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Non-Compete Agreement Beyond Term of Employment?
stellar7 writes "I work in IT for a large company. They have recently asked me to sign a new non-compete and confidentiality agreement. I signed an agreement when I began employment, but now they want me to sign an updated one. Behind the link are a few paragraphs from the new agreement. It states that the company has a royalty-free license to any 'Invention' I create including up to six months after leaving (and the company fully owns any Invention that relates to the company in this same period). Has anyone signed a similar agreement that reaches beyond the end of employment and includes things not related to the business?"
A. Employee shall promptly and fully disclose in writing to [Company] any inventions, improvements, discoveries, operating techniques, or "know-how", whether patentable or not (hereinafter referred to as "Inventions"), conceived or discovered by Employee, either solely or jointly with others, during the course of Employee's employment with [Company], or within six (6) months thereafter.
B. Employee shall, on the request of [Company], and hereby does, assign to [Company] all of Employee's right, title and interest in any of the Inventions which relate to, or are useful in connection with, any aspect of the business of [Company], as carried on or contemplated at the time the Invention is made, whether or not Employee's duties are directly related thereto. [Company] shall be the sole and absolute owner of any of the Inventions so assigned. Employee shall perform any further acts or execute any papers, at the expense of [Company], which it may consider necessary to secure for [Company] or its successors or assigns any and all rights relating to the Inventions, including patents in the United States and foreign countries.
C. [Company] shall be the sole judge as to whether the Inventions are related to or useful in connection with any aspect of the business of [Company] as earned on or contemplated at the time the Invention is made and as to whether patent applications should be filed in the United States or in foreign countries.
D. [Company] shall have the option of taking a permanent, royalty-free license to manufacture, use, and sell any of the Inventions conceived or discovered by Employee during the course of Employee's employment with [Company], or within six (6) months thereafter, that are not assigned to [Company] under paragraph B. of this Agreement.
A. Employee shall promptly and fully disclose in writing to [Company] any inventions, improvements, discoveries, operating techniques, or "know-how", whether patentable or not (hereinafter referred to as "Inventions"), conceived or discovered by Employee, either solely or jointly with others, during the course of Employee's employment with [Company], or within six (6) months thereafter.
B. Employee shall, on the request of [Company], and hereby does, assign to [Company] all of Employee's right, title and interest in any of the Inventions which relate to, or are useful in connection with, any aspect of the business of [Company], as carried on or contemplated at the time the Invention is made, whether or not Employee's duties are directly related thereto. [Company] shall be the sole and absolute owner of any of the Inventions so assigned. Employee shall perform any further acts or execute any papers, at the expense of [Company], which it may consider necessary to secure for [Company] or its successors or assigns any and all rights relating to the Inventions, including patents in the United States and foreign countries.
C. [Company] shall be the sole judge as to whether the Inventions are related to or useful in connection with any aspect of the business of [Company] as earned on or contemplated at the time the Invention is made and as to whether patent applications should be filed in the United States or in foreign countries.
D. [Company] shall have the option of taking a permanent, royalty-free license to manufacture, use, and sell any of the Inventions conceived or discovered by Employee during the course of Employee's employment with [Company], or within six (6) months thereafter, that are not assigned to [Company] under paragraph B. of this Agreement.
"Except as provided in this chapter, every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void."
The rest of the relevant chapter addresses mainly those instances where one sells an interest in a business. In those cases noncompetes are enforceable.
California courts routinely void noncompetes under B&P 16600.
No Inflation Taxation without Representation
While the answer varies from state to state, I'll quote what my lawyer told me when I took him one of these employment agreements. "Warner, never hesitate to sign a vague, badly drafted employment agreement." Basically, for my situation, the upshot was that the agreement was so vague as to what it covered that read literally one would have to tell the company everything I ever thought. New idea for a flavoring for brownies, tell the company. New sexual position to try with the wife, tell the company. Plot for a sitcom staring 13th century spanish cardinals talking about the philosophical conundrum the Islamic occupation of the Iberian peninsula presented, tell the company. Clearly, no court in its right mind would enforce such an over-reaching and broad contract.
In addition, certain states, such as California, have laws that say, as a matter of public policy, that if you do something on your own time with your own resources, you own it.
Also, since you didn't post the entire agreement, there's no way to know if there's anything else in it that might be bad, or worse than what's presented here.
However, without having both a license to practice law, or the entire text of the document in question, the above is prelude to the following non-legal advice: See a lawyer. It cost me about $300 when I needed to get a couple of different documents reviewed.
Not enforceable in California. Bus & Prof Code Section 16600.
Yup. I saw that in a contract, told my soon-to-be boss that there was no way in hell that I'd ever sign such a thing, he talked to his lawyer, and we got it stricken from the contract. That easy.
I'm the original poster. I spoke to a lawyer, and he told me that in my state this type of contract would hold and that the employer can punish employees in any way for not signing. So, I'm thinking I just need to find a better employer.