gj@ut-sally.UUCP (George Jenkins) (05/31/84)
My employer has asked me to sign an employment contract that includes
a covenant not to compete. He claims that such restrictions are standard
throughout the industry. I want to find out if it is indeed a "standard"
and if so I would like to look at similar contract clauses to compare mine
against. I have included the clause from the contract below.
Please reply via mail; I don't get a chance to read net news very often.
Thanks in advance for any information/advice.
George Jenkins
gj@ut-sally
{ihnp4,seismo,ctvax}!ut-sally!gj
{ihnp4,seismo,ctvax}!ut-sally!absolute!gj
In order to safeguard the information described in Section 4a,
above, Employee agrees that for so long as he is employed by or
associated with XXX, and for a period of one year from the date on
which, for any reason whatsoever, he ceases to be so employed by or
associated with XXX, he shall not, within the United States, either
directly or indirectly, for his own behalf or on behalf of others,
serve as an officer, director, shareholder, owner, partner, employee,
promoter, consultant, manager or otherwise, of any entity or person
whose business activities are directly or indirectly competitive with
any services offered by or any business activities pursued by XXX.
For purposes of this Agreement, a competitor of XXX shall be considered
to be any person or entity which produces or develops business
software for accounting, word processing, data base management or
communications applications written in the "C" programming language
and intended for use in a UNIX operating system environment. In the
event of Employees's breach of this covenant not to compete, it is
understood and agreed that XXX shall be entitled to injunctive relief
as well as any and all other applicable remedies at law and in equity.
If a court of competent jurisdiction should declare ths covenant not
to compete unenforceable due to an unreasonable restriction of
duration and/or geographical area or for any other reason, then XXX
and Employee hereby acknowledge and agree that such court shall be
empowered to reform this covenant not to compete to a reasonablbe
restriction and/or to grant other relief, at law or in equity, which
is reasonably necessary to protect the interests of XXX.dyer@wivax.UUCP (Stephen Dyer) (06/02/84)
I'd tell that employer to put that clause where the moon don't shine. -- /Steve Dyer decvax!bbncca!sdyer sdyer@bbncca.ARPA
bob@sdcsvax.UUCP (06/03/84)
I'm not a lawyer but... You implied that you've been asked to sign the noncompetition agreement for a job YOU'RE ALREADY HOLDING. If so, or if you agreed to take the position before they told you about this agreement, I think you've got a great negotiating position. You can't sign away something of value without a "consideration" (value in return). For example, if they run your photo in the company newspaper, they need a release (and have to pay you >= $1). Agreeing to not fire you on the spot isn't a consideration. The cost of the agreement to you is something like one year's wages when you leave (unless you change your line of business). So, demand that they include in your agreement that you are entitled to one year's salary (at your highest pay rate) upon termination of employment FOR WHATEVER REASON. You can also negotiate on benefits during the following year, if you like. Most probably, the company isn't willing to pay that price, and will not bring up the contract again. Just the same, you should find a new job ASAP (they'll probably fire you for a random reason, which is probably illegal). If the company does agree, get yourself a copy of the contract, signed by an officer, and quit immediately. Let the net know what happens!
fran@cbdkc1.UUCP ( Frank Webb 3587) (06/04/84)
<eat, bubbula..> The employment contract you showed will meet any court of law's current interpretation. The time period and the restrictions are within the current readings of "reasonable", and the clause that the courts can set a reasonable time or restriction should the current definition prove too burdensome is a good cop-out. The real question is whether your "livelihood" is jeapordized by the restrictions. If you are a programmer, and they try and keep you from programming, then it will not stick. If you are a programmer, and they teach you, or provide the environment to learn, let's say, robotics control, then they have the right to restrict your entry into robotics control either in direct competition, or by being employed by a competitor. You have to determine whether you are going to learn enough for them to want to enforce the contract. If you are good, then it is in their interest to keep you on the sidelines for a year until your stored information is less valuable to you, and less threatening to them. . Frank Webb cbdkc1!fran
smh@mit-eddie.UUCP (Steven M. Haflich) (06/04/84)
Preface: I am not a lawyer. Therefore anyone who takes this advice deserves what he gets :-). The proposed agreement is ludicrous. The clauses near the end almost acknowledge that the agreement *might* be fundamentally flawed and therefore unenforcable in whole or part. The humor of the company's proposal is that any resolution by a court of proper jurisdiction would almost certainly require much longer than the period of restriction, and could possibly cost you more than the year's salary in question -- unless someone like ACLU picked up the case. Now, the proposed "contract" as you have explained it does not quite seem a real contract because only one side (you) covenants anything of value; I am unqualified to decide whether continued employment would properly qualify as something of value from your employer. However, I know one thing about *good* contracts: they cover all reasonably expectable contingencies and are not, as this one seems to be, designed from the beginning to end up in court. Inasmuch as this agreement admits to its internal flaws, and therefore that one or both sides *expect* to be unwilling to satisfy with the terms, and that it will become necessary to resolve matters in court, it just isn't a "contract" spelling out agreed future performance by both sides. This might be sufficient to make a court just throw the whole thing right out. As others have advised, YOU NEED A LAWYER. But before assuming the considerable expense of retaining one -- remember, you really want a specialist who is well versed in this particular area, as it is apparently still quite fluid and undergoing interpretation -- allow me to suggest a couple (probably) harmless strategies which could lay the matter to rest more cheaply: Tell the company: "This `contract', if indeed it is one, asks me to covenant relinquishing considerable freedoms. I obviously need a lawyer to represent my interests. Since it is a condition of employment, I assume the company is willing to pay my expenses in this matter?" By analogy, you would hardly be expected to pay for a company-required medical exam prior to employment. If that doesn't shut them up, try explaining reasonably what terms you will suggest to the lawyer: The company would have the *option* of exercising the agreement when and if you leave. (The point may be moot if you decide to work in an unrelated area.) If they exercise the agreement, they should *at least* continue giving you your salary with *all* benefits, and perhaps a little more to cover your lost currency in the field. This last is only reasonable. But if they refuse to be reasonable, then I'd play safe and kiss the turkeys goodbye ASAP! If you want to have fun with them, of course, you could first try pointing out how unreasonable the contract appears from your side of the fence by emending it to be symmetrical: When you finally part with the company, preclude *them* for one year from doing work in Unix(r), or programming in C, or communications, or ... Sauce for the goose ... Steve Haflich, MIT
rcd@opus.UUCP (Dick Dunn) (06/05/84)
The following response was given to a question of "Should I sign" an overly restrictive non-competition clause: >I have asked my POSLQ lawyer about this and she says sign it and don't >worry. The point is one of bargaining positions. Your BIG company, >in the eyes of a court has such a greater bargaining position than >LITTLE you, that the disparity would nullify any action that they would >take against you in court. It may not even hold water, because it >limits your freedom and livlihood... If you take this attitude, you're betting against yourself! If you think it won't stand up in court, why sign it? Are you really willing to bet your livelihood that you can win that court case? Can you afford the time, grief, and (mostly) money of a trial? -- Dick Dunn {hao,ucbvax,allegra}!nbires!rcd (303)444-5710 x3086 ...Never offend with style when you can offend with substance.