I signed one of these contracts in 2006. I went to work for a company in product design and development, and since my work was new product design and development, everything I worked on at that time became the property of the company.
There was also a two-year non-compete clause that forbid me from working with any of their direct competitors afterwards.
I signed the contract because I wanted to do the work, and because I knew that all the other places would have me sign the same contract. I also thought that this company was the most progressive of the group. Finally, I wanted my ideas to be funded, and so in exchange for the time and the resources that they promised to put towards my work, I would provide them with the ideas. We were both taking risks to achieve a greater goal together.
In the end, they reneged on their side of the bargain and didn't provide the necessary funding to complete the production and testing that the product design needed. After trying to get the work done myself in-house by funneling time and energy away from other projects towards mine, it came to a head and it was acknowledged that they weren't going to fund the work and that we needed to part ways.
On the day that decision was made, I was escorted out, leaving everything behind, my notebooks, and all my digital research files.
Several years later, when they won a large contract for work that was in the area that I was working on, my manager took me out for lunch and said that I had just been about 5 years ahead of the curve, and that they hadn't had the resources to carry that type of research and development that far ahead of a clear billable opportunity.
When I asked him about the files and the notebooks, he said that nothing ever happened to them, they were all just filed away in the archives.
I left understanding their situation well. It's hard to fund something when it's not clear when the payoff will materialize, and when it did materialize, they were able to get there first anyways. So the loss of five years in R&D wasn't noticed, by them, their clients, or the industry.
The lesson that I did learn was - back up your files offsite, and have duplicate notebooks, one that is your private notebook and one that is your office notebook. Because when you sign a contract like this, you have to be prepared to leave everything onsite when it ends.
The irony with the 2 year non-compete is that after I left, non of the other firms were interested in even discussing the work that I had done. Which is why these guys were the only ones that I could have worked with in the first place, and it's why they were the only ones able to secure the contracts when the need for the technology finally arrived.
And there wasn't much I could do with the technology myself, since it was untested and unproved and I couldn't fund the research myself. So the non-compete clause didn't impact me much either.
Perhaps this sheds some light on why the contracts exist and why people like me sign them.
A couple years ago I had to sign a similar agreement at a previous job.
The problem with mine was that the company was a fairly large one which had completed numerous acquisitions in the last decade or so. Every little company they acquired had some product that was "out in left field" relative to what their core business was. So as these smaller firms were consolidated, this company ended up with all sorts of little businesses out there that I could never account for. I couldn't confidently say what was or was not related to their business or R&D, so I just stayed out of doing side projects out of fear of getting sued and felt pretty unfulfilled.
I ended up just quitting that job and going to work somewhere that I didn't have to sign any assignment agreement.
I had several f'ed up contracts in the 90s-2000s, and tried to negotiate each of them. In a fairly good position several times, as they had forgotten to have me sign the specific contract (non-compete, outside of CA) when they hired me.
I got fuck all, as well. In 2 of 3 cases I think it was the VC who set the contract terms - I assume it was easier to lose 10% of their engineering team than to renegotiate, and I wasn't willing to play chicken and see if they fired me.
I turned down a job because of this very issue. I was ready to sign and when I was reading the terms, it said they would own my side projects during the contract term if I worked on them. Hard no from me.
I once accepted an offer and the next day I put in my 2 week notice at my new job, and later the same day I found out from a press release that the my new employer was being acquired.
A year or so into the new job, the CEO emailed everyone in the company a restrictive NDA, non-compete, non-solicitation contract and told everyone to sign it. It included language about theft of company forms or documents among other things.
I looked at the metadata of the contract doc and the "company" tag was the CEO's previous employer. Which told me that the CEO "stole" the doc from his previous company, and was asking everyone to sign something saying they wouldn't do the same.
Because of that I decided not to sign it. Several other colleagues refused it too. No one was terminated, but there was a large staff exodus shortly after who were solicited by another former employee. I stayed on another 6 months to finish a project but left after that to join my former coworkers.
I would have been open to signing if I was compensated for it, but that option wasn't on the table, and I wasn't willing to restrict my future ability to find work with no benefit to me.
Lesson learned: Reusing legal forms from old companies can cost a lot more than a proper lawyer review would have cost. Don't take shortcuts when signing OR asking people to sign a legal document.
Oh yeah I was going to add that (but didn't think it was relevant) -- they're very un-enforcable (and a lot of the time illegal) in a lot of places (including where I am). I'm going to stick to it, though, for a few reasons:
1) I did sign it, and maybe a little bit of suffering will go a long way to helping me remember this lesson forever (and read contracts more critically).
2) I have almost 0 interest in the space the company was in.
3) I'm confident I can make a living without working in that space for a year.
No idea about the OP, but in my case every contract I signed contained some clauses that prevented me from speaking or acting in any way against the companies interests, at least while I was working there; just like a sort of non-compete agreement but applied more broadly.
Luckily I never had to test those clauses, but I'm sure had I done anything against them they would have destroyed me in court in no time.
If I was in the OP shoes I'd leave ASAP. One day someone will let the cat out of the bag anyway (coworkers, researchers, competitors doing reverse engineering, etc) and he could lose his job anyway if the company tanks. Not to mention being related to a technical fraud.
In my first frontend dev job for a startup, the contract was absolutely ludicrous. I believe it was something like I can't work in a related industry (tech) or with any clients of the company or the specific domain of the tech I was working on etc etc. For a year.
Had a lawyer look it over who said it was highly unlikely to be enforcable, then I got the company to basically remove the parts that didn't fly.
Yup. I work in medical devices, and a pretty niche area at that. When I left my previous company I joined a company doing essentially the same stuff, but at a much earlier stage. How could I possibly have done my job and also conformed to an agreement such as this? There's no way; I would have had to change industries.
One thing no one else is mentioned is that what is useful or relevant to the business is very ill defined. All future companies for the entirety of your career will take on some unknown risk related to what your previous employers considers relevant.
Companies hate ill defined risk. I run a consulting company and would never hire anyone who had ever signed a contract like this. It's too risky, if you did work for a client and some company I'd never heard of could possibly own that IP that could be company ending for me. If a client even just found out I hired someone who had signed a contract like that it could end a client relationship.
One of the few things I've learned over the last 10 years or so is to be much bolder in work/job relationships. If I see something in a contract that is too one-sided, I strike it out and bring it up and say "I'm not agreeing to that". Will I sign a contract with, say, a 5 year non-compete (even assuming the non-compete is enforceable)? Generally no, unless there's a huge compensation package tied to make up for the time when I can't use my knowledge in the market. Would I sign one with a 3-6 month non-compete? Probably.
15 years ago I'd sign anything. Today, not so much.
This isn't solely a Silicon Valley thing. An NYC startup I worked for for six months 15 years ago required me to sign a nondisparagement agreement when I realized that the company was going nowhere (the carrot was that I kept the signing bonus they lured me with).
I didn't catch that there was no time period specified.
Every year I receive a terse letter from their law firm reminding me of my obligations under the non–disparagement clause.
I once signed on as a contract engineer (mechanical, not software) for a Fortune 100 company. My contract was actually with a contract agency that this company normally uses. I had negotiated the details of the job with my manager and then met with the onsite manager of the contract agency to deal with the paperwork. The lady got bent when I actually took about 45min to read every single line of the contract. She got even more huffy when I signed it but crossed out and initialed about 3 lines of the contract and handed it back. She claimed that I could not do that. I told her to talk to my manager and run it by legal (I knew they really needed my skill set) and get them to initial the crossouts and mail me a copy. The lines that I crossed out legally claimed anything I might invent, create or produce at work or off-hours for the terms of my employment. So if I invented the proverbial better mouse trap on my own time this Fortune 100 company would have moved up a few notches and I would get my salary. Legal signed off on my edits and I went to work. So the moral of the story is don't be intimidated into signing something you don't understand and don't be afraid to seek changes to the contract if it is not acceptible.
I've worked in numerous jobs in the US and have never had to sign a contract. One tried to make me sign one of those 'anything you invent even on your own time is our property' documents and I told them no to which they said don't worry about it then.
The company I work for now was acquired awhile back and the software I work on is one of the main reasons for acquisition. I fully expected them to try and present some contracts, but they didn't. Most likely they correctly thought that I wouldn't sign it without some increase in pay and benefits, and they didn't want to give me any additional money.
He went through a phone screening, then a technical interview. They made him an offer and sent him a contract. A clause in particular caught his eye:
Employee fully and unconditionally grants, assigns and transfers to the Company any
and all Inventions created, developed, discovered, conceived, invented, learned, or
suggested by Employee during the performance of Employee’s obligations under this
Agreement and for a period of one (1) year thereafter, whether or not such
Inventions are made during working hours or on the property of the Company, whether
or not such Inventions are related to the business, activities or interests of the
Company and whether or not such Inventions are patentable, copyrightable, or
protectable with a trademark, service mark or otherwise.
He asked me to look it over, a more experienced eye I guess. As soon as I opened the document, big red flag, it was 15 pages long. I've never had anything over 3 pages. The more I read it, the worse it got. They really, really needled in on the invention thing, and had all these side rules that it included anything that wasn't even patentable, and that you wouldn't argue against any claim they made unless you could prove that your work had been done before starting there by producing a patent. They required 30-days notice before leaving, which in PA is illegal to stipulate. There were restrictions for two years against soliciting anyone they had ever solicited, not just their customers. There were statements that unpaid overtime was expected, which is also illegal in PA (employees are allowed to work unpaid overtime but it cannot be a requirement for employment). And there were weird things in there like stipulating that the employee worked exclusively for the CEO. What was the point of that? It was just a complete mess.
So I suggested he should get a lawyer to review it. In the mean time, they started pressuring him to sign, he told them it was with the lawyer right now (though he hadn't yet found one, he was just stalling), and they freaked. Cut him a check of a few thousand dollars to go away and agree to a gag order.
But I didn't agree to shit! However, I still won't name them because I'm fairly certain they'd launch a full-frontal libel lawsuit against me. Just one of those kinds of places.
One funny anecdote, I went through a relatively lengthy recruitment process for a company. The company, the role, the team, the tech, everything was interesting and enticing. We eventually agreed on compensation and the process moved on. I asked for a copy of the contract minutes before they had everything ready so I could read it without causing delays, which they complied.
I pointed out a few minor details but this one was sticking out so I was pretty clear that I was bothered by that. After a few of their tentatives to explain why and convince me it was fine and that clause had never been enforced, and that my comments had reignited internal conversations about this, in one call I was told they were in advanced talks with legal to make the change.
I told them I would be delighted to be in touch again when the clause was removed from my contract.
> Like a legally binding agreement your employers would typically give you?
Yes. It's a contract specifying what both the employer and you are agreeing to.
> Like does it guarantee you a job for a certain amount of time, or how does it work?
It can, if that's what you and the employer agree should be in it. It's just a contract like any other. They usually include when your employment will start, what your compensation is, what your duties are, and so forth.
They often also contain noncompete/nondisclosure agreements, agreements on copyright assignments, what happens when your employment ends, and so forth. I'm guessing that most people here have signed them, but perhaps weren't aware that's what they were or that the terms can be negotiated.
Typically, my negotiations involve removing the noncompete. Also, the terms very often include wording to the effect that anything I create during the term of my employment belongs to the company regardless of whether or not company resources/knowledge were used. I always have that removed.
> If the renege on it, can you sue them...?
Sure, just like any other contract. Although most of the ones I've signed have contained arbitration clauses. I've never bothered to try to negotiate those out.
> can I ask what field/vertical you work in?
I'm just a regular software engineer. I've worked for Fortune 500 companies, small companies, startups, and things in between. I'm a generalist currently working on industrial control systems, but prior to that I was in data security. But I've worked in a variety of different sectors over the decades.
After a 35-year career writing software for various companies, my biggest regret is that I never insisted on a written contract. If I had, the companies I worked for probably would have lost interest in hiring me. Professionals insist on written contracts. Tech workers do not, but they should. I believe this is what tech companies fear most.
We are fortunate enough that even the most mediocre among us can hold out for the next employer that doesn't demand this kind of control over you, or start your own company. I don't give a shit what a company says about their culture of work/life balance or whatever. If I see blanket IP clauses unrelated to non-compete, or like arbitration clauses that remove us from civil courts should a problem arise, I'm whistling on my way out the door.
I once saw a contract that stated I couldn't work in the field for TWO YEARS after terminating. Not just large machine equipment, but ANY mobile/web applications, related to integration with embedded systems or not. Yeah no thanks.
Your mind should be available for rent for $100k/year or whatever your market rate is these days but not for sale at that price. Sorry but I'm a Human as a Service. If you want to own me, you'll have to come to a better valuation.
They did not. One of the crippling points though, is that there's a clause in their contract stating that any work generated during the time at the company belongs to the company.
Is it still common for people to sign these agreements?
There was also a two-year non-compete clause that forbid me from working with any of their direct competitors afterwards.
I signed the contract because I wanted to do the work, and because I knew that all the other places would have me sign the same contract. I also thought that this company was the most progressive of the group. Finally, I wanted my ideas to be funded, and so in exchange for the time and the resources that they promised to put towards my work, I would provide them with the ideas. We were both taking risks to achieve a greater goal together.
In the end, they reneged on their side of the bargain and didn't provide the necessary funding to complete the production and testing that the product design needed. After trying to get the work done myself in-house by funneling time and energy away from other projects towards mine, it came to a head and it was acknowledged that they weren't going to fund the work and that we needed to part ways.
On the day that decision was made, I was escorted out, leaving everything behind, my notebooks, and all my digital research files.
Several years later, when they won a large contract for work that was in the area that I was working on, my manager took me out for lunch and said that I had just been about 5 years ahead of the curve, and that they hadn't had the resources to carry that type of research and development that far ahead of a clear billable opportunity.
When I asked him about the files and the notebooks, he said that nothing ever happened to them, they were all just filed away in the archives.
I left understanding their situation well. It's hard to fund something when it's not clear when the payoff will materialize, and when it did materialize, they were able to get there first anyways. So the loss of five years in R&D wasn't noticed, by them, their clients, or the industry.
The lesson that I did learn was - back up your files offsite, and have duplicate notebooks, one that is your private notebook and one that is your office notebook. Because when you sign a contract like this, you have to be prepared to leave everything onsite when it ends.
The irony with the 2 year non-compete is that after I left, non of the other firms were interested in even discussing the work that I had done. Which is why these guys were the only ones that I could have worked with in the first place, and it's why they were the only ones able to secure the contracts when the need for the technology finally arrived.
And there wasn't much I could do with the technology myself, since it was untested and unproved and I couldn't fund the research myself. So the non-compete clause didn't impact me much either.
Perhaps this sheds some light on why the contracts exist and why people like me sign them.
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