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

 

[Focht3]

Were you asked to sign this agreement before starting work, or afterward? Will you receive any additional compensation for signing it? What do you get out of the deal?

The employment agreement itself may not be enforceable in many jurisdictions - it would not stand up in Texas, for instance. We have a pretty strong "right to work" law (and tradition) that makes these kinds of agreements worthless. And you are an EIT, so they will have a hard time enforcing this until after you earn your PE.

Personally, I would not sign it. I'd say, "Thanks, but no thanks" and prepare to walk out of the door. If they are serious about the agreement, they will let you leave. If not, they will offer to change the agreement.

You can also consult with a lawyer who specializes in employment issues. S/he can tell you whether the agreement is enforceable -



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[semo]

The "No-Competition Agreement" is starting to become more prevalent in some areas. My past employer started including this in their agreement. Putting a termination date on it would also go against its purpose. The longer you are employed with them, the more clients you will become personally involved with. If you leave and work on your own or with another local firm, you have a potential opening on obtaining their work at your new location. They can candy coat its purpose however they want; but, I think the bottom line comes down to: They don't want their workload stolen. This is understandable, they have put the time and effort into obtaining these clients.

As far as how enforceable this is, I agree with Focht3, you need to talk to an attorney. Especially if you are really interested in working with this company. I think one of the legal points in the matter is "Can a company force you to do something that harms your well being?"

I've only had 2 employers in the past 14 years and did not sign any contract at either so I also agree with Focht3 that I would not sign such an agreement. The company either wants me or it doesn't. From newspaper and magazine adds, It looks like there are plenty of engineering positions available right now in several market areas.

 

[Focht3]

The issue becomes much more serious if the firm is located in your (or your wife's) home town.

Tread lightly, but don't be pressured into signing an agreement...



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[richarda]

THanks for the advice semo and focht3.
I agree that the situation is a bit touchy.
The unfortunate thing is I live in an area where the engineering market is not so great because of the general economic conditions of the area and the lack of large scale projects.
I actually am working with the company already. I took the position because I was in need of employment and was unemployed for about 8 months. They had forwarded me a draft copy of the contract after I verbally excepted the position and we were to discuss any issues during my first week. I have been here four weeks and they have not had the time to meet with me regarding the contract and have stated that they will have it finalized early in the new year.
They said they have shown it too a lawyer and said I may do the same. I'm not sure how strong they will adhere to the 'no-competion' clause. I'm hoping that I can convince them to do a trial period of say 6-12 months at which point I can decide if the position fits my career goals etc. and it also gives them some time to evaluate my performance. This was how it was with my previous employer.

Once again thanks for taking the time to repond.

Rick, EIT

 

[Focht3]

Good approach. And the economy may be much better in 6 months.

Please take this the right way, and don't be offended - you should be able to argue that you pose little or no economic threat to the company. After all, you were out of work for 8 months - do they REALLY think you will acquire a bunch of valuable clients and steal them? If that were likely, you wouldn't have been unemployed for 8 months...

Good luck - keep us posted.



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[dik]

In addition to the above...

"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"

not good... you may never be able to work for a year! I made an error several years ago regarding signing a non-disclosure/confidentiality agreement that was more than onorous... and it prevented me from obtaining employment in the airport engineering field that I had been actively involved with for several years... I have since refused, with no harm done...

"telling me its industry standard but i have worked in 3"

This is not industry standard... although it is becoming more common.

"i leave the company? They also said this is to protect their 'special and unique' methods from their competitors."

'special and unique' methods are for lawyers, generally, unless the work is really 'special and unique' it's usually 'flash' and has little substance... Can they identify what they have that is 'special and unique'? What skills are you bringing to the outfit? do they have a listing of a 'special and unique' protocol? or is it a 'catch-all'?

"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."

Unless they 'fire' you or 'lay you off' (also considered firing in some jurisdictions)... What provision do they have to protect the 'special and unique' information in the event you get fired?

"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."

You may want to have them identify the 'special and unique' items that they wish to include... as well as provide a termination date for the contract and not leave it 'open ended' at their indulgence. They may not hire you without signing it and you have a decision... You, also, may want to talk to a lawyer...

Another concern, if the matter's not resolved shortly, then, you have agreed to the contract... since you have a copy of the contract and you have accepted employment by them. You might send them a note/memorandum to the effect that you do not agree with several terms and you will review the matter of the contract in a year.

 

[pablo02]

The "non-compete" clauses are being used more frequently in an effort to restrict the employee's worth to local employment as mentioned above -- also, as suggested, consult a lawyer who might provide alternative wording, either reducing thae area of restrictions, or limiting the competition to "not engaging existing customers", etc. it is way too inclusive as it is written...

most companies want and some deserve some protection of their intellectual properties, etc... your lawyer should be able to come up with some wording that is agreeable to both parties -- and keep you employed there without bruising everyones egos...

 

[Focht3]

Good post, [blue]dik[/blue]. I agree with almost everything you posted, excepting the following:

Another concern, if the matter's not resolved shortly, then, you have agreed to the contract... since you have a copy of the contract and you have accepted employment by them. You might send them a note/memorandum to the effect that you do not agree with several terms and you will review the matter of the contract in a year.

I disagree. Please note that [blue]richarda[/blue] has been told,

"They had forwarded me a draft copy of the contract after I verbally excepted the position and we were to discuss any issues during my first week. I have been here four weeks and they have not had the time to meet with me regarding the contract and have stated that they will have it finalized early in the new year."
{emphasis added by [blue]Focht3[/blue].}

I don't think that a formal agreement has been reached - even verbally - since the agreement is still in flux. And I don't think any of the key components have been agreed to by [blue]richarda[/blue].



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[dik]

Sorry Focht3, I guess there's a disagreement between engineers... but if you're working, have a draft contract, and continue to work after receiving it, in the absense of anything else, it may likely be construed that the draft contract is the contract and is binding... It's in his interest to get this clarified ASAP...

 

[pablo02]

Unless some of the discussion is in writing, I tend to think that dik's thoughts are more likely to be the ones followed by the courts if the issue is ever litigated (it becomes a "who said what when?&quot-- ricarda has the draft contract in hand, what else does he have in hand? -- it becomes an uncontested condition of employment (maybe) -- (how many of the other engineers there have not signed the contract?)

again, although I hate lawyers with a passion, there are times when one in your pocket is worth their weight in gold... and this may be one of those times...

 

[jheidt2543]

richarda,

The longer you go without resolving this the worse your position becomes and you could very well end up as dik suggests, accepting the employment contract by default.

I would suggest drafting a letter that follows the outline of the contract terms and list, in a very professional way, each of your objections. Then your cards are on the table and you have staked your negotiating position. Everything is negotiable until the contract is signed. This also helps you clarify your thinking.

You might accecpt the items that cause you heartburn for some type of compensation so, you should be thinking about what you would want in return for signing each contract provision you list; a signing bonus, 5% extra pay, one added week of vacation etc,

In the end, it comes down to how much do you like the firm, how much do you want to work there and how much they want you to stay. In many respects it is like getting married, in fact you spend much more of your waking hours at work then at home with the wife and kids so, choose wisely and don't take it personally - it's just business.

 

[richarda]

Thanks to everyone for the great advice.
I'll keep you all posted on the developments.

 

[dik]

RichardA

Thanks, I'd be happy to find out how this ends... keep the forum posted.

You might tap out a one-liner stating the draft is too vague and requires clarification... namely identifying what is special and unique and if it is 'proprietary' agree not to use or market it specifically. Also tie down a specific duration and that you are prepared to enter into a new contract at that time (modified as appropriate).

I almost spend more time talkin' to lawyers than playing engineer, it seems... I don't really have a job description... I just do the work! If I were to exclude items in it from future work, I'd be twiddling my thumbs (unless that were included <G>). Carefully review the 'Job Description' part... you may have to take up a new vocation in order to work. There are likely lawyers, in your area, that have experience at this type of thing that you can consult with for a minimum fee... a couple of hundred dollars spent at the front end, may save you a pile of heartburn...

 

[aspearin1]

I am also under a similar contract. However, the stipulation my company has put on the contract is that if I give them 30 days notice before leaving, and give them adequate time to evaluate the competetive potential of this other company, they are either required to let me work for the new company or pay me 1 year of salary that the new company would have paid me (thus giving me a year off with pay, and allowing me to work for any company after the year is up). Generally, these clauses only hold water for upper management or marketing professionals who not only take their knowledge to the new company, but also their customers and high account contacts. Often customers' commitment lies with the service rep, not the company. If you wish to work for a new company, I say do it. If you pose a threat to your current company, they may sue. More than likely it will cost too much for the company to sue you, and even if they do, you'd likely settle out of court for a stipend. A company cannot legally keep a person on unemployment. Just don't do anything illegal, like expose confidential patent or shareholder information. I say sign the contract and behave with the ethics you were trained with. You should be fine.

aspearin1

 

[dik]

aspearin1:

Best not to 'come from behind'... If something's not in place, it's a lot easier than worrying about legal costs... The threat of litigation is often sufficient to deter someone.

 

[dutchie]

not sure where your coming from, but around our parts (ontario, canada) the non-competition clauses are only being upheld in regions where there is economic diversity and the clause doesn't hamper future employment. It sounds like your in a region where such a clause would cause you hardship therefor it would likely not be upheld if you were to test it.

Also, I'm in agreement with focht3, as long as you are negotiating the contract (and since they haven't met with you to discuss particulars) it would not be binding. but you certainly can't hurt your position to put down your concerns in writing and open them up for discussion. It's all part of the game, and you may as well get used to negotiating now.

this is an interesting issue, I will be interested to see how it plays out.

good luck
dutchie

 

[Robert168]

A job with strict limitations in the contract is better than unemployment. This is especially true with professionals. A gap in employment may damage the career of a life.

 

[SirAl]

Hi richarda

A good post. I, personally, don't have a problem with a contract arrangement for a young gun entering the work force. Employers may spend considerable time and resources in trianing and developing their young talent. I do have a problem with a lack of a termination date though. Such a contract should not be binding indefinitely.

 

[BigH]

Just saw this after a few days of R&R. I guess, as I've been with the same company for quite some time, I've not heard of this exclusion of practice before - in a field in my province, etc. for 1 year. I remember in the hey days in Vancouver during early 1980/81, people would go out for a coffee break in the morning and land a new job - then say adios at lunch! - now, that's not right!
I would doubt (hope) this is enforceable unless they are willing to pay you for the year &quot;off&quot;. You might work out different wording to protect, as someone said, existing clients of your firm; but then, again, you are presently only an EIT -so your exposure to clients would likely be limited.
Still, I suppose you could get employment with a firm in another province and be &quot;transferred&quot; back to your own, eh??
My first off the wall remark would be . . . can't say it here.