Fahlman@CMU-CS-C.ARPA (04/08/84)
From: Scott E. Fahlman <Fahlman@CMU-CS-C.ARPA> Recently a student of mine applied for a position with one of the new AI companies (I'd rather not say which one) and received what he considers to be a very attractive offer. Unfortunately, there is one problem that will probably prevent him from accepting the job: the company requires him to sign an agreement that if he leaves that company for any reason, he will not compete with them or work for any competitive business for a period of three years. In order to keep this agreement in effect, the company would have to continue to pay him his salary, minus any money he makes from other employment or consulting. Since this company defines its business as AI and AI tools in a very broad sense, this means that they could force the former employee to stay completely out of the field of AI for three whole years if he leaves them -- an eternity in this field. I've heard of companies that require you to promise not to use any proprietary knowledge on behalf of your next employer (or anyone else), but I've never heard of an agreement like this one. Since the penalty for leaving is potentially so high (you get a salary for doing nothing, but are effectively prohibited from practicing your chosen profession for a period of time that is long enough for you to go completely stale), it looks to me like they are trying to make you sign up with them for life -- at their option, of course. This company seems to think that this agreement is a perfectly routine matter and that many companies in AI have similar requirements. Is this true? Is this sort of thing spreading? Have people out there actually signed agreements of this sort? Are they legally enforceable? Unless I hear otherwise, I'm going to consider this as an isolated case of institutional paranoia on the part of this one company, and will steer my students away from that company in the future. If everyone is doing it, that is much more alarming. -- Scott Fahlman, CMU <fahlman at cmu-cs-c.arpa>
nixon%toronto.csnet@csnet-relay.arpa (04/13/84)
From: Brian Nixon <nixon%toronto.csnet@csnet-relay.arpa> At least in Canada, the courts usually take a low view of such clauses in employment contracts, UNLESS they are severely restricted in scope, e.g. are for a period of less than 6 months, apply only to taking a job within the same city, apply only to taking a job within a particular industry. Brian Nixon, Dept. of Computer Science, Univ. of Toronto.
SASW%MIT-MC@sri-unix.UUCP (04/16/84)
From: Steven A. Swernofsky <SASW @ MIT-MC> An excellent article on ''covenants not to compete'' and other non- disclosure agreements is Davidson, ''Constructing OEM Nondisclosure Agreements'', 24 Jurimetrics Journal 127 (1984). The author notes that after-employment restrictions are strong medicine, and therefore they are narrowly construed as to time and subject matter. In some states (e.g., California) they are impermissible except in narrow circumstances (such as the sale of a business and the like). Likely the best policy is to consult a lawyer. If you really wish to steer students away from that company, I would think the best way would be to name names. Their employment terms are hardly a secret in themselves. -- Steve
rcd@opus.UUCP (Dick Dunn) (04/21/84)
A question on non-competition clauses of the sort in which you agree, if
you leave a particular job, not to work in that field (or geographical
area), etc.: I once heard that they were essentially not enforceable, the
given reason being that there are certain legal rights you can't give up
(called "unconscionable clauses" in a contract), and that somehow "giving
up the right to make a living (in your profession)" fell into this class.
I don't know if this is actually true - I'd like to hear a qualified
opinion from someone who understands the law or who has been through a case
of this sort.
In any event, I think it's pretty shoddy for an employer to make such
requests of an employee - this is going a long way beyond assigning patent
rights while you're employed and not disclosing company secrets. If the
employer mistrusts you that much, can you trust him? I also think it's
foolish to agree in writing to something that you don't accept, on the
basis that you don't think they'll use it or that it isn't enforceable.
Don't bet against yourself!
--
...Are you making this up as you go along? Dick Dunn
{hao,ucbvax,allegra}!nbires!rcd (303) 444-5710 x3086andrew@inmet.UUCP (04/22/84)
#R:sri-arpa:-1221200:inmet:11000012:000:600
inmet!andrew Apr 21 15:53:00 1984
A few years back, I made the mistake of working for Computervision. They
tried to force me to sign an agreement that I a) would not work for any
competitors for 18 months, and b) would not "entice" other employees into
leaving for an equal length of time. They didn't say a word about continuing
my salary for that time, either!
The incompetents in Personnel (I'd call them "morons", but true morons are
considerably more conscientious workers) didn't notice that I never signed
or returned the above agreement, though!
Andrew W. Rogers, Intermetrics ...{harpo|ihnp4|ima|esquire}!inmet!andrewward@hao.UUCP (Mike Ward) (04/23/84)
[]
A few years ago a doctor (of medicine) in Boulder, CO was driven out
of town by the local medical business community. They used the courts
and a non-competition clause to do it. I don't know how high he appealed,
but he is not practicing in Boulder right now.
In Boulder, they don't practice medicine, they run run a business.
(With a few *very* notable exceptions.)
(and, yes, the medical business community is actively trying to harrass
and otherwise run these exceptions out of town, too)
--
Michael Ward, NCAR/SCD
UUCP: {hplabs,nbires,brl-bmd,seismo,menlo70,stcvax}!hao!ward
BELL: 303-497-1252
USPS: POB 3000, Boulder, CO 80307mpr@mb2c.UUCP (Mark Reina) (04/23/84)
Non-competition clauses may or may not be enforceable. It depends on the skill of the party involved or any special knowledge that person might have. For example, it is is not a shoddy practice or expectation for Coca Cola to expect its personnel not to work for Pepsi cola, especially and only if they have knowledge of the secret formula.
mpr@mb2c.UUCP (Mark Reina) (04/24/84)
I recently read the story of a poor Boulder, CO medical doctor. On the net, it appears that the courts enforced a non-competition clause and consequently forced the doctor out of Boulder. This story lacks much necesarry information before the reader can fully appreciate what the writer has on his mind. First, is this a veiled criticism of a non-competition clause. Secondly, is this a laudation of the non-competition clause. I find reading these third person recounts most distressing. Did the doctor willingly sign a contract containing a non-com- petition clause? Was the doctor a specialist? How big is Boulder? How many doctors are there in Boulder? Was the doctor really barred from practicing in Boulder? Did the doctor move away or practice elsewhere of his volition? True these are tedious questions. Possibly they avoid a more dramatic conclusion than can be imagined without there resolution. However, the practice of law and completion of litigation would both require and demand answers to such questions. Without the answers readers of the net, as well as judges and juries, can not ascertain whether equity was served.
wetcw@pyuxa.UUCP (T C Wheeler) (04/24/84)
References: <386@opus.UUCP> hao.932, <243@mb2c.UUCP> In reference to the Doctor in Boulder. The Doctor had joined a practicing group in a clinic. He did indeed sign a contract which contained a clause which said that if he left the clinic, he would be unable to practice in the county in which Boulder is in. It seems that after several years, the administrator of the clinic (not a Doctor) decided that Doctor X was not bringing in enough cash to the group. The Doctor was warned that he would have to increase his patient load to bring his revenues up to what they thought it should be. The Doctor refused to compromise his patients care by giving them less time. After a standoff, the administrator and the other Doctors told Doctor X he would have to leave the clinic. The crux of the problem was that he did not leave on his own, but was asked to leave and therefor believed that the non-comp clause invalid. He opened an office in Boulder. Many on his former patients followed him, much to the displeasure of the clinic crowd. The clinic then decided to go to court. They won in court so that Doctor X had to move his practice out of the county. The patients still followed him. I think that this case is working its way up to the Supreme Court. The whole affair was aired last year on TV. The clinic crew and their administrative lackey came off in a very bad light. They were arrogant and seemed self serving to the nth degree. I hope Doc X wins in the final analysis. In the meantime, there was a time-limit clause in the contract which lapses sometime soon. T. C. Wheeler
jah@brunix.UUCP (Jim Hendler) (05/11/84)
You should be aware that it is not necessarily the case that you MUST sign the non-disclosure agreement exactly as worded. I recently signed on as consultant with a company which had a very stringent (and absolutely ridiculous) nondisclosure/non-competition clause form. I refused to sign certain sections (mainly those limiting me from practicing AI, consulting for others where there was no conflict of interest, etc.) We eventually eliminated those clauses, rewrote the contract and I signed willingly. Similarly, another company I worked for was unwilling to change the document, but, when I refused to sign away my rights, they pointed out that I got to fill in a section with information about what things I already hadgoing for me. (that is, what things I had done previously so the company had no claim on these things). Since the company's contract included such things as "no competing business" and the like, I was able to claim prior rights to "artificial intelligence research", "natural language processing", and "expert systems research." The very vagueness of these things, according to my legal advisor, makes it that much harder for the company to really do anything. A final note, most companies will clain they do do this "as red tape" and will "not really hassle you." Don't believe them! They've got more bucks then you and if it goes to court, EVEN IF YOU WIN, it will cost you more than you can afford. Speak to a lawyer, change contracts, etc. In the AI world we've got a seller's market. Take advantage of it, these companies want you, and will be willing to negotiate. Sorry if I do go on... Jim Hendler