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Microsoft

Non-Competing With Microsoft 198

Posted by michael from the flipping-burgers dept.
MrWeird writes: "I just found this and this over on Yahoo News. Apparently, Microsoft has been threatening a startup called Crossgain to sue them about noncompete agreements of former MS employees they had hired. The company had to let go 25% of their staff including CEO and two founders, all former MS employees. The second Yahoo article has a good point about how to MS, "the competition" is almost every software company out there." I don't think Microsoft's actions make much difference in the larger scheme of things, but I found this interesting because so many people sign non-compete agreements without really thinking about the consequences. Have you signed one? What do you expect to do when you leave your current job?
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Non-Competing with Microsoft

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  • First, always read employment contracts before signing them. If an employer doesn't want to give you a chance to carefully review the contract or have your lawyer look over it, assume they're trying to pull something sneaky. If you think you really must sign a non-compete, make sure it's very limited in scope.

    If you work with computers, chances are that it's very hard to find a job doing the same thing you do now without it competing at some level.

    For instance, most of my work over the past several years has been building stuff for use on websites. With a broad non-compete, that means the competition is any company that has any kind of website at all (since the competition is for user attention). There's no way I'd sign an agreement to not work for companies with websites for 2 years after leaving a company; I'd be out of work for 2 years.

    Currently I happen to work for a dating site. If the offer to work at this dating site had been attractive enough, I might have been willing to agree not to work for another dating website for 6 months after leaving.

    Also, overly broad non-compete agreements probably won't stand up in court because they can restrict you from working in your chosen field at all. So MSFT may not be able to win this suit since they're regarding all software companies as competition. That kind of employment law can vary a lot between states, though; I'm most familiar with California's and I am not a lawyer.

    Assume any contract you sign can be upheld.
  • The one I have with my company allows me to do work for other companies during and after I work for my them as long as I do not sell myself as an alternative to going to the company I work for.

    Oh yeah and I have to tell them of what I do outside just out of courtesy.

    I have been doing loads of freelance work on the side and they are cool with it.

  • Microsoft has a long history of employing people just to keep the brain cells off the market. I've read articles by people who were *trying* to get fired from MS but couldn't (until, of course, they finally managed to do something bad enough).



  • Here's a thought

    With the large numbers of ex-MS employees working out there in the real world with "non-compete with MS" agreements hanging over their heads, and the fact that MS has business interests in such widely diverse fields, does this not constitute some unreasonable restriction of the marketplace?

    Practically, though, if you happen to have a good idea that builds upon MS technology and they're your employer, then it seems like you're 0wn3d. My employer cannot afford the kind of legal muscle that MS can, so I'm not as worried about arguing such clauses and having a fair to good chance of convincing a judge that my new good idea is not exactly what I was working on here.

  • Couldn't MicroBorg save a whole lot of time and trouble by just assimilating this little upstart?

    - Amon CMB
  • Let's not forget the all too important "previous invention" form. At my company they have a ludicrous amount of verbage in my contract stating that anything I make at the company is theirs... except for things I do in my spare time, not on their machines, or ideas I had before the company. So in order for me to protect some crititcal ideas I wrote a document, per their request, disclosing the generalities of my previous inventions. Now they can't claim some ideas to be theres... and if you're as earger to start a business and I think you are, then you'll want to cover your butt. Because if you suddenly make a million or more, that previous company will say "oh, gee, didn't that guy work for us, and didn't he sign that agreement? Oh, that's right... everything he developed is ours, and so is his new company's intellectual property that's related to our business." Well, not with the Previous Inventions Disclosure agreement! Get yours today!
  • Same thing happened to me....I said that I had some exclusions to the intellectual property agreement, inventions of my own. They said, document it and we'll exempt it fromt he agreement. I brought them the documentation about my inventions but they never got around to having me sign their int. prop. agmt. Now I've left. HA HA HA.
  • How does poking someone's eyes out stop him from telling others where the treasure is?

    Care about freedom?
  • "...there have been a few cases where a person has moved very far away, but the product of the second company was sold in the same market as the first..."

    I do wonder about these n-c's. I work on websites with a global audience. Technically, it would seem that no matter where I work I would be cramping my former employer's style. Practically, no-one has given me any serious grief after I change jobs.

    The last place I worked in was a small web design company in England, which paid a solicitor for a standard employment contract with the non-compete section which, after fruitless arguments, I signed.

    Some months later, one employee left and started a web design company 100 miles away. The directors weren't too worried. Then I left and started doing the same internet tech thing 40 miles away, but in a whole different country (Wales). The directors were annoyed. Another employee left and started his own company 5 miles away, taking another member of staff and a couple of clients with him. The directors had an embolism and tried to sue him, but were thwarted by threats of a counter-sue: they had left a stream of invective on his voicemail.

    Unlucky, really.

  • IMHO, I think it's a scare tactic more than anything else.

    I'm not a lawyer, but it has been my experience that any agreement that I've signed that keeps me from working for a competing organization wasn't worth the paper it was printed on. I've challenged a couple in court and had them declared null and void. Maybe the fact that I am in Canada and the law on these agreements isn't well defined had something to do with it.

    IT is an industry with serious retention problems. After all, if someone walked up to you and offered you $25K or so more money to jump ship, you'd at least consider it. N-C's a a cheap way for PHB's to try and retain staff. That is until someone sues.

    "Welcome to Earth. A division of Microsoft."
  • Actually, the ancient egyptians would entomb the architect inside the tomb upon the pharoah's death. Some would create secret exits inside the tomb, but others died taking the secrets beyond their graves.
  • Non-Compter Agreements are illegal in California - this is a "right to work" state. You have the right to work for anyone, and they have the right to fire you at any time. However, the language used in many Employee Confidentiality Agreements is legally an "end run" around the right to work provisions of the law. The courts are still sorting out how to deal with these, but no one wants to be the first cases to form the "precedent."

    As I discovered, it would be dangerous for me legally to work on any project - EVEN AN OPEN SOURCE PROJECT - that was in the field that I was working in at $PRIOR_FIRM. While the provisions in the agreement (that I signed, like a dunce) could be beaten, who has the cash to pay a lawyer to fight a battle like that?

    Take the advice offered above - read carefully before you sign, and have a lawyer look it over. I ended up paying an attorney for an hour of her time anyway - and I'd be in a stronger place legally if I'd paid it BEFORE joining that company, rather than after leaving it.

  • I signed a non-compete aggreement. It said I would not compete with my employer for 1 year after leaving. If I leve my current employer to go to work for a competitor, am I competeing or is my new employer? I always assumed I woudl have to go into business for myself to violate the agreement.
  • When AOL acquired Netscape, I was working at Netscape, and we were presented with all this AOL paperwork. After my lawyer reviewed it, there were many questions and clarifications desired. So, I red-lined a copy of the agreement and returned it, asking for one of the HR people to contact me. I left AOL about a year after the Netscape acquisition, and they still hadn't contacted me.
  • The emeperor who build it, chopped off hands of all the workers so that they could not build another building like that. This was a secret kept from the architect..and it is said, that the architect was the last one to get his hands chopped..he went back and did some trick, and to this day Taj Mahal's roof leaks drops of water during rain..It is said, no one could find where the water comes from
  • I thought that there were already a bunch of suits against Microsoft. Don't stoke the campfire if you're sitting on a dripping can of gasoline!
  • The Mongols were better at this. They used redundant security systems long before anyone else. The tomb of Genghis Kahn was built by thousands of slaves, who were then marched back to forest, where the Khan's warriors killed them all. Those warriors were then taken to a village where the Khan's personal guard killed the warriors. Anyone who had firsthand knowledge of the location was dead, and anyone who had second-hand knowledge was dead too. This also logarithmically decreased the number of people who had any contact with the tomb's builders.
  • Do you know anything more about this CA law? I have a friend there who has gotten himself in some real trouble with a non-compete...
  • The last big company I worked for required me to sign a non-compete for a period of 2 years after I left them. Since they are a big company, the don't negotiate on a whole bunch of clauses their legal department put in. I tried to get a reduced non-compete, but the hiring manager couldn't change it.

    So when I left the company, the first job I applied for checked with my previous employer to see if I was free of my non-compete. They had recently been audited by the big company to see if they had stolen anyone away from the big company. The answer came back that I was off limits for two years, and after that I was PNG amongst a whole bunch of places.

    Thanks to those incidents, I now have an even greater job doing what I want, when I want, and it doesn't directly compete with the big, bad company that rules my market. You have to play nice with the big companies in each market if you want to stay employable.

    the AC

  • Re:What's the deal? (Score:2)

    by Anonymous Coward
    Uhh, check out the company. It appears as if ALL of the founders and most of the officers worked for (more like ran) the MSN mobile division and then, quit, took the whole group and started a competing wireless company. What did they expect?
  • As far as I know, that can't happen in New Zealand. I've signed an NDA and stuff that says I won't divulge company secrets, etc. But they can't say; "after working here, you can no longer work in this field again", you can't enforce that part of the contract here in NZ.

    A lot of companies put them in, but they can't and don't enforce it. Imagine a chef who signed a non-compete agreement! I'm sorry, you can't go work for any other resteraunt again. We suggest you take up software programming.

    In NZ atleast, you can happily sign one, knowing that they can't enforce it. (Oh, and for those that say signing one is volentary, when they distribute it around and say, "sign it or pack up your desk", its kinda not so voulentary anymore).


    ---

  • Typical v. Rare (Score:3)

    by Ancient Eye ( 300895 ) on Wednesday January 17, 2001 @04:34PM (#499912)
    Most of the time, non-compete clauses are -ignored- by the company that secured them. They know as well as anybody does, that one year out of the marketplace is like never having been there in the first place

    however, in this case MS decided to pursue their contracted rights with these people... why? Is it because Crossgain actually produces something that MS fears? No, because Crossgain doesn't do anything audible yet.

    my vague guess is it's because Crossgain is so quiet about what they do, they were actually hoping to get Crossgain to stand up in court and say "we're not competing... look what we do is XYZ what they do is LMN, there's no overlap, let our people go." Unless of course MS got some inside information about what they DO do, and know that it is serious competition, then it's more old bag...

    I don't appreciate predatory corporate practice, but I also don't think that a company the size of MS has the -time- and -energy- to pick on start-ups for sheer orneriness. I guess the 3rd option is that one of these employees parted with MS on REALLY bad terms and somebody wanted to stick it to that person... *shrug*

  • Not Enforceable (Score:3)

    by Anonymous Coward on Wednesday January 17, 2001 @04:35PM (#499913)
    Usually a non-compete that is that strict is not enforceable. This problem has been around in my field (electrical engineering) for a long time and in court they usually don't hold up. They can't keep you from making a living in your profession no matter what you sign. In the case of microhole, if virtually every software company is a competitor then you cannot earn a living in your field under that no-compte. About the only time I have seen no-competes upheld is when you leave to work for the other company and you are doing exactly the same thing for that company with a similar technology. Then what is usually upheld is the use of what is deemed proprietary information (other than IP which is inforced by non-disclosure and patents). That would be like you develop a technology for company A and then go work for company B that wants to same technology on their process. You would not be able to use any knowledge gained by your experiments or mistakes to develop the same technology at company B. Everything you learned at company A from you work (remember, not counting IP) basically never happened. It is very hard to prove and enforce. Unfortunately, that little company of 80 employees probably can't afford the court fight against microshaft, which is sad.
  • (Well, there is one thing they can do -- pay you your salary for the length of the agreement, so you can sit on your ass and do nothing...)

    I've never really understood this - is this the concept behind severance pay? If so, then I understand it a whole lot better... basically, you're being paid to not go off and do stuff that'd damage your former employer, competition-wise.

    Freaky.

    Makes sense in the context in which I've seen it, which is marketing/exec types who have a lot of insight into how a particular business runs, etc. They've been given 'severance' packages that run on for years, just so they won't use their talents to ruin the company ...

  • Re:Oh yeah? That's nothing. (Score:3)

    by dhovis ( 303725 ) on Wednesday January 17, 2001 @04:37PM (#499916)
    Oh, that's just a myth. [britannica.com] The legend is that it was an Italian architect who had his eyes gouged out. In any case, it didn't happen.
    --
  • My lawyer informs me that non-compete are enforcable in Massachusetts, so I negotiate them out of contracts whenever possible.

    Many high-tech employment agreements take away your rights because they can-- a lot of fresh out of school people are willing to sign anything with at $90k salary & stock options attached, and they'll sign if you don't. So non-compete, total assignment of intellectual property rights, non-disclosure, etc. become industry standards. If enough people say "this is ridiculous," it will stop. Unfortunately, we lack a union or trade group, and tend to be a cuthroat bunch...

    Seriously, next time you're talking to an employer, don't swallow whatever they give you. Talk to a lawyer, and tell your new company that you want them to take out certain clauses. Odds are, they will. Corporate lawyers put in all kinds of stuff that they know they won't be able to get away with, but they assume you're going to be too naive to negotiate the contract. They back off as soon as you make it clear that you think those clauses are unfair.

    -m

  • You'd be suprised what you can turn up on a search engine [google.com] using keywords including "resume" plus company names.

    Maybe the people M$ suspected were up to something didn't have their own resumes on the web, but suppose a low-level employee at their company did, and listed the ex-microsoft execs as references.

    I have been told by clients who have actually signed with me to do paying work for them that they hired me because my resume on the web matched the name of some previous employer of mine they were searching for. In those cases, the clients figured that an engineer who worked at these previous companies would be qualified to do their work.

    Got your own resume on the web? Does your hosting service give you full logs, not just hit count summaries? Grep out your resume URL and look at the referring pages - in many cases the referring page URL will include the search keywords someone used to find your resume. It's pretty interesting to see what people are entering and then clicking on my resume as a result.


    Michael D. Crawford
    GoingWare Inc

  • noncompete links, etc (Score:5)

    by Alien54 ( 180860 ) on Wednesday January 17, 2001 @08:08PM (#499925) Journal
    [rant]
    After a while, Microsoft just really ticks me off

    Why don't they do something like patent pollution? Then they could sew all the polluters on the planet for patent infringement. And make a mint on the licensing fees

    I swear, every time I start to relax about MS, they go and do something to wind me all over again
    [/rant]

    Standard Disclosure: IANAL

    Excellent tutorial on non-disclosures here [webgrrls.com], and here [nolo.com]

    Non-disclosures are different from noncompetes:

    Excellent discussions on noncompetes here [infoworld.com]

    Special Note: In some states, including California, noncompete agreements generally can't be enforced against employees. The problem is that because noncompete agreements come in so many shapes and sizes, and because you've got very conflicting societal interests, the courts tend to analyze these things on a case-by-case basis, which means predictability is very low.

    There is also this interesting site:

    www.breakyournoncompete.com

    which has an agreement on the front end.

    I am sure there are others out there as well.

  • Lets just look at the other side for a minute.

    You've been given the opportunity to head up a group of 20 engineers developing a very interesting, complex, cutting edge product. The schedule calls for product to be shipped in 24 months. Eighteen months into the project, 10 members of your team tell you that they just got this great offer from Mega Code down the street. Better pay. Signing bonus. Sorry. They really liked working here, but they've gotta go for the money.

    Your schedule, product and possibly company just walked out the door.

    How do you keep that from happening? Pay more? How much more? Employment contract? Options? Free sodas? Non-compete?

  • I Could Tell You, But ... (Score:3)

    by Aaron M. Renn ( 539 ) <arenn@urbanophile.com> on Wednesday January 17, 2001 @04:13PM (#499929) Homepage
    I could tell you if I have a non-compete agreement with my employer, except that I'm under non-disclosure. Actually I don't know if I'm allowed to disclose the fact that I can't disclose anything. Hope the boss doesn't read /.

  • How do they know? (Score:3)

    by Darkstorm ( 6880 ) <lorddarkstorm@h[ ]ail.com ['otm' in gap]> on Wednesday January 17, 2001 @04:46PM (#499935)
    What got me from reading the article is that yahoo didn't have any idea what they were doing. So if it isn't know what they are building...how does M$?

    If M$ is snooping into "corporate secrets" could M$ be taken to court for theft or something. I have a non-compete agreement with my employer, but it only appllies to things I do for them. And it was modified to stipulate that previous work I did was exempt from this agreement. With a small company that does not do allot of different projects I saw this as no problem. I don't think I could bring myself to ever work for the borg though..ehhe

  • contract law? (Score:2)

    by Anonymous Coward
    You sound as if any two parties could contract anything and that such contract would be valid by default.

    "If you shoot yourself through the head, I will pay your heirs 1 million dollars."

    Do you think the contract above is valid?

    Non-compete clauses are not necessarily valid either. If we can assume that one party (Microsoft) had substantially more freedom to set the terms that the other party (employee), such clauses are most likely invalid, and the contract unenforcable.

    The law is not a means to confirm an existing balance of power.
  • Man, that would be a bitch!

    "Fred, how's it going on the new project? I've been hearing really good things!"

    "Oh, great boss! We've actually finished up the closed beta last week and are starting public next week. We are 2 months ahead of schedule and $30,000 under budget. Feedback from the beta along with marketing's assessment has been _really_ positive. Man, this is gonna be the killer app to end all killer aps!"

    "Great! Now that the project is essentially complete, will you please come down to HR with me? Oh, it's just a little formality of company policy and has to do with the non-compete clause you signed when you started this job. Only take a minute or two..."

    Ouch!
  • Unfortunately, in MA, they are enforceable.

    Also, check out CNN's article on http://www.cnn.com/2000/CAREER/trends/11/20/contra ct/ [cnn.com] contracts and non-competes today.

    -m

  • This just goes to show, that you should be reading the WHOLE document before you sign your rights away. If you don't understand what you are signing, then WHY are you signing it?!

    Some industries have non-compete clauses up to 2 years which I think is a bit excessive.

    If there is a non-compete clause, just ask them to lower it! Mention that you need to be able to support yourself, and ask for 6 months (or less)

    If you don't try, it won't get changed.

    --
    "The issue today is the same as it has been throughout all history, whether man shall be allowed to govern himself or be ruled by a small elite." - Thomas Jefferson

  • In a number of court decisions in the early 'sixties, non-compete agreements were held to be a form of involuntary servitude - slavery - in many cases. If you work as an ordinary employee and leave to work as an ordinary employee with another organization, non-compete claims are probably invalid (bear in mind IANAL), but if a senior manager leaves and starts another company in the same line of business, non-compete may come into play.

    But, if the first organization is very large, say, um, Micro$oft, and the manager is not obviously using some key technology from his first employer to make the second company work, he needs to raise the hue and cry of involuntary servitude.

    In the cases cited here, a lot of people need to bring this to the attention of the press, the U. S. Labor Department and the U. S. Department of Justice, as well as the state Attorneys General where these people live. It would be very interesting to see what the State of Washington's Attorney General might have to say about this.
  • I had a non-compete clause in a contract that I signed. I left the company to become a consultant. One of my gigs was going to be on the software that I'd just written 6 months earlier for one of their customers. I wound up taking the gig after talking to a lawyer. He said that judges take a very dim view of restraint of trade. My non-compete contract didn't have limitations on geography or a reasonable duration (it was two years). This was just about the time that a judge ruled that that such a long time duration was not acceptible or reasonable in the internet age.

    I didn't have any problems with the other company, but I didn't tell them and asked my client to not specifically mention my name.

  • The legality is irrelevant. (Score:3)

    by Monty Worm ( 7264 ) on Wednesday January 17, 2001 @04:47PM (#499952) Journal
    (Just been re-reading Cryptonomicon, and this reminds me of a passage there. Epiphyte gets sued by Tje Dentist on a pretence, and they make it go away by selling him stock)

    This is not Microsoft expecting to win a legal challenge - this is Microsoft banking on the knowledge that their lawyers are bigger and scarier than yours.

    This isn't law, this is legal intimidation. This is abuse of a position of power.

  • Somehow I think MS's barrel-o-lawyers probably concocted a more legally-sound non-compete agreement than the paper-thin ones you speak of. Then again, due to the same massive legal force, one can only assume that they would be quick to settle a dispute of such a nature given:
    A: The large expense of waging such a battle and...
    B: The small chance that their contract gets ruled null/void and they have to stop their overbearing practice, thus injuring their ability to retain current staff.

    Basically, I bet the contract is OK legally (unless you were to go to a federal court / state supreme court or something and question the constitutionality of someone claiming ownership of your skillset within a certain field), but these folks (the fired ones) could still make a nice dollar or two off of the kind folks at Microsoft for their part in the employees' dismissal.

  • Re:Perfectly right to do so (Score:2)

    by Anonymous Coward
    BS. Most employment contracts are not even shown to the employee until after they have agreed to take the job. I didn't see mine until I started. It had enough of the standard odious stuff in it that I refused to sign it. I took it to my manager and he said he would sign such a stupid document either. But the point is that I was fortunate. Most employees are pressured into signing these things as a condition of employment after they have burned their bridges! This is not reasonable nor particularly legal contract behavior. It amounts to coercion and to whatever the term is for an invisible contract after the fact. Also, contracts that specify things that are not really legal in the state or context are not binding.

    It is true that people should read these things. But a lot of people will not understand them when they read them.

  • Re:Severance Pay? (Score:5)

    by thex23 ( 206256 ) on Wednesday January 17, 2001 @04:53PM (#499957) Homepage
    I think severance packages are sort of a "goodbye kiss" in the professional world. Kind of "we'll miss you, we can still be friends, let's not hurt each other, ok?" with stock options and such.

    The head geek at a notorious gaming company I used to work at got a BIG FAT kiss off. They gave him pretty much everything he asked for, and he asked for a LOT. He even asked for the hundred-odd AAA batteries he had in his office (I think it was for a Palm or something).

    A not-so-31337 geek left the same company about a month later. They sat down and asked him what he expected in his severance package. He said "I think I'm worth around half of what [head geek] got."

    They laughed him out of the room. Laughed out loud. I believe he got SFA for a package, as a matter of fact.

    What have we learned here? That people who can help you the most, that are the most valuable to you as partners, are the ones you try REALLY hard to keep happy when they leave. Because they know your secrets. And they probably went to school on how NOT to run a company by watching you (the management) fuck up over and over again...

  • Someone has a broad paintbrush (Score:3)

    by Outland Traveller ( 12138 ) on Wednesday January 17, 2001 @04:54PM (#499958)
    Yes, you have a point that you need to read contracts before you sign them. However, the situation is not nearly as as simple as you make it out. Often a individual worker (yes, even a technical worker) negotiates from a position of weakness.

    The company will get along just fine without you, but you may find yourself in serious difficulty without work. There are things you can do to lessen this equality, such as look for new jobs before you've left an existing one, but the fact remains that large numbers of people do not have the luxury of negotiating employment contracts.

    There aren't any strong unions or even trade organizations in the technology sector, as their are in other more mature industries, to overcome this fundamental inequality. So yes, it's a noble idea that you don't have to sign a contract you don't agree with, but it doesn't always work that way in practice.

    Just because some people are temporarily enjoying high salaries and a scarcity of competition for their jobs doesn't mean the system actually works.
  • ...and should be avoided at any costs. Myself, I haven't signed a non-compete nor will I ever.

    I work at the local ABC affiliate. About 2 weeks before New Years' Day 2k, we were told that there were going to be 16 people laid off at the beginning of the year because of a sales agreement with the NBC affiliate. I wasn't present in the room myself, but I was told that all 16 were brought into a conference room and coerced into signing non-competes. Some of the 16 (I think all but 4 or 5) were hired by the NBC affiliate, but the rest either didn't want to work for them or weren't wanted. One of those people wanted to apply at the CBS affiliate afterwards, at which time they were turned down because of the non-compete. He told me that he was under duress to sign the non-compete and that he was going to take them to court, but I don't know if he actually did or not.

    Moral of the story? Don't sign non-competes. Period. Even if it means you have to look somewhere else for a job.
    _______
    Scott Jones
    Newscast Director / ABC19 WKPT
  • ...plan to replace all those guys who are leaving because their stock option are worthless.

    Now you have to wonder when you sign up with Bill and Steve whether this is the last company you'll ever be able to work for in your profession. That should solve all their recruitment problems.
  • I have a non-compete agreement, but there's some important clauses:

    - the agreement doesn't count when I'm fired
    - the non-compete is very, very narrow. I am bound to a radius of 25 km, in which I can't find a similar job (ok, better defined in the agreement, but you get the drift)

    the 25 km was interesting.. I work at a local ISP, and there's not much else in those 25 km. however... there's more companies located at 26 km, and my boss won't have a problem with me going to work there (this is specifically why I was quite happy with the 25km clause)

    //rdj
  • Ah, so that's what happened. I just say this because one of my former employers used to have a Prime mini-computer cabinet - big thing - they used it mainly as a rack mount cabinet. Was beige, with a red strip across the top in front, with white lettering reading "Big Red" - I still don't know what that means...

    Worldcom [worldcom.com] - Generation Duh!
  • These people wasn't on crack when they signed their contracts, right? They knowingly did this, so what's the problem?

    Imagine you run some company, and hire a bunch of developers. Then you take some project for R&D and give them to implement. And then they see that this project is probably worth a lot of $$, so they turn around, take the half-baked project with them (including a lot of investment that was put in it before it got to them) and make a startup to sell someone else's ideas just because they think they are too smart to play by the rules. I guess you'd be pretty pissed off on such scenario?

    The fact that on side of the deal is Microsoft doesn't give the other side right to breach contracts and try to sucker its partner.
    The people knew they are going to work for Microsoft and what signing non-compete with Microsoft means. So why they are crying now? They should start crying *before* signing, then it would make sense, not after working, getting money from MS and then deciding they are better off.
  • I worked at a startup here in San Jose that was basically the development team of another company who were tasked with designing a product they ultimately turned into the business plan for their new company. If this is the case (as it probably is, considering their dot.net'ish webpage) then microsoft is in the right to get after this startup who probably stole wholesale a microsoft project.

    Read what you sign, and know it's reprocussions. If you don't like it don't sign it. Nobody is holding a gun to your head, if you don't like the arrangement then walk away. But if you do sign it then live up to your end of the deal.

    -- Greg
  • Do you really read (and fully understand) every contract you're forced into? I think not.

    And what the hell does contract law have to do with democracy? Capitalism/Corporatism maybe, but not democracy.
    Cheers,

    Rick Kirkland
  • It's not my case, but...
    just imagine that someone has been working for MS (or any other company by that matter) and has signed a non-competing agreement.
    Then she decides to quit the company, start working on an unrelated thing (a restaurant) and be actively involved in an open source project (like Gnome) in the free time. Would that be allowed in this kind of non-competing agreements?
  • Actually, it's just within Microsoft's interest to try and find some what-looks-to-be-legal way to file a lawsuit. Frivilous or not, basically, no matter what Microsoft is suing you for, they have more money than you do to keep up their legal team.

    It's not like in Britain, where if you sue someone and lose, you pay both parties legal expenses. Lawsuits hurt win or lose, especially when one side can crush you like an ant.

    The mere threat of a lawsuit is enough to get a company to change their tune (unfortunately)

  • Back when I was in the computer field, I flat out refused to sign it. It said that if I quit that I wouldn't go to a competitor and work for them (because fear of losing secrets). I simply told them "No". Why didn't they fire me on the spot? I was too valuable for them to fire me.

    You know, if everyone at microsoft would have refused to sign that document, microsoft would have had to fire everyone or rethink that policy. too bad no one had the cajones to stand up for their rights.
  • I believe it is going to vary a bit from tech industry to tech industry... If you work for Intel or AMD on CPU design there are pretty strict terms about not going to the competition since you have such a level of proprietary knowledge.

    The case of non-compete against Microsoft is interesting though, from a practical standpoint what is one suppose to do... not develope any software for anything short of a mainframe.

  • Not MS's Fault but an Important Issue (Score:3)

    by ZanshinWedge ( 193324 ) on Wednesday January 17, 2001 @05:35PM (#499983)
    Non-Compete agreements are rampant in high tech. And a lot of people sign them without even thinking about how it will affect their careers. Even if you get fired that non-compete agreement is a binding contract. If that non-compete agreement is too broad then it can really hurt someone's career (since most people these days won't stay at one company forever).

    I haven't let myself get bound by non-compete agreements yet, but doing that has meant making sacrifices on my part and in many cases it would have been easier for me to just go along with things and maybe live by the agreement or just assume "they'll never know". It's a tough decision to make, and one I'm certain most techies (who often lack sophistication business and legal wise or more accurately do not care about it as much as they do the tech) have not put enough thought into.

  • Not your normal start up (Score:5)

    by hakioawa ( 127597 ) on Wednesday January 17, 2001 @05:36PM (#499984)
    Crossgain was not your normal startup. It was started by a couple of heavy hitters from M$FT. Basically some of the chief architects of ther XML/.NET strategy. They built it for Microsoft, then left and took a bunch of thier developers. Basically they were (are?) building an outsourced XML integration server (kinda like BizTalk server) on Sun/Java/Oracle kit. Not real Microsoft friendly! Bill said NIMBY (Not In my Back Yard) and squished them like a bug. They have about $10m in funding and unless they get more from Sun the well has dried up. No VC fund will touch these guys with a 10 foot pole.

  • Non-Compete agreement connected to stock options (Score:3)

    by Shanes ( 141586 ) on Wednesday January 17, 2001 @05:49PM (#499987)
    I joined a startup this summer and got a pretty good deal with lots of stocks and didn't have to sign any non-compete contract. But as the company grew the board suddenly saw the risk and when it was time for handing out stock options to all employees they added a 6 month Non-competing clause (after quitting) for receiving the options.

    The options deal weren't that good (compared to the stocks I already had) so I was close to not signing it. But as I realized I would be the only one saying no to "free" options I signed it just to not look disloyal and likely to leave. Just to not rock the boat, I guess. Still not sure if I did the right thing.

  • The key points in successfully enforcing a noncompete are scope and time. Saying "you can't work at all for a year" is ridiculous. Saying "you can't work at all IN YOUR FIELD for a year" is considered equally ridiculous. What are these guys supposed to do, wait tables?

    The key points apply with, say, sales staff or whatever. If a sales guy for a regular company is leaving and has a noncompete, one good way to draft the noncompete is to say that (for instance) the guy can't take with him the clients within a ten mile radius for six months. After that he can try for 'em but he can't go straight to a competing company and drop by the clients going "Hi, me again. We'll still be covering your needs only you may notice a different name on the trucks".

    The limitations (10 mile radius, six months) are what make the noncompete have serious teeth. Big arrogant noncompetes are routinely considered invalid contracts. Sure the guy signed it but the court would laugh at the company making it. I think it's simply the threat of MS lawyers and the _costs_ of litigation that have stomped this startup company. That is bad too, but don't confuse it with 'the noncompete forbade them from working for the startup!'. There's a great deal of case law, apparently, to show that overblown noncompetes don't even work and get thrown out by the court. If you want to draft a noncompete that does actually work, you limit things quite drastically and leave loopholes that you can still compete with even if the departing person takes advantage of the loophole (such as outside the ten mile radius- fair enough- or waiting six months before going after his former clients, by which time you've solidified their relationship with a new sales guy, right?)

  • is that many, as far as I know, are not enforcable under the law.

    In order to be enforced in court, a non-compete must, among other things, not take away the person's ability to make a living in their chosen profession.

    From what I recall of the advice given to me a few years ago, non-compete clauses usually are only truly enforcable when it comes to upper management and other strategic positions where defecting to another company makes you unreasonably dangerous to the company you left.
  • It would only be persuasive if it turned out that the MS noncompete agreements were really specific. Like, "You cannot work programming groupware that includes email AND messaging AND scheduling ON a GUI and FOR the Windows platform FOR six months".

    Something like that, the noncompete (specifically written for each employee, mind you) would have real teeth.

    "You cannot work for our competitors for a year!" is worthless. So it's a question of, were the Microsoft lawyers being sharp when they wrote these up, or were they being arrogant? If they were being arrogant and wrote them in general terms or anything resembling boilerplate terms then the noncompetes are worthless.

  • Well, actually, you ARE allowed to do just that.
    Yes, their intellectual property, in the form of confidential company information, is theirs, and you must protect that.

    But the fact that you boned up on your perl skills while working for them (or any other skills, as you always learn more, right?) does not mean you cannot practice those skills elsewhere.

    That's like telling a Jr. Mechanic that he can never leave your garage and go work for someone else, simply because of his on-the-job experience.

    There is clear case law, I believe, that makes most non-compete clauses for grunts, programmers, etc, unenforcable.

    I know here in Canada (and I'm sure I've seen the same in the US), just because something is written down and signed does not make it any more legal.. it still must follow the law, and the law says you are allowed to work.

  • I only speak from a Canadian perspective... but..

    I hear all these peopel saying 'don't sign it..' or 'you signed it, it's your fault'. Well.. up here... it's like this.

    1) it's common knowledge that these non-compete clauses are compeltely unenforcable, and in fact, basically illegal. you have a right to work in your trade. Many states are like this as well.
    2) Every IT company has a damn non-compete clause, for some odd reason. so..
    3) You just sign the damn thing, and then ignore it. Nothing they can do about it.

  • And there's always something - Not a single company in Silicon Valley complies with California's 40 hour work week law, for example.)

    There is no 40 hour work week law in California, that's why. They changed that so that non-exempt (Salary based) employees do not have the same 40-hour (FLSA) week that everyone else does. This is pretty isolated in the tech industry however.

  • Better pay and a really specific noncompete.

    Like "You can't work as a programmer on a project involving all of the following (feature X, feature Y, feature Z) for four months." You can go to a competitor and use _part_ of what you've learned on this big complex cutting edge product, but the nonco gets really specific and is obviously designed to stop you from walking off with the WHOLE project in one big lump. Anyone trying to acquire your team will have to either sit on their hands for four months, or shuffle the whole team with managers programming and programmers testing and testers managing, or pick only _part_ of the feature set and do only that.

    That would hold up in court, but any of the loopholes results in an inefficiency- the 'raider' would either not be delivering the full feature set, or would be immediately shuffling jobs and having everyone working away from their core areas, or would pay the people to sit on their hands for four months. However they _are_ allowed to try any of the three, and this is why they can legitimately be forbidden from snatching up the whole damn project team and saying 'Cool- finish it and _we'll_ ship it.'

  • Yes, because it's not employment or work insomuch as the law is concerned.
  • Do the noncompetes specifically outline .NET? If they aren't really specific (like 'thou shalt not exactly duplicate what WE have you working on' and _specifics_ on what that is _and_ a shortish time limit) then it becomes Microsoft's problem to keep these people, not the contract's.

    I think the underlying question is, why did the chief architects and half the developers for .NET feel they had a better chance with a rickety little startup competing directly with Microsoft- than staying with Microsoft? In a way this is one hell of a warning siren, and not about noncompetes. MS is _that_ bad off that the insiders are beginning to flee in organised groups to _compete_ with Redmond? Isn't that against the conventional wisdom? What do they know that emboldens them this way?

  • "Talk to your lawyer" is the good advice that most people don't take. You're *probably* okay if you read the contract and understand all of it.

    If it "turns off" the prospective employer, it's a prospective employer that's trying to pull a fast one on you. Prospective employers that seem "turned off" by you wanting to review your contract are the ones you really should hire a lawyer to review the contract before working for.

    In other words, if the prospective employer has any kind of problem with you reviewing the contract or having your lawyer go off, that should set off all sorts of warning bells in your head.

    If you don't have a contract then you have the default employment. Work you do for the company is a "work for hire" that they own. (including owning the copyright) Whether they can fire you without cause depends on what state you're in.

    My employment contract includes the ability for them to let go of me at any time for any reason. Since it also doesn't specify any kind of notification period for me quitting, I don't have a problem with that. And there's no non-compete clause. For that matter, it explicitely mentions that anything I do on my own time with no use of any company resources I own. Since I'm salaried, without a contract stating otherwise, that can be an issue.
  • Unless of course MS got some inside information about what they DO do, and know that it is serious competition

    More likely, they just want to get some publicity for the fact that they do have competitors. Dubya will be in the white house soon, and he has the power to be a good friend to large corporations.

  • In common law it is called "Restraint of Trade" and in general a contract that seeks to do this is unenforceable. But there are exceptions to this general rule [oraclelaw.co.uk].
  • You won't find out a lot about Crossgain if you go to their Web site [crossgain.com]:

    At Crossgain we are laying the foundation for the next generation Internet. Radically simplifying how people build and deploy applications on the Web, we are solving problems that others think are impossible.

    In the coming weeks, you'll be hearing more about us. A lot more. It will be worth the wait.

    (Their job listings [crossgain.com] are pretty discrete, too, though they mention Unix a lot of times and Windows only once.)

    Somehow, Microsoft knew enough about what Crossgain was doing to decide they were competing. I wonder how? Did they sign an MSFT non-diclosure agreement that got disclosed internally? Did a 'softie interview and then report back?

    Or (as Cooper implies in the second Yahoo! article) has Microsoft decided that former employees can't do any software development (or anything related) at their next jobs, because anything would compete with something Microsoft does or might do? If you quit Microsoft, you can't do anything for a year more technical than flipping burgers?

    More info on Crossgain: a story on c|net [cnet.com] and a blurb [barksdalegroup.com] from a company that gave them $10M.
  • Tx is one and these employement agreements that many sign (i did when i was fresh out of school) are worthless. you should see if you are employed in a Right to Work state, which basically means that employers can hire/fire you at will and you can work for almost anyone you want at any time.

    i work for a huge fortune 200 company right now and when some of our competitors tried this crap we took 'em to court and easily had it thrown out.

    one thing to note that always sucks, when these companies sue, they sue the former employee and the new employer...sometimes the new employer won't want to pay the cost of lawyers....

    BTW - IANAL!!

  • He He... you should've posted that anonymously.
  • Currently MS non-competition agreements only apply to areas where the indiviual not only is competing with Microsoft but also had recieved confidential information on the products, such as trade secrets. Enployees are required under the contract to show subsequent employers at least this clause of their employment contract.

    One hopes for Microsoft's sake that this is how they are enforcing the contracts. Other interpretations would probably be illegal under sections I and II of the Sherman Act. We all know Microsoft has to tread with care where the Sherman act is concerned.

  • Then again, who wants to spend 15 years of his life in court?

    Judge Judy?

  • Re:Regional? (Score:4)

    by lrichardson ( 220639 ) on Wednesday January 17, 2001 @06:03PM (#500016) Homepage
    Non-competes are a strange beast, legally. For many businesses, the n-c has to be restricted to the local area. However, there have been a few cases where a person has moved very far away, but the product of the second company was sold in the same market as the first, and the n-c came up in court. It used to be that if the courts found even one term in an n-c contract invalid, the whole thing was declared void. If, for example, it could be interpreted as denying you the right to earn a living anywhere while working in your field. Or the area was considered too large (yep, 15 miles is a reasonable for a beautician n-c, 16 is not! ;) (Spas, BTW, are becoming infested with n-c's, too).

    I worked for a company that hit me with an n-c a few months after I started. (Which, btw, violated the terms of my contract, but anyway). The sad thing was it had like 27 different points on it, of which 3 were totally illegal, and were actually case examples from one of my first year law courses. Let's just say head office was still living in the sixties.

    The main point of n-c's these days is the threat factor. It may be illegal ... but what individual has the money to fight M$ in court?

  • Do that many people actually wind up signing contracts that contain non-compete clauses?

    Granted, I probably haven't been working in a field lately where my going to another company would threaten any trade secrets. In fact the last time was back in the '80s when I left an employer and there were maybe two other companies in the U.S. that would have found my experience (in GPS) useful enough at the time to want to pick my brain. (Oddly, my new employer did hire me because of that experience -- and for real-time software development -- but in a research environment so I guess my former didn't feel too threatened. They didn't squawk, anyway.) We did discuss non-compete issues during exit interviews though I'm sure this was done out of habit due to other sections of the company doing business in areas that had much more competition.

    More recently, the closest thing I've experienced was a clause in the employment agreement as a consultant that stated that I would not work for a client for some period of time (at least a year if memory serves) after leaving the consultancy. (They actually decided it was a good idea to sue a client for stealing someone away from their employ -- IMHO, not exactly a stellar PR move.)

    Now I have heard of some cases of Big Five/Six/whatever accounting/consulting firms luring away high powered consultants, partly because of these consultants' rolodexes. And legal proceedings sometime result because the former employer sees that rolodex full of contacts as its IP. Most of the time you hear about these non-compete suits being brought about against high level execs who leave (and take people with real talent with them).

    I've heard about many folks who have had judges toss out the cases brought before them over non-compete issues. From what I understand, it helps to have your wife and children sitting in the front row (having them weap doesn't hurt) -- I've never been sure if the guy who told me that story was kidding or not. Apparently, judges are not fond of telling someone that they can't work in their chosen field:

    ``So what did you do before you got into the septic tank game?''

    ``I used to write C++ for Microsoft and a judge said I couldn't do that anymore.''

    With the popularity of the Internet, chat rooms, and other communication tools out there, how a company thinks this enhances their position is baffling. Having trouble hiring and keeping good employees? Ever wonder why?



    --

  • So a bunch of ex-MS employees ended up at a competeting company, MS found out and said "Oh, by the by we had an agreement with these people who said they wouldn't work at a competitor so they are going to have to go or we will go after them in court"

    Is that right?

    This sounds sort of like the kind of mess that happens when you have tech workers who have to sign off on NDA's every other day just to do their work because of vendor realtionships and partnerships and crap of that nature.

    Too much legal stuff happens in our sector if you ask me.

    http://www.nonmundane.org/
  • I've worked at MSFT, through a contracting firm, and MSFT is part and parcel of this problem. If they insist on non-compete agreements themselves, either directly or with a sub-contractor, then they have only themselves to blame for the problem.

    That said, I think non-competes are pretty much a waste, as opposed to non-disclosure agreements, for anyone other than senior execs. You just shoot yourself in the foot for future referrals and good will.

  • Doesn't Mitnick have a non-compete clause with the NSA?

    Anyway, here's some good starting points [monster.com] on your journey to career nirvana.

    Dancin Santa
  • When I was presented with a non-compete, I requested a meeting and pointed out the parts which were unacceptable (non-compete for two years).

    A non-compete agreement is very asymmetric. They ask you not to work for X years after you quit, for which you pay a price by not being able to work in your main area of competence. The employer on the other hand has an interest in making the period as long as possible and has little or no cost in doing so.

    So to ensure that the non-compete agreement was symmetric and that time was really justified I told them that six months were ok, and that beyond that they would have to pay me a thousand dollars for every month they wanted me to not-compete.

    They verbally agreed to it, but in the end I was never asked to signed anything...

  • I'm not a lawyer, but I play one on the Internet (Score:5)

    by imadork ( 226897 ) on Wednesday January 17, 2001 @04:19PM (#500032) Homepage
    I've been told that non-compete clauses are of dubious legality, at least in my state (NY).

    The way it was explained to me, your employer has a right to expect you to not give confidential information to a competitor, even after you are no longer employed by them. But no contract can take away your right to an honest living in your trade.

    For instance, if you take code or business plans with you to a new employer, that's a no-no. But if you just take your Mad Perl Kung Foo, well, there's nothing your former employer can do about it, even if you are going to a competitor. And even if they paid for training to develop your skills. You own the general skills; your employer owns the actual work that you did for them. (Well, there is one thing they can do -- pay you your salary for the length of the agreement, so you can sit on your ass and do nothing...)

    And if they threaten nasty stuff, get a lawyer and give it right back to 'em: in most cases, those agreements aren't worth the paper they're printed on.

  • If M$ is snooping into "corporate secrets" could M$ be taken to court for theft or something.

    That depends very much on the methods they're using. Poking through someone's trash (once the trash is on public property, so you're not trespassing) is legal. (Thus, most large companies place a high priority on proper disposal of confidential documents--e.g., shredding, burning, shredding and burning.) Tapping someone's phone is not. There are quite a few ethically-questionably-but-clearly-legal methods that corporations can use to find out information about their competitors.

  • Back in the last century, I was working for a defence contractor that was putting together a proposal in response to a DoD RFP for some work involving space systems, L-band communications, spread spectrum, etc., etc. Rumor had it that we had essentially won the competition for the work but lost out when the DoD decided that they didn't want to have `all their eggs in one basket'. Perfectly reasonable, actually.

    As it turned out a major, Texas-based electronics company (don't want to give it away) had won the contract. Guess who ran a full page ad in the next weekend's local Sunday newspaper looking for electrical engineers with experience with ``space systems, L-band communications, spread spectrum, etc.''. Was really funny. AFAIK, no one quit and went to work for them but it certainly would have been interesting how the company's non-compete clauses would have held up. This was defence-related work of a classified nature and there aren't a lot of players in that ball game.



    --

  • "What, the term that says we own everything you ever think of while you work for us, even if it's a recipe for cookies? The one that says you must never sue us? The one that says we can claim the money off you if you make a mistake that we feel loses us money? Those are perfectly standard terms. Any contract would have them; they're normal throughout the industry. Don't be so unreasonable and difficult; show a little trust. Sign."

    *Don't* sign. Those terms are not normal. I have had contracts modified before starting work because the terms are overbroad. My current contract does not contain any overbroad terms (and I had that clarified too). I recently read my flatmate's contract and it contained no overbroad or nasty terms. Don't let an employer fob you off with this nonsense; nasty contracts are a sign of contempt for the employees and if they're not prepared to fix the problems, if they expect all the trust to be on your side, then you don't want to work there. Look elsewhere.

    I've never been shown a contract until after informal acceptance of an offer myself, but *next* time I'm going to insist on seeing the contract before coming to a second interview. I've seen some incredibly nasty ones, and I don't want to get my hopes worked up about a job I find myself unable to accept.
    --

  • In Europe or at least here in France, contracts like that , are a sword that cuts bot ways.

    Since we have a document here calle the bill of human rights, anybody has the freedom to work. And that right is god damn above just any law there is.

    However, If Microsoft would deside to hold me to the contract I signed, the standard procedure is to get a lawyer, take them to the courts and hold them responsible for taking away my right to work.

    They would then have to pay me for 5 years (or whatever time period the contract stated) for not being able to work for the competition.

    However, I would be perfectly free to work for whomever else I would choose, 100% job, all perfectly legal, and there isn't squat MS could do about it.


    --
    Why pay for drugs when you can get Linux for free ?

  • I went to work on a one-month contract doing software evaluation for a firm. I was reading over their employment form and voila, a non-compete section. I asked the hiring manager about it ("1 months of work and I can't go anywhere for a year?") and he said, "Oh, that's boilerplate. Never mind that" and we crossed the section out, initialed it, and it was done. I'm still there (it's been 4 months now), but knowing that it will never rear it's ugly head is reassuring.

    The moral? BEWARE OF BOILERPLATE! Even in the most tame circumstances, things like that slip in. Read what you sign.

    (I'm not sure if crossing out a section and initialing it really nullifies it, but my father's a lawyer, so if it gets ugly, I might have a chance at receiving justice)

  • Non-competes, the good and the bad (Score:3)

    by platos_beard ( 213740 ) on Wednesday January 17, 2001 @06:10PM (#500046)
    When I accepted employment by a start-up some years ago, I signed a non-compete, but not without consulting a lawyer, who made a few changes in the length and breadth of the agreement.

    From what I learned then, such clauses have two competing features. First, its difficult to enforce them. A contract which takes away a persons ability to earn a living is invalid. That's the good news.

    The bad news, as pointed out by my attorney, is that the threat of legal action itself may be a deterrent to getting hired. No matter how narrowly the clause is written, it might be construed by a potential employer as a lawsuit waiting to happen, and whothehellwantsthat.

  • Re:Don't sign a non-compete (Score:4)

    by sudama ( 22433 ) on Wednesday January 17, 2001 @05:21PM (#500047) Homepage Journal
    I turned down a job offer 2 months ago because the contract had a very broad non-compete clause which said I wouldn't be allowed to work within 12 months of leaving for anyone in any industry in which the company had a business interest. The company? AOL Time Warner.

    I also had a problem with the proprietary rights clause which meant that everything I did on company property or with company resources would be copyright AOL. Sexy emails to my wife, scribbles on a notepad.. anything subject to copyright wouldn't belong to me. Why do people accept this? Isn't it enough to say that any work I do within the scope of my job responsibilities belongs to them and leave the rest to me?
  • If you think non-compete with Microsoft is tough, imagine non-compete with IBM (and of course any affiliates ;-)! The company I worked for was bought out by IBM and one of these lovely non-competes floated my way.

    I feel for people in this situation. Big IP based companies have a vested interest in having as wide a non-compete agreement as possible. There is also a strong disincentive for them to motive the legal terms of the agreement just because one person won't sign them (the legal bills for having to go over modifications alone are horrendous). My non-compete finally did get modified (by myself) but only after I was told by several company officers and lawyers that, "it couldn't be modified in any way."

    Now, from what I was told by my own legal counsel, non-compete which are overly broad are tough to enforce, because they cannot be used to prevent people from finding gainful employment. Also, if you can demonstrate that you signed the agreement under duress (i.e. "We will fire you if you don't sign it.") they are not legally enforce it. So there are ways to get around them.

    So, more than likely, there WAS something fishy about what this company was doing, otherwise Microsoft wouldn't have been able to excert this kind of leverage on them.

  • Ask for Any Contracts Up Front, Consult Attorney (Score:5)

    by goingware ( 85213 ) on Wednesday January 17, 2001 @06:35PM (#500052) Homepage
    When a company makes you a job offer, ask them to send you over any contracts they are going to ask you to sign. You could give them a fax number, have them express them, or come pick them up.

    Don't have a fax? Maybe the local copy shop downtown will allow you to receive faxes for a fee. I've known drug stores where I received faxes regularly.

    Read the contracts thoroughly. You want my best advice, no matter what it says, take it to an attorney.

    Make it clear to your new employer that you're going to be paying to have an attorney review their contracts, and if they make any changes later you're going to have to consult an attorney again. If they give you a hard time about this let them know that you'll be billing them for the additional expense.

    Now, it's very important that you've asked up front for your contract. If the contract hasn't arrived before the day you're to start work, call in and say you can't show up because you haven't had an opportunity to see the contract. Tell them, as earnestly as you can, that a contract is a serious commitment between you and them and you wouldn't dream of signing one without reading it first, at home, without them watching you, and having access to an attorney.

    If they give you a contract you haven't seen before when you arrive, inform them that you'd made clear your desire to review any contracts ahead of time and walk out.

    If they're really worth working for, they'll get you the contract to review. If you're the kind of person for which it would really be an issue to have a non-compete agreement at all (exec, high-level engineer etc.), then they're not just going to let you go work for someone else after you've made it clear they insulted you and tried to deprive you of your right to make informed decisions about your own future.

    Did you get the job through a headhunter or contract employment agency? You should know that they're paying, at minimum, 30% of your first year's salary for the headhunter's fee to hire you, or 30% of your hourly rate to the agency for the entire time you work (not just the first year). Consider how valuable you must be if they're paying this much for you, so really it's not that much to ask that you be completely informed before showing up to work.

    To make it crystal-clear: Your decision to accept the job or contract should be based in part on full information about the contracts you will be signing. Do not make this decision until you've read the contract. Tell them that acceptance of their offer letter is conditional on reading their contract first.

    I'm not kidding about this and this is not a troll. I really mean this and I'm speaking from hard experience. I've been a software engineer for thirteen years now and have been running my own independent consulting business for almost three years (by independent, I mean I don't work through agencies, so I'm on my own when I sign a contract).

    You think you really need a job? Tired of flipping burgers - or think that's what you'll be doing if you don't sign? Thimk of the months or years of misery that will result if you make a rash decision right from the start. Not only will you regret it, but you may lose tens of thousands of dollars as a direct result of taking this job, rather than turning it down and finding another, or negotiating a better contract.

    There's something called "opportunity cost" that many managers know about but not a lot of regular employees. It is the cost of losing the opportunity to do something else. You may think you've gained by getting a job, but you may have lost far more by not turning it down and taking a different one, or getting rid of that noncompete so that when this job is done (and no high-tech job lasts forever) you can get the rewarding job of your choice.


    Michael D. Crawford
    GoingWare Inc

  • Oh yeah? That's nothing. (Score:5)

    by Chuck Flynn ( 265247 ) on Wednesday January 17, 2001 @04:19PM (#500053)
    After Posnik Yakovlev completed Saint Basil's Cathedral [mssc.edu] in Moscow, Ivan the Terrible had Yakovlev's eyes poked out so he could never build another building to compete with St Basil's beauty. Now there's a real do-not-compete clause. You kids these days have it easy.

  • Non-competition? (Score:5)

    by Saint Aardvark ( 159009 ) on Wednesday January 17, 2001 @04:20PM (#500054) Homepage Journal
    Man, don't worry: when I leave my job, I don't plan on ever making fries again.

  • I signed something like that when I started here. (Score:3)

    by Kris_J ( 10111 ) on Wednesday January 17, 2001 @04:21PM (#500056) Homepage Journal
    I'm currently working at a real estate place, just. When I started I had to sign something saying I wouldn't steal any clients when I left. I'm the IT Manager.
  • But since MS does make almost every category of software product, couldn't they argue that if they're not working for the competition making either office productivity suites or operating systems (where MS makes most of its sales revenue), that the non-compete clause would be invalid?

  • Depends on your state law (in the US, at least) (Score:3)

    by sacremon ( 244448 ) on Wednesday January 17, 2001 @04:23PM (#500060)

    In Georgia, we have a 'right to work' statute. It boils down to that non-competes essentially are meaningless, as no one can restrict your right to work for whomever you wish. I signed one at the first place that I worked in the IT field, and even the company's layer, who was one of the owners, admitted that it wouldn't hold up in court.

    Of course, the flip side is that a company can fire you for any particular reason, as long as it doesn't violate any Federal statutes.

  • Some years ago, I worked for a small UK company, owned by a US company. Then the US company were bought by Prime, who tried to introduce new contracts.

    Among other things the new contracts had a non-competition clause. The competition was defined as anyone making computer hardware or software of any kind. We objected and pointed out this was almost certainly an attept illegal restraint of trade under UK law, and the new management agreed - "Don't worry, we don't really mean that bit of the contract". "So you won't mind deleting it?" we said. "No, we need it there just in case".

    Similarly with the anti-trust clause that said that any meeting or conversation, of any sort, work related or not, with anyone who worked in the computer industry, had to have written minutes. Those people with spouses working in the industry found that one particularly objectionable.

    Eventually well over half the workforce returned the new contract letter saying "this is unacceptable for the following list of reasons", and they were forced to change it.

    The manager whose initial response was "nice try, now let's see the real terms and conditions" eventually won his unfair dismissal case.

    When I left some months later, about half the names on the old phone list in the machine room had already been crossed out, people were using desktop backgrounds of scanned job adverts, and one department had a "will the last person to resign please turn off the lights" sign.
    They had recruited new people, but the company didn't last much longer (and Prime's minicomputer business didn't either).
    --
  • Well, they TOLD you: "better pay, signing bonus", didn't they?

    So, you match and extend it. Pay raise, bonus, and so on.

    One thing that I'm finding that companies generally SUCK at is that they have no concept of laying a foundation for helping their employees create a career - that means short-, medium-, and long-term plans. In other words, if Jim shows potential of being a decent DBA, then you at least discuss the possibilities with him at a performance review, set those goals, and as is possible, meet them. Yes, it makes Jim more enticing to your competitors, but it makes him more valuable to your company. IF you're also keeping up with the Joneses in terms of pay, benefits, stock options, and so forth, Jim will very likely be with you a very long time.

    On the other hand, if the only view you have of the relationship with your employees is to the end of the project, or of the quarter, then you can be sure that they're constantly checking to see if they might be happier somewhere else.

    My dad worked for the same company for 34 years. The "conventional wisdom" these days is that our generation will change jobs many times over the course of our career. I make more $$$ than my dad ever did (although I had more $$$ in student loans at a higher interest rate than he did in the house he bought!), but the word I'm hearing more and more often from people about what they want from their job is "security".

    It would be interesting to see how much that word alone is worth.

  • About ten years ago I worked out a nice nonconfrontational way to deal with this silliness.

    On your first day at work, when they're handing all of the things you have to sign to you and issuing you rubber bands and a stapler, start reading the stuff. Read it slowly. Your new boss or the personnel doofus won't hang around waiting for you to finish. After perusing the documents for a reasonable amount of time (20 minutes is good), return the stack of documents to the personnel guy. Just "forget" to sign the non-compete agreement.

    Few personnel directors are anal enough to check all of the documents.

    Another variant that isn't so innocent but still plausible is to rip the signature page off the agreement. This is especially good if you have a chance to take the agreement home before you sign it.

    Make sure you sign the tax stuff well and legibly, because they are sure to look at that and you need it to get paid. If there are any problems with those they will likely check the other documents too.

    It is even better if you arrange to have a pen that is on the edge of quitting, and sign one or two of the documents with that pen. That way if they ever do check they'll just give you the benefit of the doubt.

    If someone ever notices that the agreement isn't signed, just act very puzzled and say, "I'm sure I signed it." As long as you let people think you're clueless, they'll give you a lot of slack.

    Another company I worked for never got an I-9 (where you have to give ID to prove you're an American) from me until almost two years after I left the company. That was real fun.

  • Then you only have yourself to blame (Score:5)

    by Chuck Flynn ( 265247 ) on Wednesday January 17, 2001 @04:27PM (#500081)
    My advice to all the young people I meet today is: don't sign anything. They'll come after you with big words and pretty ladies, but don't give in. Don't ever let them take your signature. Once they have your signature, they can start extracting things from your bank account, and soon you won't have anything but your social security check to fall back on. And then where will you be?

    I haven't signed anything in over thirty years. When the UPS guy comes to my front door with a package slip for me, I hide in the shrubbery. When bill solicitors show up demanding compensation for overdue ballances, I pretend I'm Swiss and don't speak the language. They've cut off my gas and water a couple times, sure, but that's the price you pay for true freedom in this country.

    Don't sign anything. Just trust me on this one.

  • Re:If you don't want non-competes, then why use th (Score:4)

    by Shoeboy ( 16224 ) on Wednesday January 17, 2001 @04:28PM (#500084) Homepage
    I refused to sign my contract for ~3 months when I was temping at MS.
    They nagged but I still got paid.
    Eventually I found a better job.
    Never did sign the new contract.
    It asked me to waive all rights to take legal action against MS.
    --Shoeboy

  • your skills are yours, not your employers (Score:4)

    by tokengeekgrrl ( 105602 ) on Wednesday January 17, 2001 @04:28PM (#500088)
    Non-compete agreements were designed so that someone couldn't steal "property," (in this case property would most likely mean code or product specs), from one company to use at another company, the idea being that as an employee everything you produce belongs to your employer. However, employees can't be prevented from using their brains and if they acquired skills that happen to be transferable, no company can prevent them from using their skills somewhere else should they choose to quit. That's just absurd.

    This is so bogus given that while I worked at Microsoft as a contractor several years ago, it was common knowledge that MS poached talent from competing companies by offering the lead developer money to leave that company with no notice and taking as much of their work with them as possible so as to cripple the company's marketability.

    - tokengeekgrrl
    "The spirit of resistance to government is so valuable on certain occasions

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