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Modifying Employment Agreements?
An anonymous reader asks: "I am starting a new job, after months of unemployment. While out of work, I started a technology related business. I do not believe there is a conflict in the services provided by this business and the job I am taking.
As has been standard with previous employers, I have been asked to sign an agreement that states in part that I am to disclose to the company anything that I create wether or not during company time, and wether or not it relates to the company.
I also must agree that these same creations or inventions become the sole property of the company. I would like to change the wording to only include those creations, inventions and other Intellectual Property that is the direct result of work performed for the company, involved use of company property, and/or was created or invented during paid hours spent working for the company.
What success or failure have other Slashdot readers had when dealing with wide reaching employment agreements such as this? How did you approach management with your modifications?"
yeah, yeah, nobody likes dealing with lawyers. but trying to fudge a contract by yourself is a foolish proposition, especially an NDA. and you can guarantee that a) your employer will freak out initially -- they don't like ANYONE touching their NDAs and jeopardizing their precious IP and b) you'll probably screw up the wording and their legal team will reject your changes on that basis alone.
and if things you develop outside of work really matter to you, and you plan on developing something significant, it's worth the couple grand to get solid advice and contractual clauses that will hold up in a lawsuit. it makes sense and is worth the one time cost to protect yourself and your intellectual assets just like you'd insure your car or house in case of some unlikely disaster.
in fact, i'd ALWAYS recommend having a lawyer review any employment contract before signing, just in case. some clauses in employment contracts can be pretty sneaky or draconian but sadly most people just gloss over them and look where to sign.
i'm not a lawyer but am damn happy that i had one look over/amend my employment contracts before signing.
hope this helps.
-fren
"Where are we going, and why am I in this handbasket?"
Regardless of whatever advice pops up in this thread, though, the one thing that you absolutely, positively must do is consult a lawyer. Take the tips you pick up here and run it past said lawyer; they'll advise you as to whether or not they'll work and will convert the advice into legalese for you. If you can't afford a lawyer, track down the family member/friend that is a lawyer and ask/beg for their help.
Employment contracts are very, very important things that businesses take seriously. If you're not careful, you'll put yourself in a position where you could be sued without even realizing you'd done so, which is doubleplusungood. Get a lawyer to help mitigate this risk.
Assume that you're just as good at revising some lawyer's contract as you'd expect that lawyer to be at revising your code. Act accordingly.
Obliteracy: Words with explosions
You didn't cash on unemployment checks while you started this business, did you?
Sounds like they're going to have an opening.
First, it's going to be rather clear that your company was not created during your employment with this new employer. Afterall, it exists now and you haven't started there.
I'd expect that your new employer should already know of your personal business because it should be listed on your resume. Therefore, when they ask you to sign a contract saying that everything you create belongs to the company, you should ask for a specific rider that acknowledges that you have the outside interest, and that the company is aquiring no rights to that property. In exchange, you'll offer to promise that you will not work on that project while on company time or using company resources without permission. You can frame it in the terms of a disclosure as required by their contract of something you have created and will continue to create that has no relation to the company.
If the company thinks that just putting you on salary means they own your mind 24/7, then you likely don't want to accept their offer anyway. Unless you've omitted all mention of this project on you resume, they should have known you have it and intend to keep it. If they think by hiring you they're going get ownership of your small company...
Oh, and since the company no doubt had a lawyer create the agreement they're asking you to sign, you should have a lawyer create the document you're going to ask them to sign...
You could just teach them the error of their over-litigious ways by giving them the "rights" to the next thing you "create" after some cheap mexican food and seven cups of coffee.
When I just started a new job (simillary after being "excessed" from my previous company), the agreement I was offered clearly asked me only to identify things which relate to the companies business. That may be a California thing -- I think California restricts the claim a company can lay to it's employee's ideas.
But at any rate, there are companies which will agree to what you wish to ask.
dsojourner
and a pony.... I want a pony as well. I think you are about as likely to get a pony as you are to get a change in the standard employment agreement.
I was hired on at a place a few years back while I was in the middle of developing my own software product, and found that the hiring/HR staff were quite open to adding an exception for the program I was working on to the contract. Granted, that's not as free as what you're talking about, but they raised no objections. If you have the skills that they want, most employers are fairly open when it comes to stuff like that, as long as you're not dealing with lawyers in the negotiation process.
The question I would be asking is how would the react if you asked them to change it? Custom-tailoring an NDA to you raises a lot of issues that an employer doesn't want to deal with. It sets a precedent that they probably don't want to deal with either. Would it just be easier for them to find someone else to fill the spot then to bend over backwards to curtail your needs?
IANAL, etc. The point is that you need a lawyer. This stuff varies by state.
I've done this several times now, with large employers and small, and never had a problem. Of course, if your situation allows, getting a lawyer to assist you is not a bad idea. But I usually just mark up the text of the agreement (you can usually get the meaning that you want by removing a couple words, making the changes minimal), initial the changes and sign the document, make a copy for my own records, and send it in.
Generally, all I do is delete a word or two to change it from saying that they get the rights to everything, regardless of whether or not it was on company time or company equipment, to saying that they get the rights only if it was on company time or equipment.
-Todd
"The details of my life are quite inconsequential..."
I have changed a couple. Tell them what you are changing and why, don't just change it, sign it and turn it in. If you talk to your future boss about it, they usually understand and can talk to HR about it and HR won't normally want to fight with another department about it.
As long as you don't add so much that the HR people think they have to consult the company attorney, they will just ok it. Consulting the attorney means work for them, so they won't want to do it, and as long as you keep it short they won't care. They just want all their paperwork back.
<high-level position here>
<name of stupid small company here>
When faced with the same situation about 5 years ago, I simply said "I'm not going to sign this".
I then had a talk with our human resources person and explained why I didn't want to sign it. The company then worked with me to come up with a mutually acceptable employee agreement.
Obviously this might not work at every company, but it won't hurt to ask.
well,
in my case it was pretty straight forward
when the company asked me to sign such an agreement I just asked for the changes arguing that I am a associate researcher at a local federal universisty and that my research has nothing to do with the knowledge i use at the company and they happly made the requested changes.
I don't know if that would go so well if my other tie were with a regular company. But I have my publications and even software developed outside the company.
-- SouNerd.com
My pal Burk, when confronted with the very same problem, simply did not sign the form, tucked it back into the enormous pile of junk he had to fill out when starting at this company, and just didn't mention it. They apparently didn't check to see if he had, because they never said anything about it. If a problem ever came up, he figured he'd ask them to produce the agreement, and point out that he he had never signed. It's a shame it never came up - I really wanted to see what would happen...
There is no God, and Dirac is his prophet.
My situation's probably a little different, since I wasn't just hired at a new company exactly. The company took over a contract from my former employer, so I was probably in a better position to have some leverage.
Anyway, I'm involved in an open source project that doesn't relate to what I do at work at all, and there's no reason to believe they'd want to screw me, but I figured it was better to be safe. So after talking to the local HR guy, I wrote up a letter describing what it is I'm doing, what parts of the IP agreemenet bothered me, and what I wanted to be exempt from. The company ethics board reviewed it, saw no conflict, and gave me back a memo acknowledging my letter and stating their acceptance of my terms.
I didn't make a big deal of it, but it did throw the local HR people off a bit. They're not used to anyone questioning policy, but I explained the situation and they were understanding.
Now if I could just get someone to give me the diffs between the new ethics manual they just sent out and the old one, and tell me why it's so imperative we sign off on this one, I'd be happy...
I was in a similar situation to what the original poster has mentioned, I had a written contract that the employer wanted signed that didn't fit with my expectations. I did what was suggested by the parent, and hired a lawyer to do the changes.
The problem was, the lawyer took one look at the contract and saw other points in the contract that needed to be changed, like getting paid for holidays in addition to the time worked and being able to book vacation periods at a reasonable time. A lot of work needed to be done to bring this all into line.
By the time I took the changed contract back to the employer and had them look at it, the employer decided that it wasn't worth it to sign a non-standard contract. In the end, the employer and I were not able to agree on this and other issues, so the contract was left unsigned.
As the parent notes, the situation is that when a change like this is proposed, there is always a backlash from the employer. But there are good reasons for this, since there are a number of issues that are raised. One, for example, is that if you were given the right to work with your own projects outside of work, then others may want the same privilege as well. Also, others may want to have other changes to the contract as well, and they will point to you as the precedent for this.
So I guess the bottom line of this is that to hire a lawyer to work with you on the contract is a good piece of advice, but keep in mind that you may not like the results.
These are the good old days you'll be telling your children about. Make them worthwhile.
I am a boss. I hire people. It doesn't matter to me. In this case, if I knew the NDA was particularly draconian as this one appears, I would probably favor the person who recognizes the fault and attempts to have it corrected. There is nothing wrong with it. After all, if you don't stand up for yourself nobody else will.
Some companies appreciate your taking the time to negotiate and read through all parts of the employment agreement. It shows that you are actively engaged in the process.
I've actually had companies make major changes to their non-compete and non-disclosure agreements after my review of the forms. It probably depends on the firm and the lifecycle of the firm. I've worked in a few companies where the corporate lawyer was thrilled to sit down with an employee and talk seriously about the contract.
Conversely, if the hr clerk, or whoever you talk to, feel they have no control, they will resent what you are doing.
What I have done at several jobs was look at the contract, then just strike out with a pen the portions I did not agree with, along with initialing the strike outs, then making sure to get a copy of this modified contract.
I've found that often, HR people are too busy/lazy to scrutizie their forms to see if you've modified it in any way, thus it can slip through.
--- It's not my fault this post looks redundant. I just type too slow.
Especially if you want to continue to run your business on the side. Most employers take a dim view on that and their contracts may reflect that view. Have a lawyer check the contract, both for IP ownership-related issues, and how the contract affects your current business activities.
Don't be afraid to suggest and negotiate changes to your contract. They prefer that you sign the default one, since any changes will probably have to be okay'd by their lawyer, but if they really want you they might be amendable. I've never signed an employment contract without having made some changes first... incidentally, I made the changes myself, but had them checked by a lawyer afterwards.
Oh and don't fall for the old traps, like "We just want you to sign the standard contract; company policy, you know? Of course we don't actually enforce this". Or the rather popular "Don't you trust us?". You're entering into a business agreement; if you rely on trust, it''ll probably come back to bite you one day.
If construction was anything like programming, an incorrectly fitted lock would bring down the entire building...
I had a few attorneys to look over it and generally speaking it's wasn't that expensive to do so. My company wanted me to disclose and list all the IP that I had before signing the thing. The idea being that anything I came up with after that belonged to them even if I thought of it at 3am.
I declined to sign it period. Two attorneys told me that these things never stand up in court and I mentioned that to my company's legal department. They didn't push the issue and I never signed anything. They are intended generally to send a shudder down your spine. I didn't sign it because if I know they don't stand up in court and the company knows it, what's the point?
However what I did start doing after that was copyrighting programs that I thought may be potentially valuable. I do a lot of programming of perl apps and have taken to copyrighting all of the valuable ones.
Does my company have a right to those apps? I don't think so, they can't produce a signed NDA.
I have been asked to sign an agreement that states in part that I am to disclose to the company anything that I create wether or not during company time, and wether or not it relates to the company. I also must agree that these same creations or inventions become the sole property of the company.
This is typical for any technical employee.
I would like to change the wording to only include those creations, inventions and other Intellectual Property that is the direct result of work performed for the company, involved use of company property, and/or was created or invented during paid hours spen working for the company.
If you're salaried you won't get that, period. Salaried employees who are paid to think do not have limited thinking-hours.
Salaried employees are also normally expected to have no outside work to compete for their time and attention, and this will be in the contract as well.
What you MIGHT get is explicit acknowledgement of, and permission to continue, your existing business. IP related to it is another matter.
In Claifornia, state law makes an explicit limit on inventions, something like this. If:
- You didn't use company property, facilities, materials.
- You didn't invent it on company site.
- You didn't do it during normal working hours.
- It's not derivative of proprietary information (company secrets or other company's secrets made available to you through the company's alliances and under non-disclosure),
- (and the biggie): It's not something in any of the company's own business lines or contemplated business lines.
then it's yours.
(IMHO this is THE reason high-tek is clustered in silicon valley: If you invent something outside your company's immediage and near-future plans you can drop out, create a new startup, and develop it.)
If you're not in CA, and they want you bad enough, they might be willing to include the language of the CA law as an amendment to the contract.
Regardless of whether you're in CA or not, be sure to:
- Report any inventions you've ALREADY made (with enough description to identify them but not enough to give away the farm) in the form provided, to be sure they don't try to claim those later.
- If you intend to continue your outside business, get permission added to the contract as an amendment. (You'll almost certainly have to put limits on it, too.)
- And if you can't get the CA-style exception, but DO get permission to continue the outside business, get an IP exception giving you your outside-biz IP, and drawing a clear line on which ideas are yours and which are the company's.
Recognize that, while you and they can agree on riders, and some companies WILL do that, riders like this decrease your value and increase your cost to the company. If you go too far, even if the company is willing to flex, you'll price yoursef above some other applicant and remain unemployed. You need to get a good read on the company's politics to guess how far to push, and be prepared to be dumped if you goof and push too hard.
Legal disclaimer: IANAL, your mileage may vary, etc.
Bantam Dominique roosters crow a four-note song. Once you've heard it as "Happy BIRTHday" you can't NOT hear it that way
I've heard of several cases where the employee developed something on his own time, using his own equipment, and found that when he started making money at it, the company claimed it as theirs.
I wouldn't trust any "unspoken agreement".
here tested it this time, sorry
Creationists are a lot like zombies. Slow, but powerful and numerous. And they all want to eat our brains.
One of the most valuable services that lawyers provide, in addition to sound legal advice, is shielding you from being the bad guy. Instead of having to argue with your new employer, you can be the nice guy, while deferring to your lawyer's judgment:
Then when you return to discuss the we-own-all-your-IP clause, you're not the bad guy: See? Now you're a great position. You've been nothing but reasonable. If the company doesn't want to make the change, they're the bad guys. They will look like they want to lay claim to all of your work while paying for just a portion of it. You'll be in a great position to argue for your change or, better yet, have your attorney do it for you.Attorneys are essential for this kind of thing. Use them for their legal advice, and use them to keep yourself above the fray.
Easy, automatic testing for Perl.
I have had good luck modifying such contracts and getting the bogus stuff removed or reworked.
A few points - first hire a lawyer - it will cost you a few bucks, but should be less than $200. Go over it with them and do not mention the lawyer to your potential employer.
Once you sat down with the lawyer and reviewed the document in person with them you have a shopping list of things you want to change. Then set up a meeting with the HR person or boss or whoever will have the authority to make the changes on the company side.
In the past I have explained about having a friend who got burned by a over reaching contract such as this. The company went under and the bankruptcy lawyers were trying to lay their hands on anything of value including the friends open-source project. Of course once they got hold of the source it was worthless as it was only of value when it was freely given away. So in the end no-one won anything. Once you've given this kind of little story they are more sympathetic to how you just want to CYA and prevent any potential future uglyness just as they want to cover their assets and prevent any future problems.
In some (several) states, agreements that attempt to get your work even in out of company time and property are illegal - but that doesn't stop lawyers from using the broadest language possible because they know that it will just get narrowed down to what the law allows. Unless there was "willful" over-reaching (i.e. something almost impossible to prove for a reasonable amount of money) the court wouldn't throw out the whole ageeement because of it.
One other thing to watch out for is some language to the effect that the contract should not be construed as being drafted by either party. I forget the term, but there is a legal idea that in the case of ambigious language the interpretation goes against the person who drafted the contract. This way the drafter shouldn't purposefully put in ambigious terms. And - it is assumed that the person writing the contract is probably a lawyer and has better knowledge too. By putting in a clause that the contract is assumed to not be drafted by either party they tip the scales back so that anything ambigious is to be weighed based on other terms, not against the company.
Good luck!
They'll work with you to settle the disagreement in wording until both sides are happy. This happens more often than people think.
Not strictly true by any means. I'm salried but I can have activities outside my work if I want. There is reporting to do, but they don't claim to own anything I do. They just want documentation so if it becomes an issue they have documentation and can apply the boot.
It is worth noting I work for a large state-run university.
Slashdot Patriotism: We Support our Dupes!
What state are you in? If you're in California, state law trumps those sorts of contracts to some degree - see California Labor Code 2870.
Also, on every contract I've ever been presented with, the was a section for exempted works - depending on the type of company you run you may simply be able to exempt the entire subject area of that company and be fine.
A lawyer will know what's applicable to your state - consulting one wouldn't be a bad idea as many people recommend. However, it's not always necessary if you know what you want and can negotiate well. You can look up your state's labor and intellectual property statutes online. Negotiation is typically give and take though - you may have to trade some things to get what you want.
In my case, negotiations took almost a month but I won 75% telecommute, ownership of all of the code I wrote on the side that was unrelated to the company's business, and the highest salary on the team (considerably more than the initial offer). I was asked to run any industry-related works (e.g. music) I wrote outside of work by upper management for approval before release - which I did, and they were very reasonable about it.
Of course, when the company came on hard times financially and brought in new management to reduce costs and get the VC's off their backs, that meant I was on the short list for downsizing - despite averaging 60+ hour weeks for over 2 years of service, receiving heavy praise on every review, and receiving pretty awards for the quality of my work.
Ah well... It was nice while it lasted.
Anyone need an old coder?
I write code.
"The initial OSDA Initiative resources are a group of documents providing suggested variations to employment contracts that would allow employees to develop Open Source software without encumbrance from their employer, where there is no conflict of interest."
http://www.sage-au.org.au/osda/