How a Legal Journalist Got Fired for a Non-Compete

https://bol.bna.com/how-a-legal-journalist-got-fired-for-a-non-compete/

by weatherlight • 10 years ago

192 204 10 years ago

bol.bna.com

bluejekyll3• 10 years ago

I can see non-competes as valuable for people who know business details that would be considered trade secrets (and only for a limited period of time). But for people further down the ladder, this seems like an extremely high burden.

crdoconnor• 10 years ago

I can see non-competes as valuable for people who know business details that would be considered trade secrets

It would still be in the public interest to do away with them at that level.

bluejekyll3• 10 years ago

I was unaware of the UK laws around this. That would take care of this pretty quickly even at the senior levels. If the company really believes that you have valuable knowledge, then the burden is on them (in terms of financial burden) to compensate you for not taking the other job.

Obviously, they would only do this in the cases where they are worried that it really could harm their competitive advantage. It would also save companies money in the long run given the number of instances that two companies go to court over things like this.

golergka3• 10 years ago

That conversation should take place before you sign something.

After you sign something, it's not important if it's reasonable or not: you have to uphold it.

masklinn• 10 years ago

After you sign something, it's not important if it's reasonable or not: you have to uphold it.

It very much is important, and you don't necessarily have to uphold it. In the vast majority of jurisdictions unreasonable[0] contractual clauses are unenforceable and may even be sanctionable.

[0] what is or is not unreasonable being the primary variable. CNC clauses are generally unreasonable in california (reasonable CNC are related to goodwill and shared businesses) for instance, and in mainland europe they are limited and often must be compensated for their whole duration e.g. in Germany the leaving employee must be paid at least half their gross salary for the whole CNC term (no more than two years) and unreasonable clauses can be invalidated, lest the whole CNC be invalidated.

eropple• 10 years ago

This idea is not upheld in any part of American jurisprudence. Plenty of contractual conditions are straight-up not enforceable; this is why so many have severability clauses.

tomg• 10 years ago

After you sign something, it's not important if it's reasonable or not: you have to uphold it.

This is simply not true. Trivial examples include a contract without consideration, or an apartment lease with clauses that attempt to restrict rights granted by local law (very common in NYC). Most non-competes in the state of California are not enforceable as well, even if you agree to it.

gherkin0• 10 years ago

After you sign something, it's not important if it's reasonable or not: you have to uphold it.

That's frankly a ridiculous idea that clearly leads to injustice. Contracts are often between people who are not equals, where one party has less ability to negotiate or walk away. If the weaker party does not have extra protections outside of the contracting process, the stronger party could use its power to abuse them.

dragonwriter5• 10 years ago

After you sign something, it's not important if it's reasonable or not: you have to uphold it.

This may be your personal moral preference, but it very much is not an accurate reflection of contract law (at least, not in any US jurisdiction.)

st3v3r5• 10 years ago

No. These agreements are immoral. There should be absolutely no obligation to uphold it.

e0• 10 years ago

Trade secrets are already specifically protected, even without non-compete clauses (https://www.law.cornell.edu/wex/trade_secret). A former employee that divulges trade secrets will get into trouble for violating that.

bluejekyll3• 10 years ago

Thanks for sharing that. If any lawyers are reading this, I would be curious as to why non-competes exist if the above is true. I suppose I knew that implicitly, i.e. joining a competitor and divulging your previous employers secrets feels illegal, regardless of law.

In theory, if trade secrets are already protected, then either the non-compete's are setup as a double protection, or they are only being used to restrict movement. (neither of which seems fair in the economic sense)

cmdkeen• 10 years ago

The UK's approach is generally to have "gardening leave" - if you want to be able to ensure I can't work for a competitor for 6 months after leaving you agree to pay me my full salary for 6 months after I leave in return for me not working anywhere else. It's fairly common in the client facing world of finance for instance to stop someone walking off with all of their clients to a new firm. For me at least it seems a fairly sensible compromise - 6 months in that example is really at the top end of the spectrum, usually it is 1-3 months. That's plenty of time to have a holiday, learn some new skills and arrive at your new job refreshed and ready to go.

The length and scope of UK non-competes is fairly heavily restricted by the courts and the onus is on the employer to justify the business need. An example like in the article would be unthinkable.

acveilleux3• 10 years ago

Non competes in Canada are also enforced very selectively. The standard legal advice is to structure the agreement such as it still stands (severability) even if specific parts of it are struck down because of how likely that is.

For non compete to work, the affected person has to have specific knowledge to protect (usually client accounts) and the restriction needs to be narrow to specific industry ("software" is not good enough, "Point of Sales software for Bars and Restaurants" probably is), duration needs to be only as short as it needs to be and geographically bounded.

The only time broad non-compete really hold up is for things like sales of a business where the founders are barred from immediately competing with the company they just sold.

nielsbjerg• 10 years ago

In Denmark if the company you're leaving wants to uphold the non compete, they're obliged to pay half of your salary for the duration of the clause.

FWIW I've been under non compete, and a couple of other clauses in all of my previous jobs, but they were never enforced. The legal power of non compete in Denmark is from my observations very weak. So much so, that an employer of mine vaived all clauses after a while since it was a bigger hindrance when hiring people than benefit when people left.

FussyZeus3• 10 years ago

How is a non-compete legal anyway? You're basically saying that a person can't get a job with a competitor in the same industry, how is anyone with any decent skillset supposed to get a new job without somewhat violating a noncompete?

enraged_camel• 10 years ago

Most non-competes aren't enforced because they can't be (due to the reason you mentioned). BUT it still adds a level of risk to people looking to jump ship.

ghaff5• 10 years ago

And many firms just don't want to deal with the potential hassle/exposure of hiring someone who has a non-compete that could potentially come into play.

In a former role, one or two of the larger firms in the space were known for having non-competes they were known for trying to enforce that basically said that if someone left--even if they were laid off--they couldn't do the same type of job for a year. Someone I know who left one of those firms just took a year off before going out on their own. The firm I was at wouldn't even think of touching someone to whom those non-competes applied.

fweespeech• 10 years ago

Depending on the state and situation, it frequently isn't legal.

But yeah, non-competes are unethical bullshit.

Zikes• 10 years ago

It completely removes your negotiating powers in regards to raises and promotions, as well. What incentive does an employer have to pay their employees fairly when they know that said employee is legally prohibited from working anywhere else?

It seems the surest way to hamstring your own career is to sign a non-compete.

Xylakant• 10 years ago

That sort of depends. My last non-compete contained the provision that if the employer needs to continue paying the full wage during the time of the non-compete. That doesn't fully remove the lock-in but it makes it a costly option, leveling the playing field somewhat.

golergka3• 10 years ago

In a lot of professions, you can relatively easy move to another industry. Software engineer who had developed very valuable medical algorithms may sign a non-compete and then get a next job in game development, for example.

Also, a lot of non-compete agreements are more specific than an "industry" as a whole and target specific product type, niche or something like that.

twohlix_2• 10 years ago

I've had to negotiate scope of NCs at all but one job. I've had to change enforcement period length and industry scopes. So many times the scope has been interpretable as all software ever, and I've seen terms of 2 years. Generally I'll accept NCs for the same industry and for up to 6 months after termination.

mstade2• 10 years ago

Most non-competes aren't enforcable and employers know this. They exist to bully people into submission – in the case of the article, Law360 bullied the journalist, but also Reuters Thompson. They know they'd probably win if they challenged Law360 in court, but it's just not worth the cost to take the fight, when it's easier and cheaper to just fire what is essentially a low-level employee.

I know a similar story. A person I know took a job with a tier one financial institution, knowing full well that the company they were previously employed with would cause a stir. Sure enough, upon starting the new job, the person in question received letters threatening legal action. This person is not easily scared, so simply ignored the letters. The new employer however received similar letters, and just as with the story in the article, they fired the employee simply because it wasn't worth taking the fight – there's always someone else they can employ.

It's unethical, and I'm glad the AG looks into it.

walshemj2• 10 years ago

Possibly a company's GC should be responsible for this - lets hope the AG gets some lawyer disbarred for this.

FussyZeus3• 10 years ago

Seems like it wouldn't even be a fight, I'm not sure I'd want to work for an employer that would so readily throw me under the bus like that anyway.

eloisant• 10 years ago

Legality depend on the place (country, state). They're legal in some cases but with restriction.

For example in France it's legal, but with conditions:

* it must be limited in time (e.g. usually max 2 years) and space (e.g. same city, not the whole country)

* if they want to "activate" the non-compete they have to pay you something like 30% of what you were making for the time they want to block you

* it shouldn't prevent you to get a job, meaning they can prevent you from going to the direct competitor but not block you for the whole industry

pc866• 10 years ago

Disregarding their use in tech or journalism, there are uses for them.

My wife and I own a gym (in addition to our full-time jobs) that has several salaried trainers on staff. They sign a non-compete that for 1 year from the date of termination, they cannot take a trainer job at any gym within a 5 mile radius from our location, and they cannot own more than 20% of any gym located within a 10 mile radius.

This prevents them from opening up shop across the street and taking half the clients with them. It prevents them from doing the same with a nearby competitor.

It is limited by time, has a specific geographic area, and is only for a specific job. They can do whatever they want beyond a 10 mile radius on day 1, or they can open up a gym on day 366 anywhere in the world.

We've never had to litigate it because it's never come up, and if someone wasn't happy and really wanted to get a job at a Gold's two miles down the road, we would probably let them provided they didn't spend their last week giving our clients their new business cards or something.

kodablah• 10 years ago

and taking half the clients with them

I think there is a big difference here between non-compete and no-poaching agreements. At least yours is tailored to a radius, but I don't know that your narrow definition of non-compete is really the same.

borvo2• 10 years ago

Surely you provide your customers something more than just a building with some trainers in it? I'd focus on that, rather than silly contract games.

FussyZeus3• 10 years ago

That one seems far more fair to me though, just because you're limiting it to a certain distance around your particular shop (and I know gyms are super competitive so the protection measures make sense).

It's not like you're saying you can't get a job or own a gym anywhere on the planet for one year after your resignation or something to that effect.

golergka3• 10 years ago

How do you sign something first and then complain when it gets enforced? Even if she wouldn't get fired from her next job, her getting another job in a field covered by non-compete already shows that she didn't pay attention to her obligations and easily violated them.

I have been in this situation myself: a company that wanted to hire me presented me with a non-compete agreement. I naively think that I should expect contracts and obligations that I sign to actually be upheld by all involved parties, including myself. If I signed it, nobody would fire me from another position — because I don't violate contracts that I sign, and I wouldn't apply for another position in the same field.

Instead, I declined to sign it in the current form, explained my problems with it to an HR, and one day later got an edited agreement that had a non-compete with a reduced scope (only companies making similar products).

derekp72• 10 years ago

The problem happens when you accept a job offer, quit your previous job, then during new hire orientation you are given a stack of "standard HR forms" to sign. You are never told "Take these home and have your lawyer look them over" (how many of us even have a lawyer?), and are given the impression that everything is boilerplate.

vonmoltke• 10 years ago

On top of that, you always run the risk (however small) that the company's response to your red-lines will be "you're fired".

frandroid• 10 years ago

That's usually part of the employment contract, so it's not something you'll be shown after having gotten hired, and if it was, it would have even less standing than if the clause was included in the employment contract.

When I got hired by Microsoft, I was specifically told to get a lawyer to review the contract before I sign it. I did and my lawyer promptly told me the same at the person here, which is that the two non-compete clauses were so broad as to be unenforceable.

When a "partner company" to my MSFT division kept hiring our staff, Microsoft didn't try to enforce the non-competes, but instead threatened to sue the partner if they kept at it.

mikeash6• 10 years ago

People really need to learn that there's no such thing as a boilerplate contract, everything is up for negotiation, and when somebody tells you to sign something and not worry about it because "we never enforce that anyway" then they're either bullshitting you or they're complete idiots.

This sort of thing ought to be taught in high school, along with other basic adult concepts like how to get a bank account, how credit cards work, how to vote, and how to pay taxes.

It's bizarre how such important things are left to each person to learn on their own on an ad hoc basis.

scardine• 10 years ago

How do you sign something first and then complain when it gets enforced?

Reminds me of the plot from "The Merchant of Venice".

Suppose you are in a desperate situation where you absolutely needs work: would you start to complaining about imoral demands on the contract or shut up and take the job?

That is why non-compete agreements for employees are not enforceable in most jurisdictions - Shylock can't take his pound of flesh.

MrSourz• 10 years ago

I agree with you; people need to take this stuff seriously!

Just after I started university in Ontario I turned down an internship in a R&D department of a company in Lichtenstein. I was so excited when I got the offer and then so disheartened by the non-compete and non-disclosure agreements.

There was definitely a little bit of meaning lost in translation and essentially was scoped to cover the industry material and didn't specify a termination date.

While I didn't think they'd be enforceable I knew they didn't need to be to become burdensome. What's interesting to me is clearly it took their employer time to find out about the prior agreements. Either this was something missed during the hiring process or something the candidate chose not to reveal.

Either way I fully understand why they were let go. If you're a business you don't want to invest in someone that a competitor can apply leverage on and has the legal grounds to do so, which would likely result in them quitting.

jimbokun3• 10 years ago

The problem is non-competes have become an almost universal part of the employment process, and if they were ever enforced at scale, would bring the U.S. economy to a screeching halt. And it is becoming increasingly difficult for employees to negotiate these agreements and remain employed.

The only thing keeping it from becoming a crisis already is selective enforcement. If every corporation suddenly decided to enforce all of their non-competes, the job market would collapse.

stale20023• 10 years ago

What if the contract is illegal and unenforceable? Then they aren't really obligations are they?

I've certainly done this. Signed a contract, with provisions that I knew were 100% illegal, and then months later, after I left and they tried to enforce the contract, I told them to fuck off, because the contract was unenforceable and they knew it.

borvo2• 10 years ago

A court has to decide that. The employer likely has more resources than you and can tie you up wasting time and money in proceedings. That is the real issue behind this article. This company decided it was in their best interests to make an example of this person, and now she's unemployed.

srussellkraft5• 10 years ago

The way the non-compete is written could bar a Law360 employee from working at any news outlet that covers legal news, in any capacity. Getting a job in another field means switching careers.

wyldfire• 10 years ago

What's the duration limit? It can't be perpetual, can it? That would be ludicrous.

mc32• 10 years ago

What's the situation in New York, do you have give cause? Or it it at will and you can fire for no reason?

Interesting here is that it's the new employer firing an employee for non compete rather than the previous employer trying to enforce it against the signator.

chimeracoder• 10 years ago

What's the situation in New York, do you have give cause? Or it it at will and you can fire for no reason?

Generally, New York is 'at-will', though it depends on the circumstances of employment: http://www.ag.ny.gov/labor/can-you-be-fired

Note that New York City also has a some additional protections that are not present state-wide[0]. I'm not sure if any of those come into play here.

[0] For example, discrimination against gender identity is protected in NYC and Long Island, but not state-wide. IIRC New York also protected against discrimination for sexual orientation before SONDA (state-wide law) was passed.

jchendy2• 10 years ago

Interesting here is that it's the new employer firing an employee for non compete

She wasn't technically fired for non-compete. From the article:

On the application there was a question asking me to check a box acknowledging I wasn’t subject to any restrictive covenants that would prohibit me from doing my job at Reuters. I checked it.

[...]

I was technically fired for “dishonesty,” because of the box I had checked.

mbrundle2• 10 years ago

I've worked for several startups (US and UK) where the contracts contained very broad restrictions like this non-compete. Fortunately my wife is a lawyer and has helped me to read and red-line them, and then push back and get these sections rewritten. This is something I would NEVER have thought to do by myself, and I don't know many other tech people who do this either. I don't know the legality of these clauses, but my impression is that the companies don't really care - it's easy to put overly restrictive language into their contracts because they have little to lose out of it, as an employee is unlikely to undergo expensive future litigation to sue over it.

Bottom line - there needs to be (a) some low cost support mechanism for people to be able to check whether their contracts contain anything overly broad that could hurt them later, and (b) some way of educating potential employees that they should read contracts in detail, and that they can challenge contracts and push for changes before signing them, and not to treat them as a binary sign as-is/no-sign decision.

njs12345• 10 years ago

Luckily, in much of Europe, overly broad non-competes aren't enforceable: https://en.wikipedia.org/wiki/Non-compete_clause#Europe

chinathrow2• 10 years ago

Read the article. It's not about being enforceable. It's about having a liability if someone is under such an non-compete.

potatolicious• 10 years ago

They're largely not enforceable in the US either - non-competes are thrown out in court all the time.

Enforceability is only one (small) dimension of the problem - arguably the chilling effect it has on future employers (who simply don't want the show up in court, even if they will win) is larger.

The threat of litigation is often stronger than the litigation itself, especially against smaller entities. Overly broad non-competes are more a bullying tactic than they are an actual contract.

pc866• 10 years ago

some way of educating potential employees that they should read contracts in detail

I don't mean to sound overly dismissive, but isn't this just part of being an adult? Meaning, don't sign legally binding contracts that you haven't read. Don't lock yourself into a potential course of action, or waive rights to certain things (e.g. arbitration agreements), without understanding the ramifications should something go pear-shaped in the future.

Some of these are sign as is or don't sign, unfortunately. My wife and I were about to buy a car maybe three months ago, and throughout the process we're signing paper documents for everything. Most of it printed off a dot matrix printer, if you can believe that.

Then we get to the arbitration agreement. Handed an iPad with the agreement on it, no ability to change anything, and a signature pad to sign. I put up a fuss and said that we weren't going to sign the agreement, but eventually we had to walk away from the deal because they would not proceed without it and would not provide a paper copy we could red line at the desk.

mikeash6• 10 years ago

It is part of being an adult, but many adults are deficient in adult-like things. And really, if nobody ever tells new adults stuff like this, how are they supposed to know?

Lawtonfogle7• 10 years ago

Meaning, don't sign legally binding contracts that you haven't read.

If we required this to be an adult that the world would be full of children. Granted, I personally want this. I would like to make 'I didn't read/understand the contract' valid reason to break a contract unless the other party could prove with clear and convincing evidence you read and understood the contract... but I realize this would bring our society to a halt and would require a significant rework to fix. We live in a society that abuses consent and to swap to one that doesn't will not be an easy task.

kafkaesq4• 10 years ago

I don't mean to sound overly dismissive, but isn't this just part of being an adult

You would think so -- but many companies apparently expect that none of their candidates will really read (let alone think about the consequences of) the employment terms they're expecting them to sign.

As if they'd basically prefer to hire children.

mbrundle2• 10 years ago

...isn't this just part of being an adult?

It is, but in practice I don't think it's as straightforward as that, because:

1. There can be a presumption that the contract will be fairly written. Some of my recruiting employers have behaved as though they have your best interests at heart, which could lull you into a false sense of security. [A]

2. As you mention, it can seem that the decision is strictly yes/no. Corporate EULAs fall into this category - you either agree to abide to the terms of huge piles of legalese, or you don't use the software. I admit that I just agree to all of these. Even if I did read them and find a clause that I wanted to negotiate, I don't know how I'd even begin to broach the subject with an Apple, Microsoft, Adobe etc. And a similar situation exists in employment contracts, where someone who is desperate to accept a job offer (e.g. at a big uni or company), and they may not know that the terms are negotiable.

3. People just may not be aware that there are really long term consequences, such as the non-compete clause in the OP. I certainly didn't know about these sorts of issues before I worked in the Bay Area.

4. Some of the more restrictive legal clauses may be quite innocuously or confusingly written, and therefore require a lawyer with relevant experience to spot. So even if a layperson is being diligent, they may still fall afoul of something dodgy.

========

[A] Quick aside. One startup CEO gave me such a contract, and when I verbally raised some issues, he just laughed them off and said they were typical boiler-plate legal language, and said that none of this would ever affect me. I was on friendly terms with the CEO and was therefore ready to accept those assurances, but my wife wouldn't have any of it, and she urged me to make some modifications.

I just looked up the email thread where my wife and I discussed one particular startup employment contract. It featured a section on intellectual property rights, where if you didn't complete an additional "Exhibit A", you were at risk of giving the company free licensing rights to anything you'd worked on in the past.

Wife: "It should be okay to sign, but not without completing Exhibit A."

Me: "I think it'll be fine, they're nice people, I'll just go ahead and sign it."

Wife: "Wrong answer."

I spent hours working on the Exhibit A, and took it to the CEO the next day. When he read it, he saw red and stormed off out of the office to talk to his legal counsel. The legal counsel came back and said yeah, my wife was right, and agreed to do the changes.

When I joined the company, it turned out I was the only technical person who had filled out that Exhibit. Would this have affected any of them? Who knows, but there was certainly a quantifiable risk involved. I'm certainly glad that I had my back covered by it when the shit hit the fan. The others were smart people who just didn't understand the legal consequences of not filling in that Exhibit.

arclyte• 10 years ago

but isn't this just part of being an adult?

If you believe that, I've got a bridge I'd like to sell you... Eh? Eh? See what I did there?

malz• 10 years ago

My wife and I were about to buy a car ... eventually we had to walk away from the deal

Just curious, were you able to buy a car elsewhere without signing an arbitration agreement?

dalke5• 10 years ago

Take a look at how nearly everyone clicks "agree" without reading the oh-so-many clickwrap agreements.

If what you say is true, then you must believe there are very few adults in the world.

jimbokun3• 10 years ago

"I don't mean to sound overly dismissive, but isn't this just part of being an adult?"

Reading and understanding what you read doesn't make any difference.

In the U.S., employers have a lot of power. Workers have none. When every company has a non-compete (or whatever other egregious terms), eventually you have to sign somewhere so you can feed yourself.

hexagonc3• 10 years ago

The non-compete agreement and employment contract at my last job was provided and signed electronically over the web. There was no opportunity to red-line any of it, although I could have printed and shown it to a lawyer. I suspect many people will be subject to these non-modifiable, digitally-signed contracts in the future.

idsout• 10 years ago

Where I worked years ago, I told my employer flat out that I wouldn't sign the non-compete that he handed me. He asked me again two weeks later to sign it. I refused, explaining how it would essentially give me no bargaining power and could keep me from getting future work. That was the last I heard about it.

I continued working with some awesome people (my employer included) for another two years.

vonnik• 10 years ago

Fwiw, non-competes are unenforceable in California.

dragonwriter5• 10 years ago

Non-competes are mostly unenforceable in California. But you definitely shouldn't just sign one and assume it won't be enforceable in your case.

fryguy• 10 years ago

Assuming one did such a thing, would it be possible to take them to court and get a summary judgement that the clause of the contract is unenforceable and to be removed, so they can't use that as pressure against your new company as in the instance in the article?

jimbokun3• 10 years ago

“We are confident that our employment practices comply with all applicable laws, and we remain committed to maintaining the highest standards in our ethical, journalistic and employment practices.”

Oh, please. The overly broad non-compete demonstrates a complete lack of ethical standards in your employment process. You're really just trying to say you are just as scummy, but no more scummy, than the prevailing standard for employment practices in the U.S. Which is a standard largely devoid of any ethical considerations whatsoever.

stygiansonic3• 10 years ago

Agreed - these kind of boilerplate statements are so common that they virtually carry no weight anymore. It's almost just a standard "checkbox platitude" that any large size company will be expected to mention as a default response. (These statements are probably just there to provide some level of deniability when an employee does something bad, to say that it's not part of the company culture - which may or may not be true)

As an example, Enron: "We are dedicated to conducting business according to all applicable local and international laws and regulations, including, but not limited to, the US Foreign Corrupt Practices Act, and with the highest professional and ethical standards" [0]

0. http://www.agsm.edu.au/bobm/teaching/BE/Cases_pdf/enron-code...

bigtones• 10 years ago

"We are dedicated to conducting business according to all applicable local and international laws and regulations, including, but not limited to, the US Foreign Corrupt Practices Act, and with the highest professional and ethical standards." - Enron Code of Ethics

http://www.agsm.edu.au/bobm/teaching/BE/Cases_pdf/enron-code...

mikeash6• 10 years ago

When somebody states so strongly that they are following the law, you should be really suspicious that something is up. Like how if a hotel strongly advertises "our rooms are really, really clean," run away.

philjr• 10 years ago

I am curious, given the length of time she was employed at her new employer and her statement saying her editors were aware of this, whether this was just the HR compliant reason she was let go.

srussellkraft5• 10 years ago

The editors in the legal news department knew; that doesn't mean the corporate side knew or cared until Law360 sent its letter. I was let go because of the non-disclosure of the non-compete - I can assure you there was no other reason. In fact, HR didn't even need a reason to fire me, but they still gave me one.

timv2• 10 years ago

There's some confusing language in the article that might make you think that she worked at Reuters (the new employer) for a long time. In fact she was only there for a few weeks:

... who Thomson Reuters fired within weeks after hiring her in September

The bit that confuses it is this:

I also later found out that every editor in my section at Reuters had been well aware of the non-compete for years

What I think she's saying is that the editors at her new employer were well aware (and had been "for years") that Law360 (her old employer) used these non-competes, and (by implication) that she'd be subject to one.

It gives the impression that she worked there for years, but that seems to just be an unintended consequence of the phrasing.

derekp72• 10 years ago

Something I don't understand -- a non compete is between an individual and their (previous) employer. The new company hiring the employee has NO contractual or legal obligations to the former employer -- so why the tendency towards firing? And if the former employer contacted the new one, making legal threats in order to get a person fired, isn't that itself illegal? (Wrongful interference with Employment Relationship).

bravo22• 10 years ago

I am not a lawyer but I believe this is because there is a tort for inducing someone to break their contract with a third party. Therefore as the new employer they'd be on the hook.

stygiansonic3• 10 years ago

Even when the new employer has not been sued, there are cases where they have paid the previous employer to settle the non-compete, as was the case with a CEO Nortel hired from Motorola:

"The two companies were involved in a brief legal dispute last year after Nortel announced it had chosen Motorola's former chief operating officer, Mike Zafirovski, as its next CEO. Citing non-compete agreements, Motorola sued Zafirovski in October. The dispute was settled a few days later when Nortel agreed to pay $11.5 million to end the matter.

Under the terms of that October settlement, Zafirovski and Nortel agreed not to recruit Motorola employees."

(Not trying to say this case is anything like that of a much lower-level journalist as described in the article. That seems unfair and harsh)

http://www.infoworld.com/article/2674269/networking/nortel-a...

dragonwriter5• 10 years ago

Something I don't understand -- a non compete is between an individual and their (previous) employer. The new company hiring the employee has NO contractual or legal obligations to the former employer

Well, this part is wrong. Once they become aware of the contract, they risk the potential of liability for tortious interference. [0]

And if the former employer contacted the new one, making legal threats in order to get a person fired, isn't that itself illegal?

So long as there was no misrepresentation involved, I don't see how it would be illegal. What law do you think would be broken?

[0] https://www.law.cornell.edu/wex/intentional_interference_wit...

kbenson• 10 years ago

I suspect there's a problem with them getting "information" from an employee "illegally". That's very vague, but that may not be a helpful thing if a competitor is trying to root through your data to confirm or deny whether you've profited from trade secrets of theirs...

rogeryu• 10 years ago

I guess in this particular case, journalism, the reporter cannot work on any article or subject anymore. Almost all old cases and even related cases are probably covered by the old employer's magazines etc.

If you're a programmer, it means that you cannot work for a certain client, or even in a certain branch, but this case is so much broader.

leroy_masochist• 10 years ago

One important thing to note is that often, when you leave a company, they will offer you a severance package in return for signing an agreement. This may happen if you are fired, or also if you leave on your own accord.

IANAL, but I've dealt with this situation and my key takeaways are as follows:

1. Pay a lawyer to read the document for you and provide advice.

2. There are major differences in state law, and jurisdiction is important. For example, if you worked for Google in NY[0], and your contract was a NY-based contract, and there was a harsh noncompete in it[1], and you subsequently took a job in California that violated the terms of the non-compete, it doesn't matter that your new job is in California and Google's HQ is in California and Alphabet is domiciled in Delaware. You signed, and are potentially in violation of, a contract whose potential violation would be adjudicated in New York.

3. Upon receiving advice from your lawyer, and bearing in mind the importance of state jurisdiction, ask your former employer to make changes to the agreement as you see fit, especially if there is an aggressively worded non-compete.

4. Don't believe them when they say "this is just a formality". Read the fine print and understand what it means.

[0]: Has already been mentioned a couple times in this thread, but California is a much more employee-friendly state than NY. Non-competes are essentially unenforceable, as are non-poach agreements. It's my understanding that disparagement clauses are also a lot harder to enforce in CA, but IANAL.

[1]: To be clear, I am not sure whether this would be the case at Google specifically, just using a well-known California-based company as an example.

arethuza2• 10 years ago

Worth noting that in the UK it is pretty standard for your employer to pay for your lawyer (not their lawyer) to review your "compromise agreement" - there is a standard fee of £500 or so for this which a decent employment lawyer will be able to get a decent amount of work done even if their hourly rate is much higher.

I left my previous employer a couple of years ago and it ended up with a fair bit of negotiation and it was all covered under the standard fee. The particularly nice thing is that they bill your employer, not you!

arrosenberg• 10 years ago

Interesting. In the US, I would almost never use a lawyer paid for by someone else. I'd always assume the lawyer's client is whoever is paying them.

walshemj2• 10 years ago

Strictly in the UK a compromise agreement is to stop the employee suing the employer.

I know that some uk employers offer them to all outgoing employees - makes me think they have something to hide.

MatthewWilkes• 10 years ago

The "just a formality" line really bugs me. I once contracted for a place that asked me to indemnify them against all fines or taxes due against them in relation to my contract with them. So, I asked them to amend it to include language that excluded cases where they are informed that they are breaking the law, where they agree to a settlement with a third party, where they refuse to defend an action, where they fail to notify me immediately after an accusation is made, etc. They refused, saying it's just a formality.

I can understand why their lawyers were keen on having people sign it, as they were so clearly abusing their relationships with contractors, but I don't understand why so many of my colleagues did.

mikeash6• 10 years ago

"If you don't intend to enforce it then you don't need me to sign it."

Sometimes this works and sometimes they'll insist anyway. In the latter case, you can run away knowing you dodged a bullet.

ryandrake3• 10 years ago

I remember a place that asked me to sign a "exit agreement" with all sorts of ridiculous things on it, but did not offer a severance or any other kind of incentive for me to sign it. Had a good chuckle at that one. They insisted I couldn't leave until I signed it, and looked kind of confused when I said how about I just not come in the next day, or the day after, etc. They asked that they get some time to figure out how they were going to deal with that scenario...

exelius4• 10 years ago

This is the general problem when you have two parties with an asymmetry of power enter into an agreement with each other.

The more powerful entity will spend time iterating over the process and identify every possible way they can be threatened. They will write contractual language that errs on the side of protecting the company.

The less powerful entity will not argue any of this language for fear of no longer being allowed to engage the more powerful one. They don't know what to look out for anyway because they are inexperienced at entering in to these kinds of contracts.

This is a problem for more than just employment contracts. We expect individuals to have to negotiate against highly-paid professional negotiators for even the most essential activities in our lives.

crispyambulance2• 10 years ago

The good news is that most employers don't actually try to enforce non-competes unless the violation is egregious (like poaching clients).

This particular case might be a cynical and calculated action to, as the article says, "send a message" to other young employees looking to move on. It could be the aggressor here has been suffering from a brain drain and this is how they've decided to deal with it.

mikeash6• 10 years ago

I don't know that this is good news. Limited enforcement is why they can get away with such clauses in the first place. A remarkable number of people will be placated by this when they really shouldn't.

exelius4• 10 years ago

Yeah, I realize that many non-competes don't get enforced, but the fact is that those companies will continue to demand them because the non-compete protects them in a small percentage of cases (regardless of its impact on their employees). The companies have zero downside from the NC but it can significantly affect workers who may feel they have no choice but to sign it if they want a job. Hell, many of the non-competes are likely unenforceable, but so few people ever push back on them their legality is never tested.

Lawtonfogle7• 10 years ago

Selective enforcement is never good news. Not in law. Not in contracts.

dredmorbius2• 10 years ago

And what makes a client an exclusive property of one vendor or another? Or reason to take out revenge on arbitrary fresh-out-of-school recruits?

This practice needs to die. Immediately.

Natsu• 10 years ago

My solution for this nonsense would be to make things such that a noncompete is only enforceable as long as the employee is being paid their highest wage in the previous two years during the entire time of the non-compete and they were limited to a maximum of 2 years (both limits are required to avoid certain gamesmanship). If you make this salary only (not stock), it has the bonus of screwing over bogus $1 CEO tax-dodge salaries too.

If it's actually that important that they be kept off the market, they should have to pay the salary during that time. If it's not important enough to pay them for, then it shouldn't be had.

dalke5• 10 years ago

That's a "garden leave" clause. https://en.wikipedia.org/wiki/Garden_leave

cdnsteve• 10 years ago

Never ever sign a non-compete, ever.

billmalarky• 10 years ago

From a position of power, of course. But the article is about jr employees who don't have much of a negotiating position.

jchendy2• 10 years ago

For certain industries, that statement is equivalent to "never get a job."

st3v3r5• 10 years ago

Which is why the law needs to change to ban them completely. This isn't something the free market is going to fix.

hodgesrm3• 10 years ago

Blanket non-competes undermine the creative destruction process in modern economies. They will end up hurting the companies using them by making it harder for successful firms to expand quickly and keeping less successful firms afloat longer. The problem is individual companies lose little in the short run by putting them on their own employees.

The answer is to make non-competes unenforceable across the US in the way they are in California, which makes them generally unforceable but adds reasonable exceptions for situations like selling a company to an acquirer.

LordKano2• 10 years ago

I have been asked to sign non-compete agreements by a couple of employers.

One of them was just a legally worded agreement to not poach customers or go to work for a customer within 18 months of ending employment. That made sense to me and I agreed to it.

I wouldn't sign a non-compete that forbade me from going to work for a competitor.

hodgesrm3• 10 years ago

Same here. Unfortunately most people either don't take the time to think through the consequences or do not have a choice about work that allows them to push back.

I have similar feelings about binding arbitration, another area where corporate lawyers have gone crazy in recent years.

st3v3r5• 10 years ago

Non-competes are immoral, and anyone who uses them deserves to be ruined so bad they have to live under a bridge. I hope her employer gets sued into oblivion.

at-fates-hands• 10 years ago

As someone who worked at West Publishing and then Thompson West and its current iteration Thompson Reuters, I have some insight into why this happened.

Many of Reuters businesses are starting to face more serious competition. There was a time when Reuters owned the media business. Now smaller, more nimble companies are coming in and giving them a LOT of competition.

Legal reporting is one of these areas, and Law360 has been eating into their market share in several regions. As such, Thompson goes out of its way to try and hire their help. It gives them more of an insight into what the company is doing. For years, Thompson West used to hire Lexis sales people just to find out what they were doing. Reuters still does the same thing. None of the information is confidential, but it gives Reuters a lot of information into how they train their people, the areas of law they focus on, how many reporters are on a certain beat, etc. Any kind of information they can get, they do. Of course this isn't done in a formal way, it's more off the cuff stuff you hear around the lunch table, or during an training session.

Law360 probably realized this and called in their ace card - the NDA. Tie it up in court, or just hamper the reporter in trying to get a new gig and their problem is solved. This is why Law360 sent out the letter about having "critical and sensitive confidential and proprietary information".

Simply out, this is a resource war, Reuters is getting beat and uses employees from other companies to gain a competitive advantage. She just got caught in the middle is all.

NotHereNotThere• 10 years ago

Anybody find it weird that Law360 had the journalist sign the Non-Compete on her first day along with other HR forms?

Every time I've had job offers that included a Non-Compete, the contract was always to be signed at the same time as the offer.

brightball• 10 years ago

Perks of a right-to-work state: broad non-competes are unenforceable for exactly this reason. You have to have specific and reasonably defined scope in order for it to be viable.

zekevermillion2• 10 years ago

I find that even corporate lawyers are frequently ignorant of the laws applicable to post-employment restrictions. In NY these covenants are enforceable only to the extent that they protect the "legitimate business interests" of the employer, under BDO Seidman v Hirshberg. Those interests do not include preventing employees from practicing their trade, though some sleazier employers seem to think that is part of the game. In this case, it sounds like the employer is threatening some sort of trade secrets misappropriation claim, which would not be surprising as this usually accompanies any noncompete claim. However, it's hard to imagine what protectable trade secrets a "content" author would learn. I mean, how to write content is not a trade secret, it's a skill of the trade.

phonon2• 10 years ago

You can read about that here...at Law360!

http://www.law360.com/articles/558083/bdo-seidman-continues-...

zekevermillion2• 10 years ago

Typical of products and services marketed toward lawyers, law360 requires a silly subscription to read content that is largely already public info. Maybe the trade secrets that the Reuters journalist stole have something to do with the secret of convincing people to cross the paywall of this obnoxious publication! Anyway, here's a Google Scholar link to the opinion, which is self-explanatory:

https://goo.gl/Vzq0XG

djrogers• 10 years ago

I see a lot of advice here to never sign a non-compete form. Sounds reasonable, but I have another possibly simpler suggestion.

I've been asked to sign 3 non-compete agreements in the course of my career, in spite of working the entirety of it in California, where they're useless. When I got the first one, I consulted a lawyer who told me as much and suggested I sign it with all of the non-compete language redlined out.

I've done that with all 3 of them, and have never once gotten so much as a comment about it from my employers. The hiring manager is happy to get al his paperwork, HR is apparently happy to have a bunch of stuff to file away, and I'm pretty sure legal either knew I was in the right or they never even looked at it.

ryandrake3• 10 years ago

You got lucky. Lots of places will insist that you either sign their documents unmodified or GTFO.

coldcode• 10 years ago

I worked at a place once that had a not only non-compete, but barred me from buying anything from a supplier the company used (including Walmart). I objected and crossed it out before signing. Never came up again. A lot of these agreements are legally useless but often put in just in case it might be useful later.

chrisbennet3• 10 years ago

Very sad. I recently gave my 3 page (really 2.5 pages) client services contract to a client and they came back with their own 9 page "standard contract" for contractors. (I'm a developer.)

I couldn't believe how overreaching their contract was. The most egregious paragraph stated that if I introduced a bug I would be liable for not just what they paid me - I would be liable for their estimated loss of profits !!!

I quoted that part of the contract and wrote back:

"Nice try but yeah, no."

I had my lawyer go over it and take out all the stupid stuff and we came to an agreement.

Lesson: Read the contract. If you find that the contract is unduly unfair, ask if you can cross out the parts you don't like. If they say yes, turn it over to your lawyer.

Lesson: There is no "standard contract".

Lesson: If they say "It's a formality that we'll never enforce." Cross it out. ("Then you won't mind if I cross it out.")

Lesson for contracts [my lawyer taught me this]: If you put something egregiously one sided in your contracts you will break trust with the other party. In my case it triggered a "Whoa, where else are they trying to screw me?" response which triggers the "this is job for my lawyer" response.

If the contract is for your enemies, do whatever you want. If it is designed for parties that you want to work with, it's sending the message that you can't be trusted is not a good way to start the relationship.

mcv• 10 years ago

I have renegotiated terms of almost all my freelance contracts. Usually, a non-compete was the main culprit. Generally, the non-competes don't come from the client, but from a mediator that wants to prevent me from bypassing them and working directly for the client, which is fair. But sometimes they're still ridiculously broad. For example: I'd already worked for a major bank, quit that project because of a new baby, and when I looked for a new project, found one at the same bank through a different recruitment agency. They wanted a non-compete on all my work for that bank. That was obviously not fair, so I got it reduced to only the department where I would be working. I'd be free to work for any other department.

kyrra• 10 years ago

Similar story:

My dad was part owner of the business which he got out of 10 years ago. The company went bust a couple years ago and the debt collectors started trying to get what they could.

One of those was a laundry service that would wash uniforms of the employees. My dad had signed the contract for it 25+ years ago to start the account going. On the contract it stated my dad was personally liable for owed fees. But when he originally signed it, he crossed out those 2 words (personally liable) and turned it over signed.

He pointed this out to the debt collectors when they came knocking and they stopped bothering him.

mmanfrin• 10 years ago

Do you (or anyone else) have advice for people who are employees? What do I do if Large Company X wants to hire me and they hand me their standard contract -- with me being a mid-level engineer of no note (and thus no real leverage).

ncallaway• 10 years ago

If I were in that position I'd markup the contract sections that I was concerned with and send it to my HR contact. Some will be happy to accept changes, some will negotiate the terms, and some will say "standard contract or no contract". I can't imagine any HR person ending the relationship just because you ask.

At that point, it's really up to you to weigh the specifics of the offer and the drawbacks of any contract terms they won't budge on.

Hiring is fairly expensive, and if you've gotten to the point where you've got an offer along with a contract you're fairly far into the process. You don't have a ton of leverage, but you definitely have more than 0 leverage.

x0x0• 10 years ago

The first thing -- and this is critical -- is understand that you could be held to each and every clause of the agreement you sign. So don't sign anything that you don't want to do, unless you're down to I need a job or I can't eat levels of desperation.

Your leverage is you can decline the offer.

I had, btw, a former google manager who got funded by a16z slip a clause into an offer agreement that said if I conducted any business on my personal media device (ie phone), they had the unlimited right to search it on demand. Obviously there was no way I'd agree to that, so putting work gmail on my phone was right out. But what if texting me on the weekend meant conducting business? They'd also left in language backdating the employment agreement (presumably because it was an update for existing employees), so as written it would have extended to before our phone screen... which I took on my cell phone. I don't work for them because the ceo said his lawyer insisted on it, I responded that the lawyer works for the ceo (not the other way around), he said blah blah blah, I told him he was a liar. The clause was on him and if he wouldn't forgo it he should at least have had the integrity to stand up and say I want this. And that was that.

I've also lost a job in nyc at the written offer stage because new company's counsel determined it would have violated my noncompete with old employer. These aren't empty words you're signing. CA mostly bans them and it's really important to employees, because right or wrong, you really don't want to get caught in the middle of a pissing match with people who have company-funded lawyers.

ghaff5• 10 years ago

You can try to make whatever changes to the contract are important to you but ultimately you have to evaluate your desire for the job vs. how restrictive the non-compete is likely to be on the day you want to move on.

In spite of the various folks on here saying you "should never sign a non-compete" that's bench advice that isn't necessarily especially helpful. In my case, quite a few years ago my company was acquired by another (MA company that is very pro non-competes; you can probably guess who if you follow the space). We were given non-competes to sign (that, in my case at the time wasn't really very restrictive).

We had a choice of signing in the sense of we could sign or we could walk out the door. Perhaps I could have walked out the door for abstract principle but, frankly, that wouldn't have been very sensible.

ryandrake3• 10 years ago

Good luck. I've tried crossing out undesirable terms in the past at several Large Company Xs. The response is always "WTF is this? Sign the contract unmodified, or there's the door!" Of course, I was not looking forward to another 6 month job search, so I signed it.

the_watcher• 10 years ago

"Lesson: Read the contract."

I did a year of law school, then left because I was miserable and it was too much money to be miserable for. I did, however, take contracts, and I cannot stress this enough. Read the contract. Read it again. Anything that looks off, ask about. It might be innocent, standard, or something you don't need to worry about, but it might be important. As you mention, it's also a great signal about the intentions of the other party. Finally, anytime someone tells you something is "standard" in a contract, it's bullshit. "Standard" lease agreements (the ones you can get by Googling) regularly contain unenforceable language. The only standard elements a contract needs are: an offer, an acceptance, mutual assent to be legally bound by the terms, and consideration (the promise of an exchange of value for something else of value). Anything else in the contract doesn't have to be there.

mattkrause• 10 years ago

This depends on where you are. Quebec, for example, has a single standard residential apartment lease. It's written by the Régie du logement so everything in it is, by definition, enforceable.

bobby_9x• 10 years ago

I once had a contract like this, but it was for office space.

In the contract, it stated that if I didn't show up for more than a week (I had to let them know in advance), my landlord would own everything inside.

When I questioned it, they told me it was 'boiler plate' and told me to find another place to rent.

I found another place within two days that had a better location, free Internet access, and a fantastic contract.

erroneousfunk• 10 years ago

It's a state law, but I would be shocked if there were any state where that term was legally enforceable. I live in Massachusetts, and I would LOVE it if, after a 9 day vacation, my landlord started selling my belongings. The lawsuit would, not only be lucrative, but fantastically entertaining.

kafkaesq4• 10 years ago

Meanwhile, the HR flackey at Law360 who incompetent advise her still has their job:

When I signed the agreement, the HR representative who conducted my orientation called it a formality and told me it just meant I couldn’t freelance for a competing site while still working there.

csense• 10 years ago

who incompetent advise her

That was very competent advice from the point of the company -- the HR person convinced her to sign the provision the company wanted her to sign, the company didn't have to face a choice between agreeing to strike the non-compete or letting her walk, and there was no record of the misleading "sales pitch" the HR representative used (which might have served as evidence of conflicting intentions, allowing a court to strike the non-compete provision on the grounds that the parties didn't intend it to be binding, or even caused future liability for the company if the HR rep's description of the non-compete crossed the line between legal sales techniques "oh that's not important, you don't want to think too hard about this part of the thing, everybody signs it" and illegal fraudulent misrepresentation "it says X" when it clearly it actually says Y which is totally different).

It sounds like the HR person did their job competently.

sparky_z• 10 years ago

"I also later found out that every editor in my section at Reuters had been well aware of the non-compete for years."

I thought she'd only been there for a month. What am I missing here?

srussellkraft5• 10 years ago

I later found out that other reporters had run into trouble when moving from Law360 to Reuters, but those were before my time. Law360 has had a non-compete since around 2011.

paulclinger• 10 years ago

I read it as they knew the situation with Law360 non-competes in general, which would apply to her as well.

chippy• 10 years ago

When I was a freelancer working on my own, a few companies would include a non compete clause. I challenged them on this always and they were all very happy to alter the wording. It's about the wording mostly, and about definition of competition. For example if I am working for a web agency shop that does e-commerce websites for sports and I am just working on a site for a surf shop, I would alter the clause to read "in the realm of surf shops" rather than competition in general. They were happy to change it because it kept the spirit of the agreement, what they actually meant there. Yeah, I was fine not making directly competing in a specific domain, but I wasn't going to be limited by contract in competing in a general sense. It was also clear that reducing from 12 months to 6 months is usually acceptable also.

Now. The worst clause in a permanent contract is the other works / open source projects etc. They sometimes want to own all your code even the things you do in your spare time. They will ask for a list of all projects you contribute to before working, and if you want to contribute to something new in your spare time you will need approval from management. Now, I think this is very unreasonable, and I've pushed back on this so much that I've rejected job offers because of it. What I do in my own time is my business.

CyberDildonics3• 10 years ago

I was faced with a non compete clause that would have barred me from working in the same industry for 2 years. I said I wasn't ok with. They said 'it isn't usually enforced'. I said 'then it shouldn't be in there'. I was told 'they don't usually allow any changes' (and this was a big company).

The result was that they did change it and send me a new contract.

Companies make a huge play for legal rights with contracts. Usually you have wasted a lot of time to get to that point since they haven't sent you a template in the first place. Suddenly there is an unreasonable amount that you are giving up for the privilege of working for someone. Selective enforcement is bullshit. Anything in the contract can be used as leverage against you if the company doesn't like the position they are in at any particular moment.

gizi• 10 years ago

The internet has completely changed contracting for me. The contract is the email thread up to the point at which we have an agreement. If the counter-party suggests that we sign another document than that, he is a liar and a cheater, and I will not do business with him.

In those circumstances, non-compete clauses will have been discussed during the mail thread. If we discussed and we agreed to them, they are valid. Otherwise, they are not.

I do not understand that anybody would still agree to sign a contract document drafted solely by someone else. If it was not drafted together, it is bound to be abusive, and it is always the party who did not participate in its drafting who will be abused.

I have always imposed my will or else walked out of bad deals, regardless of whether the counter-party is an individual or a large company. What difference does it make?

chrismcb2• 10 years ago

Outside of selling your company why do we have these and why are they enforceable? Well I know why we have them, but why are they allowed to exist? What is even worse are companies forcing noon compete on essentially unskilled workers

How a Legal Journalist Got Fired for a Non-Compete

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