×
INTELLIGENT WORK FORUMS
FOR ENGINEERING PROFESSIONALS

Log In

Come Join Us!

Are you an
Engineering professional?
Join Eng-Tips Forums!
  • Talk With Other Members
  • Be Notified Of Responses
    To Your Posts
  • Keyword Search
  • One-Click Access To Your
    Favorite Forums
  • Automated Signatures
    On Your Posts
  • Best Of All, It's Free!
  • Students Click Here

*Eng-Tips's functionality depends on members receiving e-mail. By joining you are opting in to receive e-mail.

Posting Guidelines

Promoting, selling, recruiting, coursework and thesis posting is forbidden.

Students Click Here

Jobs

Non-Competes
8

Non-Competes

Non-Competes

(OP)
In viewing my responses on my previous thread, I would like to know where engineers stand as far as non-compete clauses go?

Are they good because they keep the greedy in line?

Are they bad because they hinder engineers from the persuit of happiness?

All thoughts and opinions are welcome.  

RE: Non-Competes

Not sure what context you are referring to but I've switched jobs a few times and find the non compete is going to depend on the company, state, and business.  In TX they are basically useless and you can join any company you want.  May be some head aches later depending on the company but overall no big problem.

RE: Non-Competes

I would never sign one.

There is no such thing as a job for life these days and I dont want to have to leave town to change my job.

RE: Non-Competes

2
In most states and provinces in North America, non-competes for salaried engineers are not enforceable.  Many precedents already set, so don't sweat it.  Sign it, it's no good anyhow.  No one can stop you from taking your next job.

The only time it may come into force is if you start a business that competes directly with your former employer.

batHonesty may be the best policy, but insanity is a better defense.bat
http://www.EsoxRepublic.com-SolidWorks API VB programming help

RE: Non-Competes

Tick is correct. The paper they want you to sign is per state laws anyway. I never understood why companies want you to sing something that already exist anyway. My last company threatened us with it. Several good employees quit because of it. You don't have to sign it.

Chris
SolidWorks 08 0.0/PDMWorks 08
AutoCAD 06
ctopher's home (updated 10-07-07)
ctopher's blog

RE: Non-Competes

roger that on csd72 & Tick.  Only an HR guy thinks those things work.  I know NOW to ask in the interview process if I will be asked to sign one.  If yes, then my job description must be a multipage document with excruciating detail, and skewed heavily in my favor.

TygerDawg
Blue Technik LLC
Advanced Robotics & Automation Engineering
www.bluetechnik.com

RE: Non-Competes

I negotiated mine where they had to specifically list their companies competitors that they would not want me to go work for.  I also gave them the ability to ammend it with my signature so in case some start-up started competeing with us.  This made them feel like they had the power.

Turns out it was about 3 companies I had never even heard of so it was no big deal.

Zuccus.

RE: Non-Competes

3
I would be willing to sign one, as long as they signed one that they would never hire anybody to do my job if I ever left.

RE: Non-Competes

i'd never sign one.  

RE: Non-Competes

Non-competes are not enforeced upon individuals by the courts in the US.

Non-competes are often enforced upone owners/partners/pricipals by the courts in the US.

For example, you own an engineering consultancy company. The buyers want to buy your company, and you sell. The contract will most likely have a provision that you don't go down the street and start another one to compete against them. In the contract, they may also limit where you can not start up another company (say not only the town, but the county), or a fixed duration within which you can not start up a company (say you have to wait at least 3 years). This in essence is a condition of the sale. This, the courts usually enforce.

"Do not worry about your problems with mathematics, I assure you mine are far greater."   
Albert Einstein
Have you read FAQ731-376: Eng-Tips.com Forum Policies to make the best use of Eng-Tips Forums?

RE: Non-Competes

Non competes when you sell a  business are logical, and make sense.

I think that the actual goal that firms are trying to accomplish with non-competes is that they want to make sure that employees don't take corporate information (ie, customer lists, contacts, pricing info, etc) to a competitor.  When I left one place to go to a competitor, I was asked to sign a document to this effect, and my friend (who happens to be a lawyer), explained that this concept is pretty much assumed under the law, ie, that customer and pricing data is your employer's property, and you cannot use this confidential info to your own gain.

RE: Non-Competes

What TenPenny said...

It's called "fiduciary duty".  When one holds a position of employment, the employee has responsibilities that are legally implicit in having that position.  The employee is trusted with sensitive information, and the law recognizes the keeping of that trust as part of an employee's lawful duty to his employer.

RE: Non-Competes

Thats why we sign the Confidentiality Agreement to protect the sensitive information and such stuff.

But it would be largely unfair to have a condition on a employee as this. This cuts the competition in salary. I understand this approach would have worked in the past but in todays world I dont think such a system would work.

In todays global market I dont think it would be practical for companies themselves. global companies need global resources to excel their performance and gain more profits. Now this non-competes may only create problem than solving.

Siddharth
These are my personal views/opinions and not of my employer's.

RE: Non-Competes

Tick and others pretty much cover my understanding of it.

I had to sign one for my current place.

However they are pretty much meaningless, we've had several high profile tech guys leave and join competitors in the last 2 years and I haven't heard of any legal efforts to stop it.

However, we are involved in legal proceedings to protect patents with a company formed by former employees (possibly before they even had non competes here).

Before I joined one lead guy who'd worked for the company before it was acquired by the current corporation was fired for refusing to sign a non compete.

KENAT, probably the least qualified checker you'll ever meet...

RE: Non-Competes

This is a very topical discussion for me.  I'm negotiating a contract with a new client tonight.  He represents a manufacturer and wants me to sign a master service agreement with a non-compete clause (it is so tight that if I sign it, this $3000 job will preclude my doing any work for any of my clients for the next three years).  I laughed at them.  They agreed with me and said it had been removed, but they were just teasing since it is still in the document.  I closed negotiations with "you need me more than I need you, if you remove the clause I'll review the rest, otherwise have a nice life".  I wouldn't sign one of those things unless there was enough money on the table to allow me to sit on my butt for the duration, and I probably wouldn't sign it even then.

David

RE: Non-Competes

(OP)
I signed mine because if I didn't, I couldn't work for them.  Just being out of school, and looking for a job for 6 months, I jumped at the employment opportunity to better my situation (beggars can't be choosers).  Now I'm in a confusing position.  Was my hand forced?  I needed a job and couldn't find one anywhere but where I work, and it takes a long time (6 months) to find a job (6 months is a long time without income).  This is a case where a company is enforcing an individual salaried employee. How valid is this non-compete contract? Should I "lawyer up" and test its validity?  What do labor laws say about this?  (keep in mind that this is in the US)    

evil   

RE: Non-Competes

Well, you could try reading the answers you've /already had/ in this thread:

In TX they are basically useless and you can join any company you want.

In most states and provinces in North America, non-competes for salaried engineers are not enforceable.  Many precedents already set, so don't sweat it.  Sign it, it's no good anyhow.  No one can stop you from taking your next job.

Non-competes are not enforeced upon individuals by the courts in the US.

I had to sign one for my current place. However they are pretty much meaningless,

Cheers

Greg Locock

Please see FAQ731-376: Eng-Tips.com Forum Policies for tips on how to make the best use of Eng-Tips.

RE: Non-Competes

I was asked to sign one for a job in the UK. They listed some companies I explicitly couldn't work for but also had some generic wording in there that covered other companies as well. I spoke to my solicitor who said it was unenforcable in English and Scottish law.

For my current job I didn't sign my contract as it basically said I couldn't work for anyone without permission being granted first. When I pointed out this would include mowing my neighbours grass in return for any reward (cup of coffee etc) they agreed it was silly and would correct it. Three years on and I still haven't signed the contract.

I remember in another thread here that people often just crossed out the bits of contracts they didn't like, initial the changes and then signed the document.

RE: Non-Competes

It seems like most people on this thread are in agreement that it's no big deal to ignore a non-compete that has been signed.  Maybe this post belongs in the "Ethics" forum, but does anyone see any ethical problems with breaking a contract that was signed?  Maybe it can't be enforced by the legal system, but as a matter of professional ethics, shouldn't the engineer keep his word in this matter?

I've never been presented with a non-compete contract so maybe I don't know enough to discuss this intelligently, but the question did enter my mind...

Thanks,
Ben

RE: Non-Competes

The basis of the "unenforceability" of non-competes is that by simply changing jobs to a competing company, you are not personally going into competition with your old employer.  You are simply plying your trade with a new customer (yes, employers are employees' customers in that sense).

Fairly solid ethical ground, tested many times.

RE: Non-Competes

Bencraddock asked an interesting question.  Is it really ethical to ignore a contract you signed just because you don't think it's legally enforcable?  You still signed it.

I'm not sure how I feel about this.  Having the clause removed from the contract would be ideal, of course, because it removes the ambiguity.

RE: Non-Competes

Don't confuse ethics and morals.  Ethics is about allowable conduct, not touchy-feely guilt-laden moral quandaries.

So, yes, its ethical.

RE: Non-Competes

I would suggest that the unethical conduct is performed by the Employer, who knowingly requires an employee to sign a document which is is known to be unenforceable under the law. This is meerly intimidation. It has also been deemed coersion under legal rulings.

RE: Non-Competes

TheTick,

So you think it should be allowable conduct for a proffesional engineer to sign a contract with no intention of honoring it?

stanweld,

that's a very good point.  The only reason the employer has it in the contract is to scare people into staying at their job through misinformation.  That definately doesn't sound very ethical.

RE: Non-Competes

It doesn't matter what I think.  The precedent in this situation is well established and clear.

RE: Non-Competes

Even if there are no legal repercussions to ignoring a non-compete, I wonder if there may be some practical reasons to honor the contract?  The engineering community is a very small one and word gets around.  I know in my neck of the woods that many employers would have second thoughts about hiring an employee that unapologetically didn't keep his word on a signed contract.  Maybe some employers wouldn't look that closely or ask questions, but I know the ones that I've worked for would.  

Perhaps this is an issue that could be looked upon one way by employees (that it's no big deal), but heavily scrutizized by employers???  Legality or ethics aside, it could look bad to a potential employer who takes non-competes seriously.  

I guess one could make the point that employers don't really take non-competes seriously and are just using them to bully employees as stanweld indicates, but that is a broad generalization and may not be true for all employers.  I know at my previous employer a non-compete issue was taken very seriously and some bridges were definitely burned.

RE: Non-Competes

After reading all the above and thinking back on my experiences, here are my opinions:

1.  An employer cannot prevent you from obtain future employment.  This is a view I heard several times from attornies as I was retiring from the military but still needd to work, and it's probably the legal basis for many non-competes being non-enforceable as mentioned above.

2.  I've never been asked to sign a non-compete.  If I were seeking employment as an engineer (or anything other than senior/executive management) and the company asked me to sign a non-compete agreement, I would think VERY, VERY carefully:
- I wouldn't agree to something that I knew I would violate merely because it was not "enforceable";
- This would be perhaps the first indication of the business and management practices used by the company.  This would be a reason not to accept employment.
- If after considering the above, I still wanted employment at the company, I would seek to amend the agreement.  

3.  Where I have seen others using non-competes, it involved restrictions on an employee leaving the company and (a) taking customers/work with them to a new company,or (b) starting a new company on their own within a certain distance of the original company.  

RE: Non-Competes

No one would like to hit an axe on his/her own foot.

Its the individuals NEED, which makes the choice.(Supply Demand constraints)

Might be of concern in Sales.

Siddharth
These are my personal views/opinions and not of my employer's.

RE: Non-Competes

I recently accepted a position with a company.  Part of the paper work that was put before me to sign was a non compete agreement.  It basically stated that upon leaving I wouldn't try to recruit the other employees, I wouldn't steal any of their trade secrets and I wouldn't leave and go start up a competing company at least for a period of time.

Regardless of whether or not any or all of it is enforceable, I signed it because I want the job.  

I once worked at a company where one person left and started up a competing shop in the same city, using a lot of the same technology.  This person also recruited a lot of my former coworkers.  The company I was working for tried very hard to bring legal action with little to no success.  This is an example of a case where all the non compete agreements proved worthless.

You will often times get the same thing when attempting to buy a car.  They will put a paper in front of you stating that you agree not to sue them and go through arbitration if the car is a lemon.  According to the atty I hired when I had a lemon those agreements are worthless and non binding.

My conclusion is that just because someone makes you agree to something as part of the condition of some form of offer or agreement, doesn't mean that their condition is binding and enforceable.



RE: Non-Competes

The terms you list above actually are enforceable, because they are specific, reasonable, and do not conflict with restraint-of-trade laws.

What is not enforceable is any non-compete agreement that simply states: "Thou shalt not take a job with a competitor, ever."

RE: Non-Competes

I signed a non-compete at my last job because like one of the pp, I really needed the job and beggars can't be choosers.  However, when it came time to leave, I really agonized over it, and actually paid an employment lawyer for an hour of his time to read it and give his advice.  

He said that 99% of time companies never pursue it, but he said ALL of his clients are the 1%, so it can happen and it is devastating.  Even if they can't ultimately win and get anything from you, they can file an injunction to keep you from working until the case goes to trial, which could easily be 6 months or more.

My husband stays home with our young children and I am the main breadwinner.  The lawyer advised me not to take that chance at this time in my life.  I didn't interview with the company that could potentially be construed as a competitor and took a job with another company.  I am glad I did, because my conscience was clear and I didn't lose sleep worrying about whether I would get hauled into court.

For me it was a peace of mind thing more than anything.

I signed a non-compete at this job, but it isn't as restrictive as the last one, and I know there are ways to find jobs that wouldn't violate it.

Red Flag This Post

Please let us know here why this post is inappropriate. Reasons such as off-topic, duplicates, flames, illegal, vulgar, or students posting their homework.

Red Flag Submitted

Thank you for helping keep Eng-Tips Forums free from inappropriate posts.
The Eng-Tips staff will check this out and take appropriate action.

Reply To This Thread

Posting in the Eng-Tips forums is a member-only feature.

Click Here to join Eng-Tips and talk with other members!


Resources