Non-Compete, Non-Disclosure Agreement

[MDGroup]

I have been working for a small company for over 4 years, and never signed a Non-Compete or Non-Disclosure Agreement.

Recently, the company has restructured and one of the new procedures is for all new employees to sign a NC/NDA when they are hired.
The discussion has come up very minimally to have all existing employees sign a NC/NDA.

Can a company require you to sign a NC/NDA (it wasn't part of the initial hiring requirements)? Can they terminate you for not signing?
There is no real benefit for me to sign, so can I ask for compensation in return for signing the agreement? What is reasonable compensation? (I am sure it will depend on how valuable the product and knowledge is)

If I ever decide to leave the company, is there any 'assumed' NC/NDA, or can I get a job down the street working for the competitor, designing the same products? (patented designs withstanding)

I like my current job and the company, and am not planning on leaving any time soon, but would like to know my options/requirements beforehand.

Thanks

 

[zdas04]

There is no standard. I have signed non-disclosure agreements with several of my clients and they range from very reasonable (e.g., you can't disclose any confidential information that you learned from them until it is in a publicly available source) to outrageous (e.g., one company wanted me to sign a document that would have prohibited my talking about pumps in any configuration no matter what the source of the information forever, I didn't sign that one),

Non-compete is another thing altogether. I won't sign them. It has made for some hard feelings, but that is their problem not mine. The problem I have with non-compete agreements is that it is nearly impossible not to make them one-sided. You are never adequately compensated for drastically curtailing your future employment opportunities.

If you do decide to sign it you need to have your own attorney review it because it is easy for an innocuous phrase to suddenly become the key issue in a lawsuit. At the least the NC agreement needs to be strictly limited in terms of geography, industry, and the definition of "competing firms". Some of these things will prevent you from practicing Engineering for anyone, anywhere, forever. Others will keep you from going to work for a firm that has any client (or product) in common with your present employer--this can be a killer because big corporations use millions of contractors all over the world and the NC can keep you from going to a firm in Detroit because it sells toilet paper to GM in Indonesia.

Companies can shove these things down the throats of existing employees and make them a condition for continued employment. I would read the document, have a lawyer advise me and either sign it, require modifications (which your employer will not accept), or accept termination. Losing a job over refusing to sign a one-sided agreement is not the end of the world, even in this market.

David

 

[JLSeagull]

Instead of other engineers, I use a pre paid legal service for such advise. I am not always happy with thier services but this is their field of knowledge.

A non compete clause would be difficult to enforce if your next job is not a direct competitor.

The lawyer can also advise the legal consequences to mitigate a job if refusing to sign if wrongful termination potential could exist.

Another option is failure to respond. Don't refuse to sign - just don't sign. (I didn't say that it was a good option). If asked advise that it is under review by your lawyer.

 

[TheTick]

Non-disclosure is generally a fair thing to sign. You have some fiduciary legal responsibility anyhow, whether you sign or not.

Non-compete is stickier. The language of most non-competes is unenforceable, if not downright illegal.

The key with non-competes is that most states and provinces have laws about restraint-of-trade. Your employer can not make you sign away your right to make a living at what you do.

Whatever you sign, your employer can not prevent you from taking another job with another company, unless the terms are very specific (i.e. time limits, specific employers). Where it really matters is if you are starting a business that competes with your employer. Then your employer would likely be able to stop you.

Sign it and get on with your life.

 

[rbulsara]

I agree with the above comments. If you are remotely thinking of staring your own business, do not sign the non-compete.

Other than that they cannot prevent you from getting a job with competitors.

Can they fire you for not signing? I guess, but if you are good at what you do I would not worry about it. You can politely ask what if you do not sign it!

I had singed non-compete 10 years ago, but went on my own about a year ago anyway. I am doing just fine without clients of the previous employers! So it is a non-issue though. The non-compete limit is only for 2 years in my case. However, in retrospect, I would not have signed the non-compete if I had thought through it.

Rafiq Bulsara

http://www.srengineersct.com

 

[rbulsara]

On the other hand, once the waiting period is over I will not have any guilt going after the clients of the previous employer!!

They would have gotten more out of me, had they asked for a gentleman's promise not to go after their clients.


Rafiq Bulsara

http://www.srengineersct.com

 

[MDGroup]

Thanks for all of your input.

I didn't want this post to come off as the big corporation trying to push around the working man. Everything is amiable at this time, and i don't expect any real conflict.
But, I also don't want to do anything to screw myself down the road.
The more I know and think about it beforehand, the more prepared I will be for whatever comes of this.

 

[hokie66]

Was given one of those once. Stuck it in the bottom drawer, unsigned. No one ever noticed.

 

[patprimmer]

For once I agree with hokie.

Leave it. See if they notice or push the point, they probably won't.

Re the legal advice, a lot depends on where you are. If you are in the USA or anywhere with similar employment laws to the USA like Aus, NZ, the UK, most of Europe then as mentoned above, it is against the law to prevent you from fairly earning a living. Also as mentioned above anything you do for your employer is theirs whether or not you sign anything, and while you are not allowed to steal customer lists, you are not required to undergo memory eradication procedures. There is a fair and reasonable middle ground.

If someone pushes the point that they want me to sign something that will restrict me from seeking further employment, I ask if they will continue to pay me until I find a suitable job that they approve of.



Regards
Pat
See FAQ731-376 for tips on use of eng-tips by professional engineers &

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[hokie66]

Your memory is failing, Pat. This is at least the second time we have agreed.

 

[patprimmer]

Good grief hokie

You might be turning pink or I might be turning whatever colour a republican is. ;-)



Regards
Pat
See FAQ731-376 for tips on use of eng-tips by professional engineers &

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[Ron]

Non-disclosure and non-compete are clearly separate issues. Check with labor board (since you are in the US) about forced signing after employment...probably not legal.

Be careful about signing a non-compete agreement. They are enforceable if a reasonable geographical area is given (say 100 miles) and a reasonable time period is given (say 1 year).

If working for a national or international firm, the geographical area often applies to each of their offices...that can be very restrictive.

 

[patprimmer]

Ron

Are you applying the rule of thumb that if someone does not say where they are from, they are most likely from the USA.

Regards
Pat
See FAQ731-376 for tips on use of eng-tips by professional engineers &

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[Ron]

Pat...nope, I checked. hokie66 has taught us well about presuming such!!

Ron

 

[DRWeig]

Just a toss-in for this discussion, but my non-compete is very fair. Period of a year after termination or quitting, company has the option of paying me my old salary or letting me go to work for a competitor. Then they have an option to renew for one more year.

I either get to take the new job or else get paid not to take it -- which would give me time to perhaps invent the next huge consumer product or write the great American novel, eh?

Not all employers are so one-sided...

Good on y'all,

Goober Dave

 

[zdas04]

DRWeig,
I think that is the exception that proves the rule. Anyone would look favorably on an agreement like that. The company that uses it is probably a great place to work.

I see Master Service Agreements like that sometimes (fair, reasonable, good protection for both sides), but they almost always come from companies too small to have an HR department. The contracts from the big guys are universally one-sided, often to the point that the only people who sign them are folks with no intention of honoring their committments.

David

 

[TheTick]

Sign it with your opposite hand and misspell your name (or just use another name).

 

[patprimmer]

Tick

Somehow, I think that is more likely to get you more onto the hook rather than off the hook if it blows up.

Regards
Pat
See FAQ731-376 for tips on use of eng-tips by professional engineers &

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for site rules

 

[MacGyverS2000]

Ron,

In the "at will" states, they could ask you to wear green every day and it would be legal. Unless it is some form of harassment, they have the right to put whatever conditions they want on employment, initial or continuing.

Dan - Owner

http://www.Hi-TecDesigns.com

 

[Ron]

Dan,
You're right...I live in one of those states. Non-competes are hard to break here.

Ron