In Germany, you would be laughed out of court for trying to enforce an 18-month noncompete clause, at least if its too broad - that would be equal to an occupational ban. Is this really standard practice in the US?
back
6 comments
UK here. The current company I work at tried to get me to sign one. I took the contract to my solicitor who just crossed it out and said hand it back and tell them to accept it or fuck off.
There were no complaints.
Sometimes you just have to push it.
Or alternatively get them to commit to paying you for the period of time. "Gardening leave" of a couple of months is common in many areas, especially sales / marketing driven - but being compensated for it is expected.
I don't really want that. It's a PITA getting a job lined up for when you've quit plus the garden leave time. It's easier when there's just notice to consider.
Gardening leave means you still have a fully paid job, you just don't need to do any work. So you could for example do an MSc while getting paid a salary. Assuming you have the tiniest modicum of self discipline needed to do something productive in that time, it's the best thing ever.
Sure, but if you're trying to have another job lined up, it's a lot harder to find one before you quit. "We need someone right away, can you start in two weeks?" "Sure, I'll put in my notice tomorrow." is going to be a lot more common than "We're completely sure we need someone new starting 6 months from now, go ahead and quit your job."
It depends on where you are. In Germany it is by default a month, but your contract could specify for example 3 months notice for both parties. In places like that, everyone knows this, so a company trying to hire will account for this. Also it's been my experience that most of the times when companies are hiring for "NOW", the start times ends up slipping for months.
If you're in California, where you can leave your company and start working in the next one in a matter of hours, there'll likely be an expectation by the company hiring of a fast start.
At the same time, depending on the company, the hiring process can stretch for months before getting an actual offer.
I want to believe that most employers you'd like to work for are understanding that "life" might happen and you can't start two weeks from the moment you first met them.
Well, if you're unhappy with your job, then you quit and use the 6 months to look for something new. I guess it doesn't really help when seizing opportunities that come along (that may be better even if you're not unhappy).
If you can absorb 6 months of not getting paid, yeah. Not everyone can, and while I've seen a lot of advice saying you should demand to be paid for the duration of a non-compete, I'm pretty sure that's not typical.
Plus there's the uncertainty of not knowing whether or not you'll be able to find a job with comparable pay.
If it's 18 months it's not so bad. A nice long holiday you can actually use to brush up your general skills and CV, or retake that side project you never had time to finish. You're still officially employed so it doesn't count as a hole (and if asked, you could not work during this period).
South African checking in; I've done the same with the same result.
I've done that in the US. There was a ridiculous non-compete, and a ridiculous "we own everything you produce, 24/7" clause. I crossed them both out, and signed. Nobody said a word about it.
In France, a noncompete clause is only enforceable if the contract provides adequate specific compensation for it... Often it doesn't and ends up unenforceable.
Germany also requires a comp' (a significant fraction of gross), FWIW. And has a hard-limit to 2 years, and a number of restrictions. Much like France.
I believe an exemption would be a board member. Other than that non-compete can be enforced only if the employer provides hefty compensation.
I think it's pretty much harmonized across the entire EU.
It depends on the state. In California non-competes are unenforceable except in very narrow situations, like if you sell goodwill to a company or you are part of a partnership that has gone through a dissolution. Certainly, this guy's non-compete is unenforceable in California.
Not directed at you, but in general:
It'd be really nice if some hacker would put together a comprehensive map/list of non-compete status per state (or if they have) since there are a few states outside of California too. Wikipedia seems to do OK in this regard, but it seems like there should be a lot more info out there.
I was checking to see if someone else already wrote this. This is one of the first things I was thinking.
The only non competes I have heard of personally are ones that deal with clients. A few people I knew were not allowed to use their existing clients if they went to work for a competitor.
Sometimes companies will make you sign a noncompete if you accept a severance from them.
A family member asked his new company if they would match the severance so he wouldnt have to sign a non-compete. The new company agreed and he was able to keep his clients and got a signing bonus!
Why would you ever accept an 18 month non-compete in the first place?
A few reasons off the top of my head:
1) Most people accept them because they never actually read their contracts fully.
2) They are told that it is a non-negotiable condition of employment and they really want the position.
3) They are aware that non-competes are unenforceable in their jurisdiction (assuming they are in a jurisdiction where non-competes don't stand up in court).
4) They assume the company is unlikely to spend the money required on lawyers to actually come after them if they violate the non-compete in the future.
5) When hiring you, the company verbally insists up-and-down that they won't enforce the non-compete, and you believe them
I find this too. When we were acquired we (group of employees) had lawyers come in (to a bar) to go over the agreement the new company required we signed. The lawyer basically said not to sign it because they could probably enforce it. Ultimately the company made it seem like we were making a big deal out of something they would never try to enforce but still insisted everyone had to sign it. A few people refused to sign. Other signed and then left for competitors anyway. A majority signed it and still work for the new company.
1) This makes sense as an answer, I don't understand why people wouldn't read the contract for something that they rely on for their livelihood though.
2) Something like that should be a dealbreaker. No matter how much you want the job, it's effectively saying that you can never leave.
3) In the case of the letter here, he tries to negotiate it after he was fired. If he knew it was unenforceable, then he could have quite simply said so.
4) On their part this is a stupid assumption. You should always assume that a company is willing to back up their threats. Especially a company the size of Amazon.
This isn't to attack your answer, just to put my views on those points.
"2) Something like that should be a dealbreaker. No matter how much you want the job, it's effectively saying that you can never leave."
Based on your username I'm going to assume you're not used to conditions in the US. In my experience, working for 2 megacorps and a startup, this is pretty standard. So if that is a deal breaker good luck finding a job without moving to California. I think I read a story on HN a few weeks ago that said Jimmy Johns was enforcing non-compete agreements. The last one I signed basically said the company owns all work I do, even work I do in my own time (OSS, side projects, etc). I also am required to get permissions to contribute to OSS projects should I want to do that. I also cannot work for competitors (which is like everyone in the industry). I signed it because I don't think it is enforceable and I don't think the company would waste resources trying to enforce it on me.
There needs to be a federal law limiting the scope of these agreements. Preferable modeled after the CA laws.
Because you're young and enthusiastic, because the job sounds awesome and because you don't want to employ a lawyer every time you apply for a job?
Sure, it's a bit naieve not to read a job offer carefully enough, but on the other hand you'd kind of assume a company as large as Amazon, employing so many knowledge workers, would not offer their applicants extortion rackets disguised as job contracts to begin with.
A number of new-hire engineers at Amazon are straight out of college. Looking at it recently, no numbers purely anecdotal, this crowd is being dominated by Asian immigrant graduates.
These people are students who just finished their graduate or under-graduate studies and have most likely taken huge education loans in a currency which is weaker than the dollar. In that situation one really just wants a well paying job at a company which is recognized by the general population (especially your parents and peers) as a good one. Given that, the person signing the contract is unlikely to give the non-compete too much thought. And even if they did, verbal rhetoric from the HR is good enough to lead them to signing.
I wouldn't if I ever take a job somewhere where they are enforceable. As it is, it acts as a minor warning sign that the company has asshole lawyers.
Well, if it's the only work you really like to do OR if it's the only job that pays 100k a year?
I'm a Brit, but from previous comments I believe they are unenforcable in quite a few US states.