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."
Dont sign the non-compete agreement. I've never had an employment offer widthdrawn because of it.
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I seem to recall reading a few years ago, during the boom, that "non-compete" clauses COULD NOT prevent you from taking a job for fear of getting sued. That they were basically bullshit, in fact. A whole "right to work" thing.
Anyone have the facts on this?
My wife (just graduated law school, yet to pass the bar) was leafing through an old non-compete of mine and was rolling on the floor due to the laughable language. Due to its ludicrous nature (and liberal use of the word "forever") she informed me that its 'bullshit' (I believe that is a technical law term).
;)
So non-comps are nice but their ability to prevent you from gainful employment is seriously questionable. I'm unaware of any case law regarding this; any lawyers out there care to school us?
Just bill the time to the "slashdot overhead" account!
In the future, I would want to not be isolated from my friends in the Space Station.
That's why I wonder about people who go with contract "employment" over the long term. It's an inherently unstable environment, that can get some decent $$$ in the short term, but over the long term requires tremendous discipline to maintain retirement savings, health insurance, etc. My first piece of advice to this guy would be to get a full-time job with benefits, even if its not a great tech job (if things are so precarious with caring for his daughter). Relative stability is worth something...
Stop by my site where I write about ERP systems & more
Generally speaking, I don't believe you have to take any position offered you. I was unemployed for five months and was offered a new position at an extremely lower wage than the position I had previously held. In order to circumvent the problem of either taking the job or losing my unemployment benefits, I called the company back and told them that my "requested salary" was much higher than what they were offering. At that point, they rescinded the job offer and I, of course, reported that I had had no job offers since technically I hadn't ;-)
All you have to do is make the company "aware" of something that makes you look unattractive for the current position. They'll rescind the job offer and you won't lose your benefits.
"It is seldom that liberty of any kind is lost all at once." -David Hume
I had to sign one of these to get a job.
When we both decided it was time for me to leave (They abused me, I bitched about it but they didn't like me bitching about them abusing me!) I was informed that I could not work in the only field I knew, computers, for 3 years.
I called "bullshit" on them and told them I would have another job doing the same thing before the day was out.
They told me if I did they would see me in court and would own my soul for life.
I was employed by another firm before the sun set that day and I called to tell the old firm to stuff it.
They sent me some nasty-grams and I tossed them in the circular file. Lawyers rang my phone for months and months on end and they mailed tons of nasty letters to me which I just ignored. Nothing ever came of it.
After a year they gave up.
Every once in a while I get a spurt of calls and nasty-grams from collection agencies, the law firms are STILL trying to stiff me for legal fees.
nasty-grams --> circular file
phone calls --> answering machine w/SIT tones....
Non-compete agreement, just don't sign it.
No one has the legal right to stop you from earning a living.
You can be sued six ways to Sunday and they may take the shirt off your back but they can't take the tools of your trade. To do so would be denying you the right to earn a living. Forcing someone to submit to a non-competition agreement is the same thing, it is tantamount to them taking the tools of your trade...
If you *MUST* sign one, just ignore it when you leave and go out and make a living. You do what you have to do stay alive. NO ONE has the right to stop you...
Non-compete agreements (NCA) are not necessarily bad, not all of them. If you are careful to read the details, and understand the real meaning of each sentence (i.e. don't be afraid to ask questions!), it's ok to sign NCA if it's not abusive.
I rememberd that I was once offered a job at a network security company, which required me to sign a background clearance agreement which stated that they can check every detail of my life, including all emails I've sent before, all news postings, all phone conversations, etc. Basically with one signature, I would have signed away my entire life's information. On top of that, I had to sign an NCA that said if I leave the company, I can't work in the computer security field for two years, or until their patents expire, or some BS like this. It was incredible. But the salary and benefits and stock options were all incredible too. I was making already 6-figures, and this gave me another 45% raise on top of my previous salary, plus stock options in the 6-figure range too. The offer was attracting, but I didn't sign the agreement. They were willing to modify the background checking requirements to my acceptance, but not the NCA. So I just turned it down.
Now that I've started my own software company, we also have a NCA, but it's very comprehensive. When an employee leaves the company, he can't compete directly in the exact same field, doing the exact same work, developing the exact same functionality. And that's only six months. He is not obviously barred from working in the same industry. Frankly, I don't know the legality of this agreement, but we do emphasize this aspect to new employees, as a precaution measure so that they understand the problems. One thing we want to achieve is to make our employees understand the ethical aspects of working in the hi-tech industry, and that's all.
ps: If I had accepted the offer I mentioned, I would be multi-millionaire by now, as the company had been acquired by a larger entity, and the stock options have been converted into the stock of that larger corporation. That's the price for sticking with your principles in life!
http://www.asktheheadhunter.com/crocs66nca.htm
" Signing non-compete agreements for fun and profit.
Companies love to have new hires sign non-compete agreements (NCA's), whereby the employee agrees that if and when he leaves the company, he will not join a competitor or compete with the company for a prescribed period of time. The prospect of signing an NCA worries most people, and it should. An NCA can prevent you from working in your field and it can cost you a lot of money in lost income.
There are many tactics you can use to limit the effects of an NCA, including restricting the time period and the geographic area to which it applies. But, I've got a better approach that startles most companies. Try it when you negotiate your next NCA.
Recognize that signing an NCA costs you money and confers a benefit on the company. For the deal to be fair, the NCA should cost the company money, too, and it should confer a benefit on you.
If a company wants to restrict your ability to earn a living, it should give you something in return: a guaranteed severance package for the term of the NCA, to tide you over while you're out of work and not competing. The severance should be yoked to the terms of the NCA. That is, if the NCA applies whether you quit or are fired, then the severance should be paid in either case. This is a deal that shows good faith when the company hires you.
It's no fun to be left holding the bag when you leave your job. If a company wants to lock you out of the market, it must compensate you for it. What I'm suggesting is a win-win approach to NCA's that forces the employer to put some skin in the game. When it has to pay for the benefit of an NCA, an employer will think carefully before asking you to sign one.
Let's make sure there's fun and profit for everyone in NCA's."
Non-compete clauses are generally unenforceable in CA, as they are considered to violate the public policy of allowing one to work in his/her profession, and recognizing the (obvious) reality that employees are not able to bargain on equal terms with employers. This is not the case if you are a corporate officer selling a business.
There was a very neat recent case with an out of state (non-CA resident) employee, employed as a telecomuter by a CA firm, who got a CA court to issue an order that his/her non-compete, while valid where it was signed and where the employee lives, was against CA law and therefore not enforceable in the employee's home state. A ruling by a CA court (or any other court) is enforceable nationwide (under the full faith and credit clause of the US constitution), and thus binding on his former (asshole) employer. I hear that CA courts may be easing up on this stuff for out of state employee-employers, but you have gotta love the intent.
Yes, I am a lawyer.
Whether or not non-competes hold any legal water, you still have to be able to fight them in court if your ex company tries to persue it. And, in order to effectively fight, you have to have money and time. But, if you're out of a job, you're probably not in the best position to fight anything. And, if you are willing to fight, odds are that the case will be dragged out for months or even years while they bury you in paper work (BTW, IANAL. insert more anoying acronyms here, etc. etc.)
I just went through this situation last year when I was looking at switching jobs. It ended up not being an issue, but the prospect of having to deal with it in court was just a little unnerving. It's not enough to be right. Unfortunately, you have to have enough money and time to prove you're right in court. And, a private citizen just doesn't have to resources a corporation has.
So, needless to say, with my last job hunt I learned from my mistakes. When one of the companies I was interviewing with gave me an offer and asked me to sign a non-compete, I turned it back on them. They wanted all these things including 3 weeks notice before leaving. And, if they couldn't find a replacement for me in those 3 weeks, I had to pay their lost consulting revenue until they found one - or I could stay on until they found someone. So, I told them that I wanted 3 weeks notice before layoffs, firings, or any other termination of employment, and if I couldn't find a job in those 3 weeks, I wanted paid until I could find a replacement position. I didn't wait for their answer and just took another offering, but I wonder what they would have said. It's really not a great IT job market to be negotiating these sorts of things.
has a "right to work" law. It basically states that you as an individual have a right to work. If a company has made you sign a non-compete, they can not force you not to work. They can either pay your salary until the clause is over, or let you go. You just can't use proprietary information from the old in the new.
While working as a contractor at Ford, a new form appeared one day that I was required to sign. It was an addendum to the contractor agreement which covered all intellecutal property either real or imagined. It also stated that Ford had ownership any thoughts I might have while at work or off hours. It was unbelievable.
After months worth of managers badgering me to fill out the form, I signed it "Mickey Mouse" and returned it.
IANAL, but if you don't sign using your real name is the document legal? Your honor, exhibit A. An Intellectual Property agreement signed by Mickey Mouse? Huh? What?
Also, I learned that even if you do spend $$$ on a lawyer then go to court and get a judgement in your favor, it can be nearly impossible to collect and you are out lawyer fees. Let an exemployer sue me and a non-compete. I won't even show up. They can get a summary judgement and try to collect.
Also, it is a good idea not to tell a current employer why you are quitting or where you are planning to work next. The less information anyone has the better off you are.
IMHO when an employer stops paying me, all agreements with them are null and void. However, if I run off with trade secrets or proprietary info then that's a different matter, but I believe we already have "corporate espionage" laws which cover this.
I am not sure what is going to kill America first, "stupid people" or "lawyers".
My brother lost his job over not signing a non-compete. He was in the middle of developing a new product line for the company, and they said "well, finish up the development first", and he did. It was a new technology for the company, too: sending data over the power lines.
Then he was let go.
He explained not signing by pointing out that (1) the agreement was not legal [there were clauses in it that would never be upheld in court, including not working in any competing field for 10 years, including any field that the company later got into], enslaving, and wrong.
The company explained it by saying that getting their bank loans renewed depended on them getting all employees to sign these agreements. True or not, I do know that the company was in some level of loan trouble -- so I do consider it possible.
Anyone else know for sure?
Correct Horse Battery Staple: 72 bits of entropy. Enter "Correct H" into google. When it generates the phrase, that's
Well, I certainly didn't mean to be foolish. And I sincerely feel for your difficult situation. In the same position, I'm not sure what I would do.
....Bethanie....
I also agree that the Unions served an important function in the post-industrial economy to protect laborers from unfair business practices, and perhaps even continue to do so, to some extent.
That said, I don't believe that Unions are without their own flaws. One of those flaws is what my original post was based on, and that is that they use yellow "journalism" like that employed in this particular article to sway readers to their side of the argument, which really isn't much of an argument except for a typically whiny, "That's not fair!".
I fail to see (and perhaps you can be of use in educating me) how Unions can provide a viable solution to workers caught in the undertow of our weakened economy. The truth is, times are tough all over, and it's part of the ebb and flow of life that we are faced with these challenges. Are you really sure that whatever "solution" the Unions provide is one that you want to be stuck with when things take a turn for the better? Personally, I *do* prefer to let things work themselves out on the free market -- the best laws are the natural ones, like that of supply and demand.
I look forward to what I am sure will be a very enlightening response!
Straight from my lawyer: If you live in a "Right to Work" state, your non-compete is probably worth zilch to your employer (or former employer), other than as a scare tactic.
I left a company a couple of years ago in a right to work state. They sent me a letter after I left, stating I could not do web development in the region the company operated (I had been a wev developer for them). However, after a call from my lawyer to their lawyer, they backed off fast. Even their lawyer wouldn't back there play!
Check the laws in your state.
Great ideas often receive violent opposition from mediocre minds. - Albert Einstein
Are you assuming this is true? Or did you actually speak to a lawyer to find out if this was indeed true? If it were me, I'd go to the nearest law school or I'd contact my local Bar association and ask for a cheap referral.
Assuming this is false, then you could anonymously let all your coworkers know about it and see what happens.
However, it was my intention to illustrate that we as individuals sometimes find ourselves in untenable financial situations. And because of the hiring practices of many companies in our industry we are left between the proverbial "rock and a hard place". Granted, this is sometimes due to our own financial incompetence, but often it is due to circumstances outside of our control. And while you are correct that unionization may not be the answer to the problems introduced by these employment practices, it might be.
If we as sys admins, coders, and network engineers can help each other by bargaining collectively, why not? And I'm serious here. I would like to know what folks on Slashdot feel is the down side on this one? I know there are many potential pitfalls, but do we really think that there is no possible way to perform collective bargaining and have a positive outcome for those of us "in the trenches"?
Run! There's a lobster loose!
I know, it's hard in this George Bush II burger flip economy
GWB's administration did not create this bad ecomony, he inherited it. Go study economics at a college level and you'll find that in the US there's about a 8-12 month lag from an economic turning point and the nationwide fallout from that turning point.
The turning point in this case was the last burst of accelerated Y2K business preparations followed by the abrupt cessation of abnormally high business activity after everyone discovered that Y2K was not such a big deal after all in terms of how it affected business ops.
Not at all.
This is 'good for the economy' in the same way that eating a big bag of sugar is good for your body. Yes, it can produce a short term energetic boost, but only at the expense of longterm well-being.
Again untrue. In fact it does exactly the opposite. By decoupling the decision to consume from the obligation to pay, these schemes explicitly destroy the mechanisms which previously kept cost low and quality high, and have resulted in skyrocketing health care costs.
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Friends don't let friends enable ecmascript.
I have a NCA in my contract too, but in Belgium the law has placed some reasonable limits on it.
1. The duration of any NCA is limited to 1 year.
2. It cannot be overly broad.
3. It only applies if the employee takes the initiative to leave the company.
4. When the employee leaves, the company has 2 weeks to tell him whether they want to enforce it or not
5. If the company chooses to enforce the NCA, they have to pay the employee his full salary for half of the duration of the NCA, so if you're under NCA for 1 year, they have to pay you 6 months worth of salary.
6. In case of a suspected violation of the NCA, the burden of proof is on the company to show that they actually suffered damages. Courts tend to side with the employee on these matters.
So despite what many Americans think, there really are some benefits of having a socialist government.
- Limited in time
- Limited in geographical area
- Financially backed by the ex-employer
I believe most EU countries have such a system. That reequilibrates the power between big contracting companies owning all jobs of a kind in a region, and potential employees - esp. in tough times.There are a lot more protections against these sort of sharp practices in Europe.
;-)
A few years back I had a contract finish up due to the company having some financial problems. I was in the middle of a large project for one of their clients who was not impressed to be faced with a junior developer trying to finish off the project. I was approached about working for them directly, and discussed this with the agency my old contract had been through. I was assured there were no problems/obstacles.
Well, I figured what the hell! Cut the agency too. I found the work (well, it found me), and they weren't prepared to handle the contract on a cut rate so I went direct.
The agency ignored this, but the company I'd been working for earlier was furious. I got a stinking letter from their Financial Director threatening all sorts of legal action, accusing me of breach of contract, etc., etc.
Of course, I'd never worked for them. I'd worked for the agency, and they wanted nothing to do with it. A brief chat with my lawyer resulted in the following "fun" legalese...
"... I have to reiterate that no contractual relationship exists, or ever existed between us.
Furthermore, I have to note that the non-competition clause in the non-applicable contract you refer to is in conflict with art. 85 EC Treaty 25/03/1957 and is therefore null and void. Secondly, this clause brings an inequality between parties and increases the obligations and duties of one party in such a manner that there exists an unacceptable misbalance between the duties and obligations of the two contract parties and is therefore null and void. "
They didn't bother me no more.
Tech workers should have unionized against this type of abuse ages ago. Even if the company goes ahead and hires a bunch of desperate scabs to break your strike, you've now got a powerful political lobby to fight off the lies of the IEEE (tech worker shortage, my ass) and get NCAs made illegal, if not nationally then do it state by state.
Not necessarily. Perhaps the repairman is far more likely to utilize that same money for more productive uses than the previous owner...
People replying to my sig annoy me. That's why I change it all the time.
If you read the article, you'll see that section six says:
What this is supposed to do is allow Volt to regain their investment in dealing with your resume, interviews, payroll, etc. by preventing companies from putting out week-long or two-week long contracts to see if they like you.
It's also designed to prevent other temp agencies from using Volt's temps as a pool of resources for future contracts.
The fact that somebody from MS called some company and said "I want him" pretty much means that Volt should get stuffed (IANAL, YMMV, YRANA, etc.)
This whole thing might have been avoided if Doug had called the MS guy back up and said, "call Volt". Then again, maybe not.
The fact that the Volt people are willing to engage in harassment and criminally coercive actions just means that I'll never be working for them again.
Karma: Food Fight (Mostly affected by Date Plate).
Non-competes are unenforcable and to date (as far as I know) have NEVER gone to court. Microsoft has bullied people with their non-compete clause and forced people to fire their Microsoft employees. And when I worked at Amazon, they made me sign a 10 year non-compete.
Non-competes are inherently non-enforcable because they make it impossible for alot of people to find work in their field. True some people can go on to find work if their jobs were not specific in nature but for those whose jobs WERE specific to the company , a non-compete clause puts them out of work and keeps them out of work making it illegal.
I am honestly surprised that no one has ever challenged them to date.
This is my sig. There are many like it but this one is mine.