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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.
Seriously, ask a lawyer, not slashdot. I highly doubt a contract like that is enforceable (seriously, they own work you create for your next employer?) but I would talk to a lawyer. And I wouldn't even think of signing it.
Do you have ESP?
I'm wondering if there are any federal restrictions imposed on contract law in the States / Canada / Europe / anywhere else when it comes to inventions being the property of the company... It seems strange to me that, if you make something on your own time, it's the property of the company. That sounds kind of megalomanicial on some level.
Sometimes I wonder if I think too much.
Take it home.
Cross out the parts you think are ridiculous.
Sign it.
Return it.
Contracts must be a two way street to be legally binding. What do you get in return for signing this? More money? I'd guess not. If you want to see an interesting blank look on your boss' face, ask him what you're getting in return.
Ask if you'll be fired if you don't sign it. That'd be interesting, too. Contracts made under duress are also not binding.
I would say that I'm not a lawyer, but I'm not a fucking lawyer and so I don't have to put stupid legalese into my posts!
expandfairuse.org
You could modify the agreement by striking out the "or within six months thereafter" clauses and sign it. There's a chance that it'll be sent only to a paper-stamper who is responsible for checking signatures off a list, and he might not see your modification. Of course it's more likely your boss is on the hook for collecting signatures, and he'll note your changes. You could try convincing him that the agreement is unfair, and that your changes are just.
You could try ignoring it. See if they follow through on their threats.
You could talk to your coworkers and organize yourselves to collectively say "we're not signing this." If an entire group said "no" you'd scare the crap out of management. Of course you'd likely all be labeled "troublemakers" or "union organizers" and be lined up for rapid replacement.
Or you could shut up and sign it. Unless you've got another job in your back pocket, the market's kind of thin these days.
John
If you lived in Illinois, these paragraphs would be completely null and void. I can't speak for other states.
"To those who are overly cautious, everything is impossible. "
Slavery is illegal in this country... and an agreement like this is essentially financial slavery.
The idea that this kind of control over IP can extend beyond the scope of employment is, unfortunately, fairly typical. I think it's worth trying to fight. I haven't heard about trying to extend beyond the duration of employment, too -- that's just absurd.
Maybe it's possible to ask for increased compensation -- say an extra six months -- in exchange? If they really think that the intellectual property you'll create is worth it, that seems to be a first attempt at fairness.
In any case, in IT, are you really in the position to be creating that much intellectual property? Lots of companies are trying to shove agreements like this down employee's throats, without thinking about the consequences. Unfortunately, most people just sign blindly.
It's a bit overused, but might this be reflective of the atmosphere of American consumerism? Nobody wants to create content anymore... we'd like to just consume media. I hate to say it, but I think this all comes full circle into the file sharing debate:
People today don't sufficiently value intellectual property.
This leads to the problem with pirating electronic media, but also seems to lead to the situation where people don't stand up and refuse restrictive employment contracts like this one.
--
Educational microcontroller kits for the digital generation.
Figure out what the agreement is worth and ask them for compensation. If they want 6 months of your "inventions" after you leave employment, they need to pay you 6 months salary, or a reasonable portion thereof, up front.
Since you didn't agree to this new contract when you were hired, you should have your pay adjusted accordingly.
Good heavens Miss Sakamoto - you're beautiful!
it's always the employee's with everything to lose and nothing to gain that have these ideas, but don't tell their employer because they won't be rewarded for sticking their neck out and leaving and going it alone runs the risk of being sued, but also means they don't have the backing of an established company to get the idea off the ground.
profit sharing is the way of the future, just as the CEO gets a bonus when shares reach a certain level, so should employee's if big business ever wants their workers to take their shareholders seriously.
i get a production bonus in my job, which is set at REASONABLE levels. i can make up to an extra $1000 a month through this, but the average is around $500. it makes everyone i work with take the companys productivity more seriously.
If you mod me down, I will become more powerful than you can imagine....
I know a lot of people will advise you to consult a lawyer, but my advice, as one who has consulted lawyers far more often than I'd wish to have had, is not to.
First of all, the law is not nearly as clear-cut as geeky programmer types think it is. As a rule, the law is roughly speaking some mash-up of what the legislature wrote, what the judge thinks ought to be so, and what a jury of random folks majoring in theater and journalism at the local community college think it ought to be. Hence a good lawyer is probably not going to be able to give you an precise and definitive answer on all your what-if scenarios. Instead, he'll probably agree with you on general grounds that the contract is evil, vicious, and you are a noble person dreadfully wronged blah blah (this is just advertising, an appeal to your vanity, so you won't forget him when you someday need a lawyer). If you press him on specifics, the most he's likely to do is tell you roughly how he would argue the case against the contract if he needed to, but he's unlikely to guarantee it will work.
Secondly, aside from satisfying your injured pride, what would be the result of asking a lawyer and setting yourself back $500 or so? Suppose the lawyer agrees it's a smelly contract, and a court might rule this or that aspect unenforceable, if push came to shove? What are you going to do with this information? Go to your boss and say Ha! All your base are belong us! and he's just going to say Curses! Foiled again! and tear up the NDA, maybe give you a raise for showing initiative and helpfully pointing out the folly of the company's ways? I mean, as opposed to marking you down as a pain in the ass who needs to be shitcanned at the first opportunity, like maybe right now? Your feelings would probably be more effectively soothed if you spent that $500 buying pretty girls drinks in a club.
Finally, if you just have enough mental discipline to keep your mouth shut when you need to, this doesn't matter anyway. Suppose you do have some kick-ass wonderful idea while you're working for this bunch, and you decide you want to take it elsewhere. All you need to do is not keep notes on your idea in your office (duh), not work on it using company computers and networks (duh), not talk boastfully about it around the water cooler -- this is the hard part -- and just generally keep your thoughts to yourself as long as you work there and for six months afterward. When your killer idea takes the world by storm it's going to be up to your former employers to prove in court that you had the idea eight months earlier, when you still worked for them. But without the evidence you've carefully avoided providing, they're screwed. They can't read your mind.
As for the ethics involved: anyone who gives you a contract like that to sign has made their lack of morals completely clear. You owe them no consideration in return whatsoever. Indeed, if you used them to pay your rent while secretly working out your brilliant idea at home, they'd have only gotten what they deserve.
Yup. First, talk to a lawyer. This costs 30 min of his time, so it's not expensive.
If he confirms that this is unenforcible, propagate that to the company and see what they have to say. If it's a company with multiple offices, they may in fact be asking to sign a paper drafted for another country. In which case they may back off and come up with a revised version. I've been through this and it does in fact work.
If the lawyer says it's an OK as per local laws, ask company for a list of exemptions. Basically put together a list of current projects you are "working on" and have them attach this list. Again, be reasonable, explain the situation, and there's a good chance they will agree. Moreover, you will be talking to HR about this, and HR will be talking to legal dept. on your behalf. So do your best to win HR over first.
The trick with an exemption list, which _typically_ works, is to (a) be vague with project description (b) avoid a code escrow
If they don't get a copy of your current code tree, they won't ever be able to prove your existing version is not the one you have listed on an exemption list (excluding stupid mistakes, obviously).
Again, I personally made this sort of an arrangement with a former employer, and I know a couple of other people who did the same with other employers. It's doable. Just be polite and reasonable.
3.243F6A8885A308D313
"As for the 6 months bit, it's not like you can get a patent in under 3 years.. "
It says "invention" not "patent." Thus, it would apply to any patents granted later on said inventions even if it took 3 years to get that patent on the invention that you conceived within those 6 months.
"They're paying you to come up with cool, neat, innovative tech."
Ok I agree with you but these companies should have a royalty program in place for its inventors. Otherwise there is simply no incentive to disclose inventions to the employer. I think IBM has a program like that. Any company that doesn't though is just ripping off its employees. If this guy's contract has a royalty provision then it might not be that bad really cause the company would pay for the patent process and if they do end up making a bunch of money off the invention then he gets a nice bonus. But like someone above said, we can't determine that without seeing the entire agreement.
"Warner, never hesitate to sign a vague, badly drafted employment agreement."
... you lose even if you win.
... you lose even if you win.
Yeah, legal fees galore.
Look I recently dealt with a dickhead that screwed me out of ~$30k. And ~10 others out various amounts ranging from $10-$90k. We were all contractors. We all signed the same contracts. All of the contracts are mostly unenforceable.
But here is the deal, if your opponent is irrational and has lots of money
let me repeat that.
If your opponent is irrational and has lots of money
This guy was willing to play hundreds of thousands of dollars to make sure none of us collected a dime. He has a mental problem with admitting he is wrong. He would counter-sue for millions of dollars. Claims that were probably losers (you can never be 100% sure in litigation) but would have still cost $100k in attorney fees to defend. And it isn't just attorney fees it is your time. And in a profession where I bill by the hour, my time is my money.
The $90k guy and the $20k guy sued (separately) and all of us waited to see what happened. The suits settled for a waiver of claims and no money. Basically the $90k, and more so the $20k guy, decided it wasn't worth risking their house to win. Plus even if they won it would have cost more in attorney fees (especially for the $20k guy) then they would have won.
It is like in poker when you are forced to fold, despite your winning hand, because you don't have enough money to match the bet.
This dickhead had enough money to piss away a good deal of it on making everyone miserable.
If in the 6 year statute of limitations I win the lottery and can play on equal footing with him, I'll sue the bastard, but until then it isn't worth my trouble to be right.
But keep this in mind if one party is rational and the other isn't and has money to afford to be irrational, the irrational party wins.
If it is a big company they will either do (a) be rational, settle and walk away or (b) be irrational and fight forever because they have the money to do so.
It's shocking how few people realize that this is an option. There may be consequences for your actions such as termination, but you do have the option to not sign it.
I had the same thing happen to me a few years back. I had an NDA/non-compete dropped on my desk by the HR manager and I looked at it and handed it back to her and said no. She said I had to sign it, required, firings, I looked back and said Okay and put it in my trash.
A few hours later my boss came over and asked why I didn't sign it. I explained my issues and after three rounds with legal, they came back with a very narrow agreement that I was willing to sign.
Later on, I was talking with some other employees and happened to mention what happened and they were all shocked.
Why is it that its easier to write a huge comment here, but I still can't write the first paragraph of that english st
If it's software you are working on in your own time, make sure it includes GPL code. That at least would make any legal action they might like to take so difficult that they probably won't bother.
If you have a good idea, is seems perfectly fair to quit, redevelop the entire system from scratch (without infringing applicable patents), incorporate your idea and sell the result. For most pieces of software - good luck - that'll take you years.
Taking the whole codebase is of course a copyright violation and completely illegal (even if you wrote the whole thing yourself during your work there). I'm posting anonymously as this actually happened at the company I work for. A guy just rebadged the software and tried to sell it himself. The thing ended remarkably amicably with him being fired and ordered not to work in the industry (our market sector - not the whole of IT), in exchange for not being prosecuted.
I can see where companies are coming, but I think they should mostly rely on that fact that most of these situations that cause problems are already illegal acts - there's no need for the contract to mention them at all. We were all sent new contracts with further terms to guard against the situation. I just crossed out the over-broad terms before signing it.
I think you're missing something here - looks more like they were looking for an excuse to get that confidentiality agreement signed. I'm willing to bet all the change in my pocket that if you'd signed it, they'd have 'worked out some way around the disgraceful non-appearance at the meeting'.
I guarantee that you were not fired for missing a meeting, rather, missing the meeting was the legal pretext for firing you. You must live in a state/country with strong labour protection laws. The reason you were fired was something that was not an adequate legal reason for the firing. Many EU countries have laws that make you essentially unfireable after certain periods of employment. Stealing office supplies, missing meetings, on the otherhand can be used as legitimate grounds.
Yes, I've seen this happen.
But...But...that's like stealing from the company! Ha. Of course, the last time I created a commercial product, they fired me, then inadvertently destroyed the code themselves before they could deploy it (they were worried I'd compiled timebombs into the binaries on my development server, so they wiped it). They also tried to sue me under a non-compete that I signed with my pseudonym "I won't sign this." Real bunch of winners. They went out of business not long after I left; I wish I could claim credit.
Makes me glad I don't work in R&D. Most times, if I come up with something clever, I can deploy it, open source it, and take it with me to the next job. I don't have to worry about greedy management trying to steal it, because they're in no position to profit from it, except incidentally. I still have plenty of stress, but it's not that kind of stress.
ad logicam Claiming a proposition is false because it was presented as the conclusion of a fallacious argument.
So it's one god damn word, the most basic pronoun in the English language, and I don't know about you, when I learned it, 20 some years ago, they told me it described someone with a penis. It's a pronoun to describe a male, that's how people understand it. If you disagree I'd advise you to go to a local strip club or red light, and refer to the 'working woman' by the male pronoun all night. Call her 'he'. Sometimes you might get lucky, but most of the time that should settle things.
Every time this issue comes up, you get hundreds of armchair lawyers saying, "Oh, just sign it, it isn't enforceable, anyway."
Well, the fact of the matter is you'll never know what is enforceable or not until you pay some lawyer $10,000.00 for the privilege of arguing it in front of a judge, and even then, you never know what will happen on any given day in court. The judge could enforce the agreement (you did, after all, sign it), he could modify it so it conforms with state law (well, you intended to agree to this, but it doesn't quite conform to state law, so here I'll modify it for you so it conforms... you're still on the hook for some, but not all, of what you agreed to), or he could toss it outright.
But you never know what is going to happen, and especially if you get some compensation in return for signing the agreement, you should NOT count on a judge simply tossing it. Judges hate to give a party something for nothing, and if the judge gets it in his head that you signed the agreement with your fingers crossed (under the impression that the judge will someday invalidate the agreement), the judge will not be amused.
So you did the right thing consulting a lawyer. Good luck with whatever you decide to do!
They don't grade fathers, but if your daughter's a stripper, you fucked up. --Chris Rock
First off, I believe such a clause is unreasonable.
IANAL, so check carefully first. But I wonder about signing anyway, knowing that the objectionable clauses are unenforceable, and then doing as you please. They do try to put such crap in there. "Yes I will hand over any invention I make for up to 6 months after this job ends", and then the instant it ends, you don't. They can't stop you. You may not even invent something related to their business in the time frame, so the whole issue may be moot. If you do invent something, you may be able to wait out the 6 months. And they may not even find out. If they find out and it hasn't been 6 months, they may do nothing. If they do something, it may be nothing more than empty threats, trying to scare something out of you, as they may know they have no ground to stand on. If they are deluded and actually follow through on threats to sue, then I don't know what will happen-- get thrown out of court right away? Lose horribly? Or, could they actually win?
But, much better to refuse to sign. Don't want a reputation as someone who break contracts no matter how unconscionable. Really, be ready to walk. Demand the contract be changed, and if they refuse, walk. That should always be an option in such negotiations, and the other side has to know it is an option. Also they should know that's not a bluff, but that's harder. Some people are pretty pig-headed about that-- can't be convinced it's real and not a bluff until the trigger is pulled. (There are businesses that feel such "ability" is undesirable in their employees, and will then not want you around just for that. Some get really hung up on that "soft skill". Run, don't walk, away from those sorts.) But that this "should I sign" question is being asked at all suggests a difficult position-- you can't walk. This is also bad in other ways. The fact that you didn't immediately reject it might suggest to them that they can ride you hard, lean on you, walk all over you, and so it may be only a matter of time before another, worse demand is pushed.
Myself, I tend to not like to even negotiate with a business that tries such crap, and am likely to walk right there depending on if I feel this is the way they do business, or this is just a rare stupid mistake on their part and they aren't normally like that. If it is the way they are, then they'll keep right on pushing, trying to slip something in, and you've always got to watch your back. I want to concentrate on technical problems, not sweat over how my employer is trying to cheat me this month and whether I missed it and am about to be taken, and I will just walk in that case. Bad enough wrestling with credit card companies, phone companies, cable companies, ISPs, health insurance providers, and such ilk. Sure don't need any more worries. It's not much of a job if there's no trust, and the relationship is adversarial.
Intellectual Property is a monopolistic, selfish, and defective concept. It is "tyranny over the mind of man"