MY CONTRACT - advice please 1

[richarda]

Hi,
I am an enineer in training with about 3 years experience.
My new employer has drawn up a lengthy contract that contains items I have not seen in my contracts from my previous employers.
One clause of the contract states that if I choose to leave the company on my own accord, I am not to take employment with any other company in the province that does any work that has been described in the job description section of my contract for a period of one year. The job description is so broad that it would include any employment that is even remotely related civil/environmental engineering. I have questioned them on this and they are telling me its industry standard but i have worked in 3 firms before and there has been nothing this limiting. i have signed confidentiality agreements before and thats ok but how can i agree to not work anywhere else for a year if i leave the company? They also said this is to protect their 'special and unique' methods from their competitors. Another peculiar thing is the contract has no termination date or duration. I questioned on this and they said its their hope that i would remain with the firm indefinitely so there is no need for a termination date on the contract. so basically i have no protection under this contract at all. if a year down the road i find out that this company is not for me, if i decide to leave, i would have to leave the province or sit on my butt for a year. I have not signed the contract yet and i would greatly appreciate any input, opinions, advice that any of you may have.
Thanks in advance.

Rick, EIT

 

[thebigdog]

Where I have seen contracts of this type being used is more for senior level employees or employees in a position to have access to "sensitive information" such as marketing plans, business plans, client lists, etc.

In my experience, it is unusual for the type of provisions presented inthis contract for an engineer in training with 3 years of experience.

 

[KRSServices]

I have had to sign these types of contracts, and depending on the engineering firm, it is a matter of client relationships and secrets. You can easily amend this contract such that should you decide in th future that this firm is not agreeable with your career or expectations, provide the frim with a clause of first refusal. This will be exclusive only to the offer of the other firm and must be mutually agreeable. In the case where agreement is not achievable between the parties, protect yourself by writing in a clause where the matter will be dealt with by an independent arbitrator, and that his/her decision is final, of course at the sole cost of the firm. While this seems unreasonable, this will protect you from the firm acting unfairly, particularly if emotions become involved. Secondly, it will strengthen your position to the firm that you intend on staying the course, provided the firm provides incentive to keep your interests and career development. I have yet to see this clause tested in Alberta, but you should also remember that regardless of the situation, your employer cannot make you sign away your rights, regardless of what is on paper. The courts will likely find that clause prejucicial and ultra vires in the case of dispute.

I know of a few firms that use these clauses, but they are usually reserved for very experienced managers or senior engineers. In most cases, the senior people that have joined our firm, including myself, have also brought the clients with them, much to the chagrin of our former employers.

KRS Services

http://www.krs-services.com

 

[llianhui]

are you living in one of canada's commonlaw provinces?
referring to 'law for professional engineers', by D.L. Marston;
'engineers often encounter similar restrictive covenants in employment contracts. Such contracts may attemp tp restrict the employee after leaving such employment. The court will apply principles of reasonableness and public policy to determine the enforceability of non-competition clauses in employment contracts. The courts are reluctant to enforce restrictive covenants that would severely limit the former employee's ability to earn a livelihood; each decision will depend upon the particular circumstances. '

 

[erikfinley]

It's been my experience that employers who find this sort of contract necessary lack the positive incentives that would keep a good employee. I suspect they're probably a "revolving door" company, who can't keep employees because they're an unhealthy business.

However, if you're already working for them without the signed contract that tells me that they're more interested in getting the work done and the contract is just a nice idea. If they hired you without the contract, I'd speculate that they won't fire you for not signing it.

Signing or refusing to sign has risk. Which risk are you willing to accept?

 

[richarda]

You said it 'erikfinley'. (I'm the thread starter)
I found out after I started here (late Nov.) that over the last several years, at least two junior engineers have left after a maximum of 2 years. Through the grapevine I have heard they left because of not being content with the way they were treated and the way the company operates. You are right about lack of incentive to stay. I moved from one province to another to take this job which during the interview phase seemed to be a great little up-start engineering firm to join. I accepted a salary that I would say is below the national average but I justified somewhat by the low cost of living in my new home province. Also the company offers absolutely no benefits (no insurance of any kind, bonuses etc.)and they are very disorganized and seem to operate a little on the un-ethical side at times. (Its a very tiny firm.) One would wonder why I took the position, truth be told, I was in a circumstance where I really needed the job since I was haveing dificulty gaining employment where I was located (I was previously on contract employment and spent some time working in the US upon graduation). My experience level is great.
This all being said..and to update all of you who are graciously supplying your helpful advice and opinions,
...they still have not supplied me with the final draft of the contract. Before the holidays, I was told that they gave the contract to their lawyer to review and that a few minor changes were made. They said they would give it to me in the new year. They said they encourage me to have my lawyer review it. I don't really have a lawyer and I don't really like the idea of paying for one to tell me what I already know from all of you.
So this is where it stands. There has been no mention of the contract since my return (typical as they generally seem to of the procrastinating nature). I have pretty much decided that there is no way I can sign the contract. Even if I was totally content here all things point to this contract being harsh and ridiculous. Apparently this is their first attempt at having employees signing a contract like this. The other EIT here has no contract at all. He started about a year ago.
I guess I am asking you all for advice again...I think I have made a mistake moving here to take this position. I am now pretty settled here and feel I have to stay for a least a while. This firm offers me nowhere near what my career expectations and goals are. I am getting no support and have done nothing the above the level of techncian since I began. And even thats been when they finally get around to awknowledging that I even work here. Very strange. I can't even begin to state the peculiar way this firm operates.
So..here's my idea...
there a few very reputable firms in this same city that I would be really keen on joining. They are in fact competition to my present firm. I really want to apply at these places but how on earth can I do that ethically and discretely? How would it look to the other firms? I feel I'm between a rock and hard place but I need to do something.
Thanks again to everyone and thanks in advance for your further advice.

Regards.

 

[dutchie]

wow, tough spot richarda

my situation is not unsimilar in that I relocated to an area where employment options were available, but not a lot of them. It is my opinion, and i stand to be corrected on this, that there is nothing wrong with doing a little networking in your community and putting out feelers on what other employment oppurtunities are out there. It is actually not that bad of a situation, since you are employed and making some dough while you look. there is an opinion out there i realize that you may "owe" your employers some time, but gauge the investment they have made in you to this point and judge accordingly. If a large amount of training dollars and relocation dollars were spent, then you may want to consider sticking around for a year or two in order not to burn any bridges. If not, then I wouldn't feel overly obligated to stick around. But in the end, it is up to you, and if your firm is somewhat "unethical" as you say, and you feel better about getting out now, then do it and don't look back.

Bottom line, if you are changing positions because you are not adequately challenged in your current position and feel it is impeding your development as an engineer, no one will look down on you for making the change, quite the contrary. Changing positions, especially as a junior engineer is very common, and those who might hire you know this.

good luck, and let us know when you find the job you are looking for

dutchie

 

[BigH]

I wouldn't think twice about looking for new (read that "better&quot employment. If you are somewhat discontent, you won't likely be on your toes wholly - this hurts everyone. Contact the other firms - see if they want to interview you. You are still very young and should pose no threat to them - if there are reputable firms (e.g., Golder, Thurber, etc) in your city, their principals are a lot more "damaging" to your present firm than you would be. Good luck and get a job that you will be happy with!!

 

[RDK]

I’d think that the courts would uphold the restriction. It’s my understanding that in Canada, as long as the restriction has a term and a geographic area of applicability that the courts would view it as not being overly restrictive to your employment and intended to protect the companies investment in you. One year and one province is not all that great a restriction.

I see three options

1) Accept the agreement and live with the consequences. (Restricted future employment)
2) Reject the agreement and live with the consequences. (Potential immediate unemployment.)
3) Attempt to renegotiate the agreement into something less restrictive. This could be a shorter time period, restricted to current clients, limited to specific fields of engineering. You should be prepared to give up something to get some reductions elsewhere. For example offer them 2 years but restricted to current clients of the firm at the time of your leaving or for only part of the province. (I sometimes use as a negotiating method to simply ink amend the contract, initialling the changes and return it asking that they ratify the changes.)

One thing I would never attempt would be to sign the contract and them violate the contract. You may eventually get some skills that a future employer wants badly enough to agree to pay any damages but you could be held to be acting unethically and lose your license. Any firm that would participate in this would also be unethical and not somewhere I’d want to work.

The best you can hope for after signing the contract is to get a job with a firm that will move you out of province for one year and then return you when the restriction is limited.

If you are unhappy now and think that the firms locally are a good bet then by all means approach them and apply for a job. If your current employer is “unethical” then they will have this reputation and you might want to get out before you have this reflect on you.

Quitting soon from an “unethical” company would not be seen as a negative, simply explain discretely that you felt that you did not fit in to their methods once you arrived. Anyone in the know will understand and no further explaination will be necessary.


Rick Kitson MBA P.Eng

Construction Project Management
From conception to completion

http://www.kitsonengineering.com

 

[Focht3]

Don't sign the agreement. Do commit your concerns about the contract to writing and express an unwillingness to sign it in its present form. Be sure to describe the time frame of your receipt of the draft agreement and all prior discussions with "management." Express concern about a lack of progress and communication on the issue.

Use some of the comments made in this thread about why employment contracts are typically used - and why those conditions don't apply to you. Explain the hardship the terms of the existing agreement would have on you and your future.

Ask for a written response, and a meeting to discuss the available options. Make your letter polite, non-threatening and non-judgmental. Try to avoid a confrontation while letting your views be known.

Your letter will do several things at once. First, you will clearly establish your refusal to sign the existing document. Any concerns about that document becoming a de facto binding agreement will immediately vanish. You will put the ball squarely in managements' hands - where it belongs. They will have three options:[ol][li]Fire you on the spot;[li]Meet with you to find mutually agreeable terms; or[li]Think it looks too much like non-profitable work and procrastinate for a few more weeks or months. They may even drop the idea altogether.[/ol]I'm betting on 3. - based on what you have said so far.

Even in the absence of a written agreement, you have an "at will" employment agreement. That's okay, because it means that both parties must agree on your continued employment - and the agreement can be broken at any time by either party for any reason. The company made certain representations about the work environment to you during the interview process. Your comments suggest that you feel that you've been duped to some extent. They have broken the agreement already; at this point, you should not feel guilty about leaving if that is in your best interest. But look for a new job in a discreet manner.

Remember: look out for your own interests. I assure you that "management" is looking out for theirs -



Please see FAQ731-376 for great suggestions on how to make the best use of Eng-Tips Fora.

 

[Robert168]

When you are interested in a job, try to reach an agreement with that company. When you have decided to leave a company, try to reach an agreement with another company that can provide you with a job satisfactory to you. Either leaving or joining a company, try not to forget the obligations (and of course, rights). Obligations should be fufilled with or without a written agreement.

 

[JPatten]

I personally do not think they would enforce the clause that you cannot take another job in the province. I base this on your comment that the firm is a small firm. As we all know attorneys and courts cost money so it would take the firm time and money to enforce it.

I also, think that this question is best asked to an attorney and not in an engineering forum. No offense to everyone here but engineers typically do not know much about the law including myself. We just speculate what the legalities are.

 

[Focht3]

Hmmm,

Some of us do have experience in this area...from both sides of the table. My ex-partner wanted to explore having our employees to sign non-competes; I thought it was a stupid idea, frankly. I wouldn't want an employee who wanted to work elsewhere -

And you should also note that many of us have advised [blue]richarda[/blue] to seek local legal advice.

You should get used to negotiating and signing contracts. It's how business is done these days. Long past are the days of a firm handshake and a man's word, unfortunately.

Do you have some particular expertise in this area, [blue]JPatten[/blue]?



Please see FAQ731-376 for great suggestions on how to make the best use of Eng-Tips Fora.

 

[ERV]

JPatten,

I may just be an engineer, however, I preside over a substantial business interest. As such, it has been in my best interest to educate myself in points of law that may be of concern to myself and my business interests. It is not wise to underestimate a persons knowledge-no matter who it is.

If any party brings suit to enforce a contract, the prevailing party is usually able to collect reasonable attorney fees and court costs. Think about that before defaulting on a contract!

Wether this contract is enforceable or not is up to the local courts to decide.

"When a man with money meets a man with experience, either the man with the money gets the experience or the man with the experience gets the money" -unknown author.

 

[JPatten]

My comments before were not meant to offend anyone or suggest that engineers are not capable of negotiating or understanding contracts. I only wanted to caution anyone being asked to sign such a contract to get all the information needed before making such a significant career decision.

Focht3: In answer to your question, I (self-admittedly) am not an expert in this area. (Sometimes knowing what you don't know is more important than what you do know.)
I am married to a lawyer and have discussed these types of agreements with her, though not specifically the situation presented here. My wife is an attorney with an undergrad in Mechanical Engineering. She is currently legal counsel for a large engineering firm. She's told me that the law does not generally look favorably on these type of agreements, but that they can be enforced in most jurisdictions if they are written narrowly enough. She's also told me what I put in my original message, which is that firms do not usually enforce rights they have if it's not cost-effective to do so. (Still since the agreement could be enforceable, RICHARDA would be wise to check with an attorney who knows the law in the Province where the job would be.

ERV: With all due respect you don't go to a lawyer with an engineering question, so why would you go to an engineer for legal advice? Your statement that "the prevailing party is usually able to collect reasonable attorney fees and court costs" is not the rule in the US. Unless there is a contract provision stating that the "losing" party pays the prevailing parties fees and costs, each party would pay it's own costs.