Why I Don't Sign Non-Competes

Re:Why I Don't Sign Non-Competes by zekevermillion on Wednesday March 21, 2018 @10:42AM (#16638381)

This language is very common in IP assignment agreements (often bundled together with restrictive covenants where enforceable). I don't love noncompetes, but assuming you plan to work in the tech industry with proprietary software or hard tech, you will have to get comfortable agreeing to provisions such as this. The purpose of the clause is risk allocation. If the employer has a dispute with you after termination, involving your alleged infringement of their copyrights or patents in violation of this contract, then this lowers the burden for them to show that you have breached your contract as they do not need to show factually that each element of copyright or invention was created or conceived exactly prior to termination. This obviously is unfavorable to employees, and if you can negotiate it then by all means do. But as a lawyer who has dealt with hundreds of similar agreements, I feel like a lot of the commenters may be overreacting.

Again, I don't like competitive restrictions -- I don't even like proprietary software business models! -- but if you are in that game, then this kind of risk allocating language is reasonable in that context. Refusing to sign a contract because of this clause means you are perhaps a closeted free software advocate (and good for you!) or do not really desire a long-term career in this (arguably exploitative) industry.

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Re:Why I Don't Sign Non-Competes by Spoom on Wednesday March 21, 2018 @10:55AM (#16638504)

Refusing to sign a contract because of this clause means you are perhaps a closeted free software advocate (and good for you!) or do not really desire a long-term career in this (arguably exploitative) industry.

I have to disagree. I've had a long career in software development and I've never seen a clause this broad. If the clause was restricted to the term of employment, that would be one thing, but insisting that they own your brain beyond the time that they're even paying you is too overreaching to even consider.

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Re:Why I Don't Sign Non-Competes by zekevermillion on Wednesday March 21, 2018 @11:25AM (#16638839)

That's not what the language says. The employer claims ownership of inventions conceived during your employment and requires you to disclose them for a period of time after your employment. For example, if there's an invention -- say you worked on LIDAR for self-driving cars -- and you were part of a team during your employment. Your employment ends, then you 6 months later file your own patent for a part of that technology. This language makes it so that the employer has a contract claim even though the patent application wasn't until after your employment ended. Conversely, it also protects the former employer from infringement claims arising from your post-employment patent that is allegedly based on their stolen secrets.

As an appeal to authority, take the Confidentiality and IP Assignment Agreement generated by Goodwin Procter's Founders Workbench. It contains a much more exhaustive (and better) definition of assigned rights, and the obligation to disclose them survives indefinitely. It also is rather more nuanced, so it might not be readily apparent that it in fact is a much stronger assignment clause than the one criticized by the OC.

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Re:Why I Don't Sign Non-Competes by Spoom on Wednesday March 21, 2018 @12:04PM (#16639340)

Doesn't that make part of the agreement a tautology, though?

"I will promptly communicate to the Company ... during my period of employment, and I agree that any such invention ... shall be presumed to have been made during my period of employment..."

Wouldn't a simple assignment clause during the employment term be both clearer and provide the same rights?

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Re:Why I Don't Sign Non-Competes by zekevermillion on Wednesday March 21, 2018 @05:42PM (#16642682)

Belt and suspenders. There should be an assignment clause -- if not, the agreement is totally defective! The assignment clause is of course the key part. But there are also further assurances, that make it easier for the company to "protect its rights" as it were. It's about risk shifting. If there's a dispute, how hard does the company vs the employee have to work to make out a claim and prove damages. The rationale for company-favorable clauses is that the company has more to protect, and has the same relationship with every employee -- thus an accumulation of risks. I personally have decided I no longer view proprietary software as an ethical business model, and I would never agree to assign my rights to such a company under most circumstances. But that is a personal decision that also makes me unemployable, ahah.

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Re:Why I Don't Sign Non-Competes by rootusrootus on Wednesday March 21, 2018 @10:50AM (#16638461)

That is disheartening to hear. I've been doing software for over 20 years and I have yet run across such a provision in my employment contracts. I do not hold a strong ideological position on free software but if a potential employer asked me to sign something like that I'd just walk away. I do work on my own side projects, and the most I would ever agree to is that my side projects won't be in the same area or in any way compete with any of the products my company offers (easy for me because I don't work for a place like Google...).

The notion that a company owns you is just silly IMO. They make a big point of informing me once a year that I am employed at will and can be terminated at any time for any reason or no reason. So I am clear with them that outside of my work week, everything I do is mine. This is business.

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Re:Why I Don't Sign Non-Competes by zekevermillion on Wednesday March 21, 2018 @10:56AM (#16638514)

I absolutely agree with you in principle. The language in question does not capture inventions you create on your own time with your own equipment, etc, as a matter of law. Copyright may be somewhat different but would need to view the entire contract -- a good one would include a carve-out for inventions, copyrighted works, etc., outside the scope of employment. This is typically where an employee should focus negotiating efforts -- not on the standard risk-allocating language, but on the carve-out. Personally I would never sign a noncompete, and I would never sign an invention assignment agreement except in a limited circumstance such as pledging a bit of software to a foundation to better enforce the licensing terms, that kind of thing. But then I am not ever going to be employed by a large tech company and have the luxury of my personal rules.

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Re:Why I Don't Sign Non-Competes by ajnin on Wednesday March 21, 2018 @12:32PM (#16639712)

Your comment reads a little strange, if this kind of agreement is unfavorable for employees, makes it easier for a former employer to prove breach of contract, and contributes to an exploitative industry, why recommend signing it ? If we collectively as employees argue and refuse to sign such a clause, it will create pressure to make it go away. On the contrary if we sign it without a fight, the clause will spread throughout the industry, making it hard to negociate. I've been pursuing a career in that industry for several years, and I've successfully negociated that clause away when I came across one that I deemed exaggerated, and I encourage everyone to do the same.

I don't really see the link with free software either, preserving the right to use one's mind, the single most important thing a developer has, seems very important no matter what.

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Re:Why I Don't Sign Non-Competes by yborg on Wednesday March 21, 2018 @10:56AM (#16638518)

This thing seems stupid to me. Am I required to disclose such a restriction from a previous employer? I say no, since it's common in the industry and a prospective employer would be expected to either ask for disclosure or know it may exist. So now my inventions (assigned to my new employer by a similar boilerplate clause) are in violation of the previous agreement and if a legal dispute arises, they will now sue my current employer, who knowingly employed me despite this IP assignment and is in willful violation of the "previous employer's IP."

I've never once been asked if a previous IP assignment agreement of this sort is in force when taking a new position.

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Re:Why I Don't Sign Non-Competes by zekevermillion on Wednesday March 21, 2018 @11:03AM (#16638595)

The disclosure of prior agreements is to YOUR benefit as the employee / contractor. A lot of employers treat this as sort of a nod nod, wink wink situation, where they know you have prior conflicting agreements and would rather not hear about them -- b/c proving knowledge of the prior restriction is an element of tortious interference, by which a former employer can go after the next one for the employee's violation of the old restrictive covenants. As the employee, by disclosing the prior restrictions, you may insulate yourself to some extent against claims by your new employer if there's a 3-way dispute. Yes, restrictive covenants are heavily abused and I wish we didn't use them so widely. But if you're asked to sign one, there are normal areas to negotiate -- but refusing to sign at all will prevent you from advancing very far in the proprietary software industry.

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Re:Why I Don't Sign Non-Competes by ghaff on Wednesday March 21, 2018 @11:17AM (#16638733)

I have never been asked about IP assignment (and haven't really been in a situation where it would come up). But I've actually been asked about non-competes. (By a small firm which would have absolutely walked away if I had one.)

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