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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.
.
Want to put non-competitive clause in my contract? Fine, but then I want you to pay me salary during the perioid.
It has to be a balance in the system.
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?
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.
Personally, I think the employers with whom you have a non-compete agreement should be the ones paying you unemployment benefits
They may not be paying unemployment benefits, but they *do* provide compensation for the non-compete agreement. In the case of slave traders like these, the compensation is in the form of getting a job in the first place; in the case of other companies, people signing non-compete agreements are generally paid more than they would receive at a job which did not require such an agreement.
If you don't like the terms of employment offered, *don't accept them*.
Tarsnap: Online backups for the truly paranoid
I'm not allowed to sysadmin Windows 2000-through-2005, but haha they called it Windows XP.
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...
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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
...is higher unemployment insurance rates.
If a company has an employee sign a non-compete agreement, they are effectively limiting that employee's future prospects, and placing a heavier load on the unemployment insurer. Therefore the insurance company should monitor what non-compete agreements the company uses and charge the company accordingly.
As to Mr. Robb's dilemma, he did not receive a valid work offer (because of the agreement he was essentially "not qualified" for the job anyway) and therefore should not have needed to report the offer to the insurer.
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.
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...
One of the nice things about living in Nebraska.
Non-competes cannot keep you from working in the field, only from working directly for a competitor, provided you're working on *exactly* the same type of project.
As a widget developer, You can work for a competitor that develops gadgets, but not widgets.
Unemployment cannot deny you benifits as long as you make the required 2 contacts per week are actually "available" to work, and register with the state employment agency.
They *cannot* force you to accept employment for which you are not skilled.
Any fool can work on a garbage route(I've actually done it) but if it's not something you've *trained* for, or have prior experience in, they can't make you accept work in that field.
I was out of work for two months, and ran throuh all my computer related employments contacts within the first two weeks. On all my apps for crap jobs I was qualified for (like the garbage route) I stated I expected salary comensurate with my experience. I was making 36K when I got laid off, so that's what I wanted to work at the local Kwik Shop.
Just so you understand I wasn't milking the system, believe me I'd much rather work, all of the "prviously skilled" positions I was looking at all wanted my computer skills in addition to my "job related" skills. I'll work on the garbage route for $8.00 an hour, sure. You want me to fix your computers also? I get paid for those skills, and $8.00 an hour doesn't begin to cover it.
Just once, I'd like it if someone called me "Sir".
Without adding, "You're creating a scene."
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
You're right of course. Killing the economy is the domain of government, coporations, their boards and CEO's, not the common man.
Sigs are bad for your health.
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!
This article is so unbelieveably biased that I didn't even have to look at the source to realize that it was Union rag.
....Bethanie....
Note how it starts out by getting you all riled up about this poor guy's plight -- his role as the beleaguered sole supporter of his special-needs daughter and the hopelessness conundrum proposed by his circumstances. But if you read it thoroughly, you also see that he was completely vindicated by Excell, the Washington State Employment Security Department, and later, by Volt.
And then, of course, the article launches into the obligatory attack on Microsoft and its evil feudalistic business practices, because who doesn't hate MS, right?
Listen up, people. We live in a FREE country. You don't HAVE to sign a contract with an employment agency if you don't want to, and before you do, you'd sure as hell better read the fine print before you sign up! If they aren't making you a decent offer, then move on to the next agency!! Evaluate them as carefully as you would a prospective employer -- because, in effect, that is what they are.
The knowledge you have and the skills you can leverage are your currency in today's economy. When you accept a job or a contract with someone, it's because you are willing to provide what you know in exchange for what they offer you.
These businesses won't STAY in business for long if they can't recruit quality talent. Hell, if you're good enough, you can negotiate the damn non-compete out of your OWN contract!
Next time you read an article like this -- remember: Always consider the source!
Can't find the original story I read, but I remember that Lucent once tried to sue a number of former employees who left to join Cisco. IIRC the judge laughed the suit out of court partly due to the fact that he found Lucent's technology to be so far behind Cisco's at the time that he couldn't see any chance of Cisco actually being able to use any of Lucent's obsolete "secrets".
The best reference to the case I could find just mentions that the judge couldn't find any injury to Lucent but also that he found fault the management practices that caused them to leave in the first place. I'm not sure what happened on appeal.
My next sig will be ready soon, but friends can beat the rush!
didn't sign non-compete agreement with SCO. If so, you'd be required stay out of all companies in association with UNIX, Linux, and since Microsoft admitted UNIX licensing, Windows. Yes, that's basically the entire world, and that's what SCO is competing with. :)
And by the time SCO completed the world domination, you'd have to relocate to Mars.
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.
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!
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.
Actually, things like welfare and universal health coverage are good for the economy. The former does things like flatten out the business cycle by increasing spending counter-cyclicly (to people who will spend all the money on goods and services instead of saving it) and the latter reduces costs to the overall economy by improving health standards (it's cheaper to prevent illness than cure it)
But more importantly, they're a sign of a civilised society.
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My wife went straight from college to mothering, and has never worked, so has few job skills. The company for whom I work (who shall remain nameless) just sold my position to a contracting company, with one weeks' notice. Despite their company policy, they are not giving me any severance whatsoever if I don't take the job with the contractors. The contractors *require* a two-year NCA, and stated unequivocally that anyone who would not sign would lose their job immediately. The contracting company is *huge*, and it is quite likely that any potential job I get may conceivably compete with them somehow.
Did I mention that there aren't really any jobs out there right now? Do you think I'm in a position to fight the contract? No, I signed, and I will try to tough it out as best I can. If I have to leave (or get fired) from the contractor, I will get a new job as quietly as I can, not tell my former boss, and hope they don't notice.
The idea that everyone has free choice in signing contracts is foolish. The bottom line is that a disproportionate amount of power is placed in the hands of employers during hard economic times. They should not be able to do anything they chose because of that. The solution you propose -- which as I read it is pure Laissez-faire -- was more or less tried in the 19th century. It resulted in horrible abuses, and horrible conditions for working people. It resulted in the unlimited importation of cheap labor from foreign countries (every read "The Jungle"?) It resulted in 60 hour work-weeks for 12-year-old kids. All this was done as good examples of "free enterprise". It was in reaction to these conditions that labor unions were formed and fair labor practices laws were passed.
It is no coincidence that these abuses started at a time of great economic growth (the Industrial Revolution.) The laissez-faire approach might work in a smaller economy. However, the creation of shared-stock companies has the effect of watering down the process of making ethical decisions so that no one feels personally responsible. Instead, everyone operates on a scheme of plausible deniability. It is correct and appropriate in such cases for the government -- who created the shared stock company as a separate persona in its own right in the first place -- to take action to ensure just and moral practices.
"He who would learn astronomy, and other recondite arts, let him go elsewhere. " -- John Calvin, commenting on Genesis 1
Please think of this next Christmas when you're watching the Corporate News.
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".
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
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
No, it won't be good for either you or the economy. This is the broken window fallacy which says that somebody going around throwing rocks through windows helps the economy by increasing the business of window repairmen. The flaw is that it ignores that the money spent on repairs would otherwise have been put to more productive uses.
How to solve most of our problems: 1.Lots of nuclear plants. 2.Cure aging.
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.
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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
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.