I don’t want to say too much, because my son works in a very niche industry, but let me just say they are real in other industries than engineering, not just for upper level employees, and can be used to force a former employee to bankrupt himself defending a lawsuit that is ultimately thrown out just to prove a point with someone who IS upper level. It was a nightmare. Also, in researching non-competes for him I learned that it’s common to shove an agreement in front of a tired, overworked, or very busy new employee and insist they sign or lose their job. That’s exactly what happened with my son. He will never sign another one, and I would not suggest it for anyone else.
@blossom I was reviewing the thread that @ucbalumnus pointed out. In that thread, @ucbalumnus posted a link to a Boston law firm that made a handy 50 state reference guide. The guide noted that in MA, there are certain exemptions from NCA under state law. It noted Broadcasters, doctors, nurses, psychologists, and maybe one more. I chuckled as it gets to the lobbying power of these individual trade organizations. I noted no such exemption for the poor accountant or finance guy. I guess you have to go to Med school or talk about it on the air in order to be exempt.
I work in tech and everyone in my company signs a non-compete. It’s limited to direct competitors, so you could get a job with a tech company that has a different focus but not a company we would be going head to head with when competing for clients.
Wouldn’t that be more problematic at a large company that is competing in many markets, such that a larger percentage of alternative employers would be seen as competitors?
When my husband left a structural engineering firm, the owner presented him with a very long list of clients and said that if DH did work for any of them he would be sued. DH had signed an agreement, but its thrust was that he could not give away any proprietary information. We talked to an attorney who told us we could blow off the guy, so we did. We actually did some work for the same owner when we formed our company.
As an engineer, I’ve been asked to sign non-competes at most jobs. In one instance, at a startup, with less than 20 employees, I was able to negotiate some of the provisions. In the other instances, if I wanted the job, I had to sign HR’s forms or they would have found someone else to fill the position.
Back when I started working as a programmer in the 80’s I remember non-compete agreements were pretty common. Then I took a business law class and learned they weren’t legal here in California. The lawyer teaching the class said no company can deny you the right to make a living.
Last time I saw a non-compete clause in a contract might have been the late 80’s…
On the other hand, non-disclosure agreements are standard
I work in healthcare and a noncompete clause is included in the contract for all new physicians. They cannot practice within an x-mile radius of the facility for x-years following a voluntary separation. There is a buy-out clause for an amount that is usually no less than a year’s salary.
As others have noted, these agreements are becoming common for jobs where ten years ago you never would have seen them. It is important to remember that even in states where they are permitted, they are frequently deemed void by courts. Generally, to be enforceable the agreement has to reasonable in geographic scope, reasonable in duration, and protect a legitimate interest of the employer (a non-compete signed by a sandwich maker would never be enforced in many states). Many people think that if they signed something, they are stuck - not true. And employers are counting on their employees thinking that.
I see both sides. I also work in tech and have signed a few. I carry my laptop home every night load with years of code paid for by my employer. There’s a lot of trust involved! I would never steal/sell it, but a large chunk of the IP is in my head. If I worked for a directly competing product it would be difficult to avoid leveraging my prior work/experiences.
@ucbalumnus Yes, it could be a problem in a larger company. My company is not even 100 employees currently and occupies a very specific niche.
Given current circumstances, I would only see this enforced if an employee left on bad terms to a direct competitor, or tried so start up something stealing our current clients. We’ve had people leave on good terms to companies that would be in a grey area and it hasn’t been enforced. And that’s in a state that would be more likely to be favorable to such an agreement…
