for bandwidth
Personally, I think the employers with whom you have a non-compete agreement should be the ones paying you unemployment benefits.
Companies in TX do pay for your unemployment benefits. I urge anybody who finds themselves laid off in Texas to file for unemployment, whether or not you need it. Your former employer's unemployment tax rate is based in part on unemployment claims received the prior year. Extended benefits result in chargebacks to the employer in the form of increased unemployment taxes for the following year.
Make those tax dollars work for you, and stop giving your former employers a free ride by refusing to file for unemployment.
This could actually work. "Accept" the job while refusing to sign the NCA. Keep a copy of your letter stating that you accept the offer in case your unemployment benefits are challenged, should it be the case they decline to employ you.
I've actually done that once on an indepdent contract. They wanted an NCA preventing me from working for any hosting company for a year. At the time, hosting companies were just starting on the scene, and that looked like a good field to work in. I simply explained that agreeing to that effectively agreed to be unemployed for a year for someone whose expertise was well focused on internet technology, and most ISPs were becoming hosting companies. I offered to agree not to take any customers with me to any new company (as if I could ... I don't work in sales).
now we need to go OSS in diesel cars
What the hell did the lawyer letters actually demand that you do? Or did you not even get that far before tossing them? If it was me, I'd have put them up on a website called www.${companyname}-wants-me-to-quit-my-job.com. Maybe you still can.
As for the legal fees, do check up on your credit report. If they have placed derogatory items on your credit report, then it may be time to sue them.
now we need to go OSS in diesel cars
Same in California, and for the rest of the country, I believe. I own a small business and I pay a percentage of each employee's gross up to a set amount, over which I don't pay anything. This comes out of my pocket, not the employee's. When someone files for unemployment, they draw against these contributions. If too many people draw unemployment, my percentages go up -- an incentive to keep people working, I guess.
So, to make a long story short. Employers DO pay unemployment. It's just filetered through the govt.
To keep this on topic - we don't do noncompetes for our employees, but I can see how the govt would get upset. They're paying unemployment for someone who has specifically agreed NOT to look for work in their field. Certainly not in the spirit of the law. Perhaps the unemployment should kick in when the non-compete expires.
Want to put non-competitive clause in my contract? Fine, but then I want you to pay me salary during the perioid.
That's what my work does. The contract I signed says that they're allowed to require me not to compete for as long as they like, but will pay me at the same salary for that period. The specific job description then states the default period that applies to my job (1 month).
Note: this payment only applies if they fire me. If I leave of my own free will they ask me to respect the agreement (though I think they note that it's probably not enforcable) and won't pay the period.
You've hit the nail on the head. As the story points out, many people find a job with a company directly, and then are pointed to the contract agency by the companies HR department. Not to be too cynical here, but MANY of these agencies exist simply to handle the paperwork and make it 'nice and legal' for companies to avoid paying benefits and dealing with the other headaches of having full-time employees in their production hierarchy.
Run! There's a lobster loose!
But don't ask your employer. Ask your own lawyer to get an answer in your best interest.
now we need to go OSS in diesel cars
That's what he did. By making a counter-offer, he's effectively turning down the offer. Perhaps you should direct your caustic remark to the other posters who sound like victims. I dislike those guys as much as you do and I think you're confusing the parent poster with one of those guys.
In California this is a right-to-work state so those non-compete's don't have any effect because you have to work to make a living and the only way to work is to practice your trade.
In the end, if it came down to it, and non-competes were enforced on everyone then only beginners who have never been in the field would be able to get a job.
I don't believe in breaking contracts but I do consult with a legal representative before signing my agreements (yeah, the $5k retainers suck)... in the end, non-completes and contracts that aren't nagotiable aren't legally binding. Anything I invent in my own time isn't theirs, either.
Of course, it's been attempting to claim something of mine I wrote they argued that because they were paying me a salary I was on their time. A few facts first... in California, unless you make about $100k you are not exempt from being paid overtime (you are not "salaried" so that argument didn't hold up well because I wasn't pre-approved for overtime when working at home or they refuse to pay me for all the hours I worked at home because for purposes of overtime pay, they don't recognize "what [I] do in [my] own spare time".
Next, it didn't hold up because I spent quite a sum of money on dev tools and support incidents at $245 a pop with MS and while they company was quick to point out that I was working on their time ("in the garage at my home") when asked if they would expense those expenses because it was "their time" they said what I do with my own money in my own time is not their responsibility.
Next when they were asked why they hired me they responded that they hired me because I have well established experience doing exactly what I do, and what I did for them. I didn't learn it on the job and I didn't pick up any secrets while working there. Further more, what I did in my own spare time didn't even relate to the company or any of my responsibilities at the company or any of anyone elses responsibilities at the company, they just wanted to tell me I couldn't publish an article in a magazine because of "that clause in the agreement". The judge dissagreed.
Next, they would not allow me to negatiate any of the terms of the "confidentiality agreement" concerning the matters listed above therefore the judge didn't think we entered into a legally binding agreement.
When they tried to argue that I "might" be divulging trade secrets by proposing the manuscript to the publisher (that contained working source-code of something fairly unique) they were asked to provide a copy that I signed that specifically told me what trade secrets and since I had never been told specifally what trade secrets (only that I may encounter trade secrets) the judge didn't think there was any stadning because how could I have known what trade secrets? in the end, there weren't any.
The list goes on. In the end, I've established legally with the company that I can do whatever I want in my own spare time as long as it isn't substantially similar to their interests but is also common in the trade if it is close to their interests (for example, all businesses need a contact manager, inventory, services, shipping & receiving system of one type or another but not all businesses are niche (where niche is substantially close to the companies interests)). I can work anywhere I want (even a direct competitor) when I leave -- in California and if I have come in contact with trade secrets, they have to notify my in writing of which so I can know)...
I'm still employed and doing fine at the company. I plan soon to start asserting my right to publish articles on advanced topics in my field of trade (I'm a programmer).
In the end, you cannot sign or agree to anything in these agreements that conflict with what rights you have under the law. It is worth it to consult with a legal rep. before you sign anything because you'll see just how weak (or strong) certain clauses in the agreements are (or aren't).
Thanks,
Leabre
IANAL, but I have this textbook concerning Finnish business law, which is written as a series of FAQ meant to be easily understood by small business owners and self-employed people. One point specifically deals with non-compete agreements:
- The total duration cannot ever exceed 1 year, under any circumstance.
- If the duration is 1 month or less, the employee is not entitled to any compensation.
- If the duration exceeds 1 month, the employer must continue paying the full salary and benefits until the non-compete agreement has expired.
IIRC other EU countries deal with this in a similar way.Software is not supposed to be about how to work around a useability issue. - Ken Barber
If you signed the non-compete out of CA, or if the company that you joined is based outside of California, the non-compete *may* be enforceable. From this web site:
Are you an employee considering leaving the company, or an ex-employee who has resigned or been fired? Did you sign a noncompete agreement while working in another state?
Did your employer have you sign any form of an employment, noncompete, nonsolicitation and/or nondisclosure agreement? Were you forced to sign it? Were you fired for not signing the agreement, or for protesting about it?
Does your employer appear "headquartered" out-of-state, or have you signed any employer document indicating the law of a state other than California applies to interpretation or enforcement of the document you signed?
Did you sell your business or interest [e.g., stock] in a company and execute a noncompete agreement as part of the transaction?
Has the employer or its lawyers threatened you with legal action for violating a noncompete?
If your answer is YES to any or all of these questions, you should IMMEDIATELY seek the advice of competent counsel experienced in noncompete battles. Even if you have not yet been threatened with legal action, talk to a lawyer so to determine your rights. Remember, the employer had lawyers prepare the noncompete agreement you signed, so you should have a lawyer too.
I think you're the one that's drinking some crazy kool-aid.
I know what I'm talking about firsthand, I live in Sweden, and I have recently developed a need for medical attention.
Europeans are healthier for a host of reasons, attitude, diet, and lifestyle come to mind. It has absolutely nothing to do with the absolutely god-awful excuses for health care services that prevail here however. Except, perhaps, in an indirect way - knowing that health care is so worthless here does give one a bit of an extra incentive to eat right and exercise more.
=-=-=-=-=-=-=-=-=-=-=-=-=-=-
Friends don't let friends enable ecmascript.
Actually, there's a problem here. America is technically a common-law country, and also has laws prohibiting ex-post-facto decisions. However, the way our government has behaving, it may as well be a written-law country.
What I am saying is that it is currently unenforceable. However, you need a specific judgement to get your contract in specific thrown out, and to go after a specific judgement, you need to challenge the company and get fired. May as well not sign, then. Without the specific judgement, if the country later changes its laws to say that it *is* enforceable, then you've just been sold up the river.
Further, the boss may have been truthful, in that the bank requires these agreements, then it is the bank that wants the slave-owners. It is also the bank that is slowly taking control of the company. So if that is so, then they clearly have more than enough assets to harrass ex-employees out of any useful labor. See some of the other posts in this line, and you will see that some of these companies really do use their contracts to violate the law.
It might be interesting to go into a class action lawsuit against all companies that require these NCAs, and -- where applicable -- specifically reflect the class action lawsuit to the banks, if the NCAs were required by the banks as terms of loan agreements, since the loans are often forced on the small business (that is, it is a case of take the loan, or get seized in foreclosure). But when I say interesting, I don't say good. Theft in response to theft doesn't really solve anything. It just makes the problems bigger and deeper. The best response may be to just start publicizing lists of slave-driving executives, unjust executives, and weak executives who don't protect their people. In other words, have a list of "who is currently being evil or weak". Then submit that list to Forbes magazine every year, as well.
That way, investors can stay away from companies driven by such leaders. Would that make sense to investors? I really think it would make sense to the smartest of them, since a business is properly viewed not as an investment, but as a reaction chamber that has to maintain 4 ingredients in a proper mixture: investors, workers, customers, and working fluid[$]. Destroy too much of one or another, and you have a business that cannot last.
Correct Horse Battery Staple: 72 bits of entropy. Enter "Correct H" into google. When it generates the phrase, that's
I lived in Japan for eight years, and I had universal health care the whole time.
;-) ). Could the ready availability of decent health care have something to do with this longevity in the face of excess? I think so.
What I observed during that time is that the high-end of medical care in the US is higher and better than that generally available in Japan, and hospital rooms are a lot posher (I was hospitalized for a week there once, and while it was rather spartan, it also cost me very little), the Japanese average is much closer, and the low-end is much, much better than the U.S. (where the low-end is people with no insurance and low income, who often can't afford much medical care and put it off until the emergency room is needed).
The Japanese universal health insurance system works like this: you have national health insurance. It may be the general public insurance type, or it may be the employer-paid type, depending on your job (full-time workers generally have the latter).
If you need medical care or dental, you go to the provider of your choice, so long as they take national health insurance (the great majority do) and pay the co-payment (30% for the fomer type, 10% for the latter type) and you are treated. No forms, no muss, no fuss.
How much you pay for insurance depends on your salary the year before, so if you're poor, that makes your health insurance nearly free (yes, there is an upper cap on premiums; having a good salary doesn't put the whole thing into health insurance).
Japanese national health insurance has something of a looming liquidity problem as a result of a rapidly aging population, but that doesn't detract from its effectiveness at getting people decent health care.
Japan has the longest life expectancy in the world, for both men and women, despite how much so many Japanese men drink, and despite how many of them are heavy smokers (most Japanese men smoke, as do an increasing number of Japanese women, and based on my observations, I'd guess that the average Japanese male smoker consumes at least a pack a day, and heavy drinking after work is quite common (commuting by train has its advantages
The bank just pays the employee not to work for a period of around three months, during which time they are not permitted to work anywhere else. This is referred to in the City as "Gardening Leave". Note, someone jumping ship may well have another place to go to, that is permitted. However, they can't start work until the end of the "gardening leave". Both sides understand that.
See my journal, I write things there
The first kind prevents you from working in your general field if doing so presents competition for your employer. This kind is very unethical and usually will not hold water in court. Some states, like Georgia, have specific laws making such agreements illegal and punishable by civil fines. Some people still sign them, but in general it is either illegal or at the very least not recognized by courts that one employer can prevent you from getting a job in the field in which you have your expertise.
The second kind prevents you from soliciting customers from your employer if you leave and go to work for a competitor. This type is ok as far as I can tell as it prevents companies from planting people in their competitors' companies just to steal customers.