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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?
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 At that point, they rescinded the job offer and I, of course, reported that I had had no job offers since technically I hadn't ;-)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
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!
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.