Ask HN: Company got acquired, new contract seems oppressive

https://news.ycombinator.com/item?id=9729916

165 283 11 years ago

news.ycombinator.com

The company I work for (software engineer, advertising industry) was recently acquired by a larger company.

The new employment contract stipulates the usual oppressive confidential information and IP assignment things, detailing how the company owns anything I come up with. The state I'm in specifically protects my rights to things I create entirely independently (outside company time and equipment) but the contract also has a clause that says I must disclose any existing inventions or ideas to the company now and that anything not enumerated belongs to them and that by not listing I am acknowledging that the invention idea was not developed or conceived before the commencement of employment.

Assuming I were to sign and return without enumerating any specifics they would own the IP to anything I've done previous to this?

I'd love any advice anyone here has, but perhaps a better question would be-- Are there any "uber for lawyers" services online where I can pay to have someone with bonafides read through this for me?

functional_test• 11 years ago

Find an employment attorney. Pay that person for an hour or two to read the contract for you. They will be able to offer much better advice than HN.

carterschonwald• 11 years ago

yes. talk with a lawyer.

dopamean2• 11 years ago

This is the correct answer.

I worked at a company that was acquired earlier this year and I didn't care for the new employment contract. Unfortunately, the sale was contingent on a certain percentage of the team signing the new employment contract. I had a lawyer look at the whole thing and he told me that because of the way the deal was worded I could sign and quit without affecting things.

I looked at the contracts a ton myself and basically made no sense of it. The lawyer spent a couple hours and it was a big help.

nicwest• 11 years ago

did you quit in the end?

ExhibitAClause2• 11 years ago

Whats the best way to go about finding one on short notice in a generic major city?

johncs• 11 years ago

If you're in California I can give you a recommendation (I have no affiliation with him aside from hiring him in the past). I don't know of a general way of finding a lawyer on short notice.

tarikjn• 11 years ago

I've had success selecting lawyers with Avvo in the past. They have a new service called AvvoAdvisor that will connect you with a lawyer immediately (I haven't tried it, but I've tried Lawdingo which was OK). I think this can help you perhaps get a bird eye view on your matter and pre-select someone for more thorough work.

chrsstrm• 11 years ago

I won't name the "Uber for Lawyers" service we recently used for a minor task, but it was just as bad as you might think it would be. I would not recommend anything like that to anyone, especially for trivial services.

When hiring another firm I did a lot of prelim research on Avvo.com - they give you a good amount of detail and user reviews without having to create an account. It's easy to find the attorneys who are listed on there without having to use Avvo's system.

I still think the best way to find an attorney in a specific field is to ask other attorneys in any other field.

jsudhams• 11 years ago

Indian Lawyers but can verify generic legal language and quick to respond typically with in an hour for about US$20.

https://www.kaanoon.com/

colechristensen• 11 years ago

Pretending it was myself I googled Employment Lawyer Minneapolis

Which pointed me to http://lawyers.findlaw.com/lawyer/firm/employment-law-employ...

FindLaw is a Thompson Reuters business, so I trust it enough, and it came up with 43 results which it seems should be enough to find something adequate.

_delirium• 11 years ago

If you're a member of a professional association or union, they might be able to provide you employment-contract advice. In Denmark in the engineering field for example, most workers are members of the engineers' union 'Ingeniørforeningen', which will provide you employment-related legal advice [1].

[1] http://english.ida.dk/why-join/core-benefits/counselling

gkop3• 11 years ago

Ask friends or acquaintances that you trust.

joshAg• 11 years ago

Asking for a recommendation from friends/family is best, even if their lawyer doesn't specialize in employment law. In the case where the lawyer doesn't do employment law, say you were recommended by a friend/family and ask them if they can refer you to a lawyer with the right expertise.

Failing that, contact your state bar association. For example, the CA bar association offers a list of certified lawyer referral services that will help you find a lawyer with the right expertise: http://www.calbar.ca.gov/Public/LawyerReferralServicesLRS.as...

smutticus• 11 years ago

You might just try contacting the biggest union near you and asking. They typically know plenty of labor lawyers. It can't hurt.

herge• 11 years ago

Reddit's /r/legaladvise regularly advises asking the local bar association for a good recommendation.

Flemlord• 11 years ago

If you can't get a referral, use Chambers:

http://m.chambersandpartners.com/guide/usa/5

moron4hire3• 11 years ago

Had a friend mention he was going to do this on a job interview and the company he was talking to almost immediately cut him a settlement check to keep him from doing it and to just make him go away.

Don't ever assume something a company is doing is on the up-and-up.

xienze• 11 years ago

Can you elaborate? He was interviewed as in, came in off the street, so to speak, to interview, made mention of having a lawyer review contract language and was cut a check?

Or was this an interview with the acquiring company?

gaadd332• 11 years ago

Why would they do that in a job interview? Why not just not extend an offer? That seems very strange.

You should mention what company it was, I would love to go to a few interviews and then walk away with a settlement check for no reason.

jt2190• 11 years ago

There's some very good discussion about IP rights in this thread: https://news.ycombinator.com/item?id=2208056

leriksen• 11 years ago

maybe just print out "ls -alR /" and say "these are all my pre-existing inventions and and ideas, and supporting software"

geophile• 11 years ago

Talk to a lawyer.

FWIW: While this clause may be oppressive, it is not uncommon. It has been in (almost?) every employee agreement I've signed. I always filled in the addendum to exclude ideas I had previous to the job, that I wanted to pursue on my own.

egocodedinsol• 11 years ago

Assuming you do get a 'reasonably priced' lawyer in this situation, how confident can you be in the answer? Put another way, if @ExhibitAClause2 were to end up in court how much would the outcome depend on the quality of lawyer arsenal at his disposal versus BigCo?

I ask because there are countless scenarios when an attorney clears something and an expensive lawsuit still occurs, e.g. patent trolls.

fredkbloggs• 11 years ago

Successfully suing a large corporation is effectively impossible in the United States, regardless of merit. Your only hope is that the case is so egregious that you get a modest settlement offer just to go away, along with the one-in-a-million chance that some superstar lawyer takes your case pro bono. Practically speaking, you will never make it into a courtroom because you will be broke years before the case reaches that point. So the reason to work with counsel before signing the contract is to understand what can be done to avoid the need for litigation later, and the likely consequences of each possible approach. Options may range from filling out the paperwork in a certain way to renegotiating terms to walking away from the acquirer's offer.

If you want non-legal advice, walk away. If you wanted to be working for BigCo, you could have joined up years ago. You didn't. Go find the next thing that's right for you instead.

fatman• 11 years ago

You don't need a lawyer pro-bono, just one on contingency. If you can survive the motion to dismiss at the outset, you've now entered discovery, and BigCo will now start incurring bigtime legal costs. Settlement offers will be forthcoming. Litigation isn't about winning in the courtroom, it's about inflicting pain until someone says "uncle". (Patent litigation often goes further because the stakes are so high. Your five-figure breach of contract suit, not so much.)

heyadayo• 11 years ago

https://www.lawgives.com

chvid4• 11 years ago

Talk to a labor union.

chvid4• 11 years ago

:-)

Why the down votes?

This is a serious suggestion; I don't know the exact situation in America but in Europe all trade unions have trained advisers looking at stuff like this every day.

Going to an union is a much more effective and cheaper solution than every employee talking to an employment lawyer on their own.

protomyth• 11 years ago

Didn't down vote [edit: upvoted], but it doesn't quite work that way in the US for any of the unions that would cover developers, good info for Europe though.

mwfunk• 11 years ago

I know that labor unions are much more widespread in Europe than they are in the US these days, but that's all I really know about the European situation. Still, are things THAT much different in Europe? Honest question. I just can't imagine that they'd give free legal advice to nonmembers, or that there would be a lot of expertise in this specific area of employment law. Or is that not true? Maybe I've been biased by the labor climate in the US, but that's just not how I thought things worked in (most of) Europe.

URSpider94• 11 years ago

In the USA, unions are mostly associated with "blue collar" labor -- typically employees paid by the hour. I'm not aware of any unions that represent programmers, who are typically salaried.

patio11• 11 years ago

Are there any "uber for lawyers" services online

c.f. Lawdingo (YC 13), which is Uber for lawyers. No relation; never pulled the trigger on actually using it.

Incidentally, my last employment contract had a similar clause in it. After consulting with my bosses, who thought it was the usual boilerplate and didn't really expect a young engineer to have meaningful IP, we came up with a list which looked like:

1) Bingo Card Creator [the only IP I was really worried about] 2) Various contributions to the OSS projects listed in Appendix A [these days I'd literally just print a listing of all repos in Github] 3) Miscellaneous computer programs, inventions, and documents which exist on physical or electronic media as of $DATE and are impractical to list -- $COMPANY acknowledges this disclosure is adequately specific for its purposes

lostdog2• 11 years ago

I tried #3. Company lawyers requested that I change it as it was holding up an acquisition.

borski3• 11 years ago

This is standard practice in most default employment contracts, including literally every single one I've signed as an employee. It's in our employer contract too, and we've all signed it.

I usually include, as one of the disclosed items, something along the lines of "other open source or business ideas I may come up with or have come up with on personal time and while using personal, non-company, property."

One of our employees did this too, and I took no issue with it. My guess is if you have an employer suing you for infringement based on work you did there, you have burned a bridge and have much bigger problems than just this lawsuit.

Edit: IANAL, this is not legal advice, etc.

Silhouette13• 11 years ago

This is standard practice in most default employment contracts

Where I come from, it is also fairly standard practice for anyone who is any good at all to seek to amend such loaded terms before signing the contract. Just because it's in the default contract that the company lawyers wrote, that doesn't mean you have to actually accept it unchallenged.

borski3• 11 years ago

Yes, that's also true. It doesn't mean the company will accept the redlines or spend their counsel's time dealing with it, but completely appropriate to try and challenge it.

bgia2• 11 years ago

Where do you come from?

crdoconnor4• 11 years ago

Yeah, I've done this about 4 times now just with this one specific clause.

Companies keep giving me these contracts. I keep saying no. So far, no company has ever made their job offer contingent upon signing away every idea I come up with in the shower. The day that happens I will walk, though.

One thing I have noticed, though, is that it is a pretty reliable red flag, because it means one of two things:

* They don't read their own contracts (one employer actually seemed surprised when I read the clause back to him). Sign of incompetence.

* They are actually unreasonable people. Strong likelihood they will try to fuck you over in lots of ways.

Silhouette13• 11 years ago

Standard disclaimer applies: You need a lawyer qualified in your jurisdiction to check your contract. Personally I always recommend this for any employment contract. The cost of one decent lawyer for an hour vs. the potential risk that an employer sneaked something irrevocable and completely disproportionate in? It's not even close.

That said, I once had exactly the described problem: post-acquisition, new company wants to adjust a lot of contractual wording on things like IP heavily in their favour, at a software business where many of the staff are also creative outside work in one way or another. Most of my colleagues didn't realise the implications of the proposed IP clauses and in particular the potential impact on their time outside office hours until these dangers were pointed out, but many strongly disliked the new terms once awareness was raised.

Without getting into details I possibly shouldn't, let's just say that what the acquiring company's lawyers or HR people would like to happen will probably be outweighed by a significant proportion of staff from the acquired company refusing to sign the oppressive deal and threatening to walk. If you can reach critical mass, management is likely to step in and do what they have to so they can protect the new investment and CTA. In the end, the wording of the relevant sections in our new contracts was identical to the corresponding sections in our old contracts.

Incidentally, probably one of the biggest mistakes of my professional career was sticking around for too long after I already knew what kind of business the new employer was from their initial behaviour. With hindsight, I should have given them a fair chance once they'd backed down -- a few months, perhaps -- but then having confirmed that the new corporate culture was similarly unwelcome in many other respects I should have started looking long before I actually did. YMMV.

pvg18• 11 years ago

This paperwork is standard. The company wants to protect itself against a scenario in which you, after being steeped in its business, come up with some way to do it better/more efficiently/cheaper but claim the idea came to you while you were at home in the shower and thus they have no rights to it. Your out is the form that lists the 'inventions' you might have that you want excluded from this clause. You can always add to it later, too, should you come up with something that is unrelated to your employer's business that you want to work on yourself as long as you and the employer can agree it doesn't interfere with your full-time duties as an employee. Usually, all of this is a formality - just keep the paperwork up to date when needed. I don't think your new employer is trying to screw you.

Silhouette13• 11 years ago

This paperwork is standard.

I strongly disagree. It's not unusual for a new employer to try to pull a fast one here, but IME the actual standard among reasonable employers and employees involves wording like "in the course of your employment" or the local equivalent. In short, what you do on company time, with company resources, or in connection with your work at the company is theirs, but anything else is yours by default. This sort of arrangement protects their interests just fine without granting them unnecessary and unreasonable control over their employees' lives outside work, at which point whether the employer is trying to screw the employee on this or not is academic because they have no contractual ability to do so.

pvg18• 11 years ago

Well, I guess I strongly disagree that it's 'not unusual' for employers to try to 'pull a fast one'. This sort of agreement is standard precisely because it gives both parties a way to protect themselves and delineate what belongs to whom. Bad things happen when you don't have such an agreement. Perhaps things are different in the UK, but I'll echo what 'borksi said downthread - just about every software job in the US will come with such an 'Assignment of Inventions' bit of paper.

ChuckMcM2• 11 years ago

I agree with this, mostly its about avoiding in interesting litigation hassle where you 'submarine' your invention into a company and then sue the company for stealing it.

That said, it is always a good idea to keep really good records of what you're doing on your time, and the things you have "baking" when you join a company. That will help you in two ways, one it makes this paperwork trivial to fill out [1] I know of one case where it started a discussion with some IP people at the hiring company who then offered a lump sum to purchase the disclosed IP.

It is pretty standard language these days. Given the hiring challenges you have the option of working with a lawyer to create an agreement that is more agreeable to you, however failing to come to terms on that agreement is a perfectly reasonable reason for someone not to hire you, even if they had previously said they would.

Last tip, if its something that keeps you up at night you're probably not going to be happy, long term, working for anyone but yourself.

[1] One tip, you don't have to have list details here just a reference identifier, so for example if you're working on "Studmuffin: The Game" just mention "all rights related to the game: Studmuffin: The Game" on your disclosure form, and later if the question comes up (like they try to say you some how worked on it on their time) you can refer back to your dated notes from before your employment and your records that you kept on time spent that wasn't company time or company equipment.

pvg18• 11 years ago

I had the pleasure of reading some comment of yours a few months back about your work on NIS+ at Sun. These are all perfectly sane ideas but surely when you were at Sun, you signed an AoI agreement _at least_ as restrictive as what the OP is talking about. Or was that not the case and/or did you involve lawyers?

learnstats28• 11 years ago

Disagree.

We haven't seen the paperwork, but a deliberate change in employment contract is not something that's done just for fun or on a standard basis.

It doesn't seem to benefit the original poster to sign the contract as it stands. Contracts are supposed to be an equitable agreement between two parties - there is no "standard". Standards which benefit only the employer can and should be questioned.

OP should speak to an employment lawyer about the contract as a whole and any clause they are concerned about.

pvg18• 11 years ago

I'm not sure what you disagree with. And I suppose I'd have to ask you and all the other 'speak to a lawyer' people. Have you ever signed an employment contract in the US? Have you ever hired a lawyer to review it? If so, what did they tell you about the AoI?

rplnt• 11 years ago

deliberate change in employment contract is not something that's done just for fun or on a standard basis

What about acquisition as in this case? That seems rather expected. It makes sense that procedures and policies change (including what contracts look like) to reflect what the "parent" company use, and there may be new set of IP brought to the company (which may cause new conflicts). And as the post above mentioned, it should benefit the employee as well by having a document listing what's truly his.

jacquesm9• 11 years ago

It's not a matter of whether or not the paperwork is standard, the problem is that an acquisition does not normally require existing employees to sign new contracts and 'harmonizing' the relationships the company has with its employees is something they would only do if they feel their own contracts give them a more solid position on something they care about.

So this is a non-negotiable reduction in the legal position of the employees at best.

pvg18• 11 years ago

an acquisition does not normally require existing employees to sign new contracts

I'm not sure why you think that is true.

So this is a non-negotiable reduction in the legal position of the employees at best.

This is an extraordinary statement that requires the requisite evidence. I don't think it matches US law or precedent, it simply seeks to formalize it, while giving the other party a full and fair negotiating position.

Every single case I can think of where employer and employee/buyer got into such a spat are the ones where such agreements were not in place. Can you think of a counterexample?

ghaff4• 11 years ago

an acquisition does not normally require existing employees to sign new contracts

My anecdata differs. I was with a company that was acquired and I had to sign a non-compete that did not have with my previous employer. (There may have been other things as well in the contract but I don't remember.) Said acquirer, BTW, has been one of the most vocal in preventing Massachusetts from putting non-compete restrictions in place

nemmonszz• 11 years ago

I'm very uninformed on these matters, but just out of curiosity, what about the cases where you come up with some way to do it better but your employer isn't interested? Is getting them to sign a waiver saying that you can develop something on your own time on your own equipment the only way to legally create something that falls into the same category as what your employer is doing? So if they refuse to do that, you're effectively barred from writing a certain category of software unless you quit the company and wait X years?

pvg18• 11 years ago

I think it's reasonable to say that you can't compete with your employer, without drawing their legal ire, while you work for them. The flip side of it, at least in California, that it's very difficult for an employer to keep you from working on whatever you want for whoever you want (as long as you're not actually infringing on their IP or running off with their trade secrets), once you are no longer employed by them. The examples of this are legion - HP didn't sue Wozniak after he left to invent personal computers. Same for everyone who leaves Google or Facebook or Apple to pursue some idea of their own. "Former employer sues budding entrepreneur" is a story you almost never hear.

mikeash7• 11 years ago

I really hate this idea that there is anything you can put your signature to which is "standard" or "a formality."

I can absolutely 100% guarantee you that if there ends up being a legal dispute here, anything and everything signed by the employee will be used against them to the extent possible. Nothing is going to be "a formality" in that case, which is the only case where it really matters.

"Standard" is just another way of saying, "we hope you don't try to negotiate anything, because that would be inconvenient."

Both are ways of trying to make an already lopsided transaction even more unfair.

My response to "standard" would be, it may be standard for you but it's not standard for me, so I'm going to check it out, and if I want changes I'll suggest them. If you're inflexible on making changes, then I guess we won't sign. My response to "formality" would be, if it's important then it matters, and if it's not important let's just take it out.

It's really funny how these things suddenly change if you challenge them. Stuff that's "just a formality" suddenly becomes super important if you try to remove it. Stuff that's "standard and cannot be changed" is suddenly completely negotiable if you tell them you'll walk if it's not changed.

pvg18• 11 years ago

Well, I hate to be the 'do you even lift, bro?" guy but do you work in the US? Has an AoI never crossed your desk? These aren't some oppressive tools of the man trying to keep you down. They're an attempt to head off the terrible problems that arise when IP issues are not explicit. And yes, they're standard. Was your response to 'standard' the same last time you signed an agreement for apartment rental or car insurance? How did that work out?

olefoo2• 11 years ago

Remember that this contract is a negotiable agreement.

You can strike clauses and file an amended agreement, they can refuse to accept such things; but you are not obligated to sign unless they are compensating you adequately for what you are giving up. Approach this as an equal; decide what _you_ are willing to put up with. Nobody on this forum can tell you what you can and cannot live with.

Do figure out your BATNA at this time.

log_n• 11 years ago

The compensation part is actually really interesting. My particular industry is notorious for using really strongly worded non-competes. Those don't fly at all in California but they do fly in a fair number of other states. In Illinois there was a court ruling that stated that non-compete agreements are not enforceable unless a specific bonus is paid for signing the agreement. Continued employment (in that case of just under 2 years, after an acquisition) was not enough compensation.

So, if you are asked to sign one of these things either ask for some cash up front or hold in your back pocket that it's probably not enforceable (though it can certainly end in litigation which can be terrible for everyone involved).

hga• 11 years ago

but you are not obligated to sign unless they are compensating you adequately for what you are giving up

In the US, at least in general, this is a contract, and without the employee getting "consideration" it's not valid. And mere continued employment doesn't count, they'd have to give you something extra such as a raise or bonus.

olefoo2• 11 years ago

What I meant by 'not obligated to sign' was that there are more than a few paths open. Some of those paths involve separation from this employer. The original poster needs to figure out what his options are, and what he can do if he can't negotiate an outcome he finds satisfactory.

ninjakeyboard• 11 years ago

I was cut after an aq - at least you're still there :)

bsder• 11 years ago

Get a lawyer to look this over.

LegalShield (https://www.legalshield.com/) is effectively a multi-level marketing scheme, but the product is actually sound. It has helped a couple of friends of mine with both contract and criminal defense issues.

LegalShield is also very useful if you happen to suffer from "driving while brown/black" as they can be called 24/7.

uberweb• 11 years ago

This sounds like a plot lifted straight from silicon valley.

theklub• 11 years ago

First thing I thought of too.

retrogradeorbit• 11 years ago

Strike the clause. You are in a negotiation. They are going to structure the contract to be filled with things they'd love to have. Most people just sign. But there a clauses that are love-to-haves, but not must-haves. Maybe this is one of them. If it's one of the must-haves, they'll let you know by saying they cant accept the contract with that clause struck.

vacri4• 11 years ago

And talk to your colleagues - the more of you that strike a clause, the more political weight you'll have. Others may also not realise the issue in that clause.

I struck two clauses in my catch-all generic contract when I signed on here: no installing software on my own machine; and no installing free software. As a sysadmin hired to admin linux, these had to be struck or I couldn't do my job :)

calibwam3• 11 years ago

Maybe the colleagues should start working in some kind of organization? Then they could get real political weight.

sib• 11 years ago

We did exactly this (discuss among employees and collectively object to onerous non-compete terms) when being acquired by a much larger company. We were successful in having them change the terms of the new agreements to be much more reasonable.

Animats• 11 years ago

As others pointed out, you need an hour with a labor lawyer.

Fish and Richardson, the law firm, says "Employees: Non compete agreements - don't sign them.[1]

It's often effective to take the contract, cross out and initial sections you and your lawyer consider overreaching, sign that, and turn it in. Then the company has to argue with you paragraph by paragraph, tying up their legal counsel, if they really want those terms. Also, there are special legal provisions about requiring a new employment contract from existing employees.

I went through this years ago with a very big company, refused certain clauses, and after some huffing and puffing, they gave in. This was important, because I did work for a startup on the side and got stock.

[1] http://www.fr.com/files/Uploads/Documents/Dos-and-Don%27ts-o...

blazespin3• 11 years ago

Lol, be advised this may cost you your job if you are serious and not bluffing. Get a good competing job offer before trying this. Or be willing to go unemployed (most engineers can risk this)

If you are serious, talk to your lawyer. Don't guess or negotiate randomly. In some states this boilerplate language is meaningless, in others not so much.

You could be a critical part of the acquisition, in which they bend. Or you could be a part of the product that was going to be redundant anyways and they will be glad of the excuse to let you go.

calibwam3• 11 years ago

If the company wants to hire you, they will want to negotiate a deal that works for both parties. Crossing out and signing might be a bit harsh, but there should be no problem saying to the employer that you disagree with some sections.

soup10• 11 years ago

Any half decent employer that isn't willing to negotiate is just going to say that. They risk losing a hire if they say that though, so some will be willing to negotiate. If you try to bluff them, it almost certainly won't work because nobody wants a troublesome employee with a big ego, so if your going to walk because of the non-compete, you better mean it.

vladimirralev• 11 years ago

Even if they bend, they will get pissed off and will likely retaliate in some passive-aggressive way. And there are a million ways to screw you over, especially with equity, bonuses or promotions. If things don't work out smoothly, that's the end of it.

ngoede• 11 years ago

Yeah...I saw people try to do this during an acquisition and get told they could sign or leave.

tptacek3• 11 years ago

I've seen the crossing-out-and-initialing thing work.

I've never heard of it causing a problem, but I've definitely heard of it not working.

blazespin3• 11 years ago

I did it once, they said sign or don't come on board. If you are bluffing, yes, go ahead, you probably have nothing to lose. Microsoft, I know, would laugh if you pulled that.

smcl• 11 years ago

There's a relatively famous (and admittedly extreme\unlikely) example of this working in Russia, where someone changed his bank contract who blindly accepted it: http://rt.com/business/man-outsmarts-banks-wins-court-221/

InclinedPlane5• 11 years ago

Both parties need to initial the crossed-out sections for it to be fully legally binding. It's best to just ask for a new version without the sections you don't want to agree to, it's no use trying to fly under the radar, that's dishonest.

cvs268• 11 years ago

Relax. Take a break. Watch Mad Men. Specifically this episode http://www.imdb.com/title/tt1484414/?ref_=ttep_ep13

kzhahou• 11 years ago

Assuming I were to sign and return without enumerating any specifics THEY WOULD OWN the IP to anything I've done previous to this?

ianal, but fwiw here's an interesting tidbit I've picked up from lawyers in the past, when in a similar situation: they don't necessarily think of it as "we will own your IP." Instead it's "we will CLAIM to own your IP." The point being that it's not some absolute uncontestable ownership. You're always free to claim ownership yourself, despite anything stated in writing.

Anyway, I thought it was interesting because my non-lawyer brain thinks in terms of things I own and don't own, end of story. But the legal department thinks in terms of arguing ownership and resolving disputes in front of a judge.

rmc8• 11 years ago

Perhaps think of it as "joint-ownership"? You and your husband might both "own" your house/apartment.

rhizome3• 11 years ago

I think it's more like Schroedinger's Ownership

hinkley• 11 years ago

Do not, under any circumstances, go to your bosses looking for advice on this.

In many cases the C-level employees of the old company have bonuses tied up in retaining a certain fraction of the original employee team for the term of their incentive package, and they lose out on part of their payout if they don't.

Not to say your bosses are going to steer you wrong, but it's very likely that it's now a conflict of interests for them to weigh in.

mnw21cam• 11 years ago

That sounds like a really big opportunity to me. Those bosses are going to want to give you some leeway in order to retain you, which gives you some bargaining leverage.

jucaloma2• 11 years ago

yeah, come to the hackerdojo if u are here in the Peninsula. We have a resident lawyer here.

jucaloma2• 11 years ago

Well, the typical state of things, come to the hackerdojo here in Mt View CA, we have a resident lawyer that can probably help you with any questions.

jacquesm9• 11 years ago

Talk to a lawyer. On top of that: the company being acquired does not technically (normally) force you to sign a new contract, they should honour the terms of your old one. But depending on where you're employed they might easily find some grounds to throw you out if you don't sign it so a lawyer should be your first stop. And not a lawyer in any way shape or form associated with the company, make sure they are really on your side (with very large companies especially in smaller towns it can be quite hard to find a lawyer that has not been in some way employed by the company before or that is not in a partnership that has dealings with the company).

The real question is how much do you need this job? What is the state of mind of your co-workers about this subject?

Good luck!

spacecowboy_lon5• 11 years ago

This is pretty standard for I assume the USA. And I would avoid Uber for lawyers you need a real lawyer who specializes in labour law.

As my mate Patrick who is a senior Industrial relations specialist and a lawyer said you don't want the guy that did the papers for buying your house advising you.

grabeh3• 11 years ago

When you say acquisition, I'm assuming you mean an asset acquisition rather than share purchase? I only say, because technically if it's the latter, the contracting entity won't have changed and depending on the State/country laws, there is no change in the employment relationship.

It's a different matter for an asset acquisition but generally, if you're performing the same role, in certain jurisdictions your existing contract terms have to be respected (this is the case in Europe at least, I would assume that in the US, the position is more flexible though).

You'd like to think your new employer is reasonable and would at least consider feedback/amendments from you in the first instance. At worst they can reject the proposed amendments and then you will have to decide to accept or look elsewhere, but at least you would have given it a go.

Contracts obviously seek to impose clarity on a relationship and so I have some sympathy with a company attempting to create a completely black and white position (if it's not carved out, it's ours). If you are concerned about this approach and want more flexibility then you could revise so any work in your private time unrelated to anything work-related is yours. This comes with its own pitfalls in some ways - it's difficult to nail down with clarity where the dividing line is, which in part explains the company's desire for a black and white approach.

In terms of ownership of previous IP, it would depend on the wording of the agreement, they might just be looking for an assignment of future IP developed whilst working for them, or they might want an assignment of past IP not expressly referenced in the agreement. The latter would be rather draconian but that's not to say the company wouldn't request it!

I'd be glad to give a read of the contract on an informal basis, if you want.

jacquesm9• 11 years ago

And if it is an asset acquisition then you're technically still employed by your old company and you'd need to formally apply for a job at the new one.

These kind of details are exactly why you should hire a labour lawyer. Also, your 100% that if it is a share purchase (even if only a majority stake) that the old contract is simply still valid.

Acquisitions of any kind don't magically invalidate all the contracts the company has entered in over its lifespan.

grabeh3• 11 years ago

Like I say depending on the jurisdiction the existing terms may have to be respected due to operation of law.

That's the case in the EU with the Acquired Rights Directive (and national implementations) which covers transfers of businesses/undertakings. Employees will automatically transfer, provided that in certain cases employer can update terms and conditions/make redundancies where justified (so called ‘economic, technical or organisational reasons’).

chrisbennet2• 11 years ago

If an employer wants you to sign a new employment contract, wouldn't that imply they were re-negotiating your employment?

"I assume from this new employment contract that we're renegotiating my employment. Let's discuss my new salary..."

smileysteve2• 11 years ago

As most states are At-Will, both the employer and employee can do this whenever they please.

chrisbennet2• 11 years ago

That's orthogonal my point. My point was that when an employer gives you a new employment agreement you should recognized this for what it is - a renegotiation of terms. At that point, you should feel free to negotiate right back.

At-will simply means that they can fire you if you don't sign.

flanbiscuit• 11 years ago

when I began work at a startup once there wasn't explicit language that said they would own what I came up with outside of the office but the language in the contract was vague enough to me that I felt it could be interpreted that way. It also asked me to disclose any existing items. I had them change the language to specifically mention that they would own anything I worked on while inside the office on their computers but I would own anything I did outside of the office not on their computers. I didn't really have anything going on personally at the time but I wanted it clarified just in case. So they key here is that you can negotiate and get them to change things to fit your needs. Like everyone else is mentioning here, take the contract to a lawyer.

irakli• 11 years ago

upcounsel.com is "uber for lawyers"

U should never sign anything this serious without consulting a qualified lawyer. Money you will spend is worth it

BradRuderman• 11 years ago

I work at UpCounsel.com and we can definitely help your business or any business with legal needs. Although we are a marketplace, and we align with the on demand economy, the uber reference doesn't necessarily fit since it assumes the supply (drivers) are all created equal. With UpCounsel our supply (lawyers) are carefully curated, and we match you with a set of lawyers who meet your specific needs. Similar to uber, our lawyers must maintain a high rating while on the platform. Unlike Uber, once you find a lawyer who meets your needs you can continue to work with them on the platform, easily and on-going. Please email me with any questions, or if we can help you with your legal needs. My email is brad [at] UpCounsel.com

fizx• 11 years ago

To be honest, this sounds like a perfectly normal contract. The larger company quite reasonably wants not to have the employees of its 19 acquisitions to each all have completely different paperwork.

Personally, I find that the easiest way to deal with prior inventions paperwork is to list all of your prior inventions in semi-specific ways. In a previous company, I listed my prior inventions as "a search hosting platform, with associated technical and business processes."

So hypothetically, if BigCo wants to be nasty about a nifty billing trick I told them about (which I had used previously), I can say: "I disclosed that as a prior invention: it was an 'associated business process' I mentioned."

But really, the IP/inventions stuff almost never matters to employees, especially at larger companies. If your previous inventions were so amazing, why did you get a day job doing something else?

burgreblast• 11 years ago

Super simple: enumerate your inventions and projects and ideas.

If that's not easy to do there's a good chance they're ideas still germinating in your head. Fine, write those down too. Be general and land-grabby if you like.

I'll bet you can come up with 100 "projects" in about an hour, and that will well protect your legitimate interests/claims.

You can still spend an hour with an attorney telling you a) you don't have to sign it, but b) you might not get the job.

But if you have a sweet list, then you're covered.

a5seo• 11 years ago

I have simply described pre-existing IP very very broadly and vaguely, and not had a problem. HR and legal are less likely to challenge what you write than changes you make to their contract language.

radley• 11 years ago

I concur. I'll usually start with a few apps, then broad ideas, then negate the whole thing by saying any future ideas and/or projects.

acafourek• 11 years ago

I've used UpCounsel for "on-demand" lawyers for things like this. You describe the project and what kind of help you need, then lawyers bid fixed rate quotes. In my experience turn around for quotes is less than a day.

throwaway5493285• 11 years ago

This isn't legal advice. As a practical matter let me tell you exactly what I, personally, would do in your exact situation, as an employee. I am very open and approachable, and have never gotten into legal trouble with anything. I personally would feel completely comfortable following the steps below and would not personally consult a lawyer. I am telling you precisely what I would do if I place myself in your shoes.

First, in the contract, you state that the section you mention talks about past, and about present IP. I would, on the appropriate page, prominently cross out the section on past IP (completely) and date and sign (full signature) the margin. (i.e. indicating that IP created before employment isn't covered or referred to at all).

In the same section, regarding the present and future inventions, I would write by hand in the margin "Except on my own time and outside company resources" in the margin of that section, and date and sign (full signature) it.

So there are two changes: completely cross out the entirety on past inventions; add an explicit "Except on my own time and outside company resources" regarding present and future inventions. (I would retain the language, i.e. not cross it out completely.)

I would then sign the last page of the contract (i.e. wherever your signature belongs) with a note saying "except past IP, p.6" (or whatever page it appears on) and date and sign that.

This to me makes it completely clear exactly what I agreed to, anyone glancing at the signature would be told to look at page 6, where they would see a totally reasonable crossing out of past IP assignment, and a totally reasonable statement that I own IP created on my own time. No reasonable human could possibly be anything less than satisfied with that. I would also be satisfied with it if an employee gave me that back.

It's a lot better than underhandedly trying to change the contract without calling attention to the change. It's precisely what I would do. Anyone who said, "we're really going to need your own IP" would look really silly. I don't think I've met anyone who would have the gall to say that. You've also signed and returned the contract.

13hours• 11 years ago

I'd go even further, and actually discuss it with them before making these changes, not just hand in the signed contract with the clear changes. Tell them : "I'm uncomfortable with this. What would make me comfortable is ..." and then detail what you are describing.

throwaway5493285• 11 years ago

I (personally) wouldn't. The boilerplate text their lawyer originally wrote is inapplicable, but they're not bad people, it's just that that particular lawyer has never had an idea in their life. (Only someone who has never had an idea would think a person can list every idea they've had.) so besides crossing the inapplicable section unambiguously, it's not worth a comment. I wouldn't say I'm uncomfortable with it. I am extremely comfortable, with the whole contract, I just removed the part about past IP since it obviously doesn't apply. The rest looks fine! Excited to start. :)

really, it's hardly worth a comment. they obviously don't mean to acquire IP from your past.

harryh• 11 years ago

This is a completely standard form that I've filled out for every technology job I've ever had. It's really nothing to worry about. Everyone on this thread telling you that you have to talk to a lawyer is being silly. It's a waste of time and money.

DennisP3• 11 years ago

I was faced with this last year. I'd been at the acquired company for sixteen years, so most of my ideas on the side came about after I started employment. There were too many to practically list anyway.

I met with a business attorney for an hour. He said the terms were enforceable in my state; in fact, they'd taken it as far as they could without making it unenforceable. There were significant and potentially very expensive downsides for me.

In my state, employers can fire employees for any reason, so there was nothing stopping them from firing me for not signing.

I tried to negotiate, but they were inflexible. Fortunately the job market here is good, I had significant savings, and I had been thinking about taking a sabbatical anyway to develop some of those ideas. I refused to sign, they asked me for my resignation effective three months later, and I gave them a letter.

All this stuff varies by state, so meeting with an attorney in your state would be a really good idea. Mine cost $300.

irishloop• 11 years ago

Sounds like $300 well spent. Too often, I think, we take legal matters into our own hands when a small investment up front could save you so much later. If we accept how many others are inexpert at technology, what makes us think we're suddenly legal experts?

DennisP3• 11 years ago

Yep. I read the contract very carefully myself so I could ask specific questions of the attorney. That was a big help in getting the most value for my $300. Read it like you're examining source code for bugs.

The attorney pretty much confirmed what I thought the contract meant, explained a couple provisions I didn't understand, told me what could be enforced in my state, and outlined how things could unfold if things went sour.

Something else he mentioned is that startup investors tend to be wary of these sorts of IP provisions, and often require old employers that hold these contracts to sign away any rights to relevant ideas before they'll invest.

dpeck• 11 years ago

agreed, I've pretty much decided that I don't even have any business reading a contract. Legal meanings of words and my interpretation of them could be completely different.

In reality with a legal document a common persons options are to sign it without reading and accept whatever it is, or hire a lawyer to explain it to you.

I wish it wasn't that way, but it most definitely is.

rmc8• 11 years ago

In my state, employers can fire employees for any reason, so there was nothing stopping them from firing me for not signing.

At will employment screws over us white collar, high end, knowledge worker. Here in many states in Europe, there's no at will, and if your employer is bought, then they have to give you a job on the same, or better, conditions.

At will is bad for tech workers.

wpietri3• 11 years ago

As a fellow tech worker, I'm fine with at-will. At least in the US, shitty bosses aren't particularly constrained by not being able to fire you; they can be shitty to you in plenty of other ways. E.g.: http://blogs.riverfronttimes.com/dailyrft/2015/06/randy_henr...

I'd much rather have an honest firing than a subtle, long-term shadow war with people for whom politicking is their job.

(Note that I don't think it's as good for routinized jobs or situations with illiquid labor markets. But there I'd rather solve it with unionization than direct government regulation. US governments just don't seem to be very good at this sort of regulation, possibly because our diversity of peoples and political viewpoints means we lack a strong shared understanding of "fair" in the same way one sees in, say, France.)

sago• 11 years ago

At will employment screws over all workers. At least white collar knowledge workers are somewhat less fungible. The ability to fire an unskilled worker is unconstrained by law or business efficiency.

The rhetoric around at will employment as being good for employees, because it makes them more flexible, is a fig leaf. It is carte blanche for exploitation.

smitherfield• 11 years ago

Tech workers over here are paid about twice as much (before taxes!) as tech workers in Europe, so I'm not terribly worked up about US employment law. All those regulations aren't free, and one way or another the cost comes out of your disposable income.

USNetizen2• 11 years ago

I'd much rather own/operate a business in an At Will environment. If someone isn't performing, you don't have to worry about tens of thousands of dollars (or more) in legal fees to defend your decision to get rid of them. Add to that all of the lost productivity and taxes paid funding a position for someone who is wholly incapable and then having to create a year-long paper trail to back up a decision you came to as little as a month into their employment.

That is time and money that could have gone towards hiring high-skill, productive people who actually WANT to work at your company and supporting expansion (e.g. new job creation).

Contrary to your statement, Knowledge Workers fare the same in At-Will situations as they do in others because of the high levels of job demand. The demand itself motivates employers to retain them (and if they don't want to incentivize their retention, there are thousands of other companies that will).

I'm speaking, of course, as an employer who has offices in both At-Will and other states in the U.S.

stephengillie• 11 years ago

At-will employment puts FTE/Salary employees on an equal footing with contractors. Which really just brings employment back down to pay, benefits, and working environment & employer culture.

You just have to recognize that nobody can truly predict the future, nobody's going to protect you in every situation, and that you have to have your own "big ball of money" to sit on in case of emergencies.

liopleurodon• 11 years ago

What state is this in?

RoryH• 11 years ago

If you're good enough at your job and the company values you then don't sign... What are they going to do. Surely your existing contract should still stand.

thom_nic• 11 years ago

I've had numerous previous employers (maybe all of them) who ask for a list prior inventions. So it's definitely not uncommon.

Certain things (like projects on Github) which you could easily prove existed prior to your engagement with that company probably aren't an issue although yes, their wording is overly-broad.

I've simply filled out the form, with a one-sentence description and/or hyperlink for each. NBD.

wickedlogic• 11 years ago

Enumerate the things you have done that aren't owned by the company, and then either have an interesting discussion around the list or watch legal sign off on it and move on. It really is just that simple.

fleitz• 11 years ago

yes type "<city name> employment lawyer" into google, then press the number listed on the page.

nirmel• 11 years ago

I'm the founder of Lawdingo.com (YC W13). We get people lawyers in minutes, just as you're looking for. If you just want some cursory advice, we'll get you an advice consultation with an employment lawyer who routinely looks at startup employment contracts for $50. If you'd like the full contract reviewed, that will cost more, but as others are suggesting, would be well worth it. Feel free to email me at nikhil@lawdingo.com and I'll help get you connected to a great attorney.

nadams• 11 years ago

detailing how the company owns anything I come up with.

I've always been under the impression that anything you do in your spare time is your own property - I would find it hard to believe that you can sign away that (in the US) unless it's like a super secret organization/government.

IANAL - if I was in your position I would take a pen or sharpie and scratch out the terms I didn't like, sign it, and hand it back to them. There is nothing saying you can't alter a contract before you sign - but they also have to agree to the changes obviously [1].

[1] http://contracts.lawyers.com/contracts-basics/contract-modif...

Freshandco• 11 years ago

Check out LawGo Inc.(https://lawgo.co/services/employment-law-employee/). They have fixed prices and looks like employment contract review starts at $89.

smileysteve2• 11 years ago

Assuming I were to sign and return without enumerating any specifics they would own the IP to anything I've done previous to this?

I always try to enumerate anything and everything that I can of existing projects and inventions. Enumerate every repository on Github. Enumerate a title (can be very ambiguous) of every idea or concept that you are working on. Enumerate any consulting work you've done in the past and a "consulting" item.

At the very least, the advantage of this is that it drastically increases the legal cost in researching to see that what you wrote was not enumerated or covered in any way by the enumeration.

IPlawyer• 11 years ago

What state are you in? I'm a lawyer that does this type of thing.

musesum• 11 years ago

In California, Labor Code Section 2780 gives some rights - and some exceptions.

In previous agreements, I've listed prior inventions that were not assignable. Recently, I was presented with an agreement that had what I thought to be a similar exclusion section. But, no; it was worded in a way that could grant company a license to all my listed IP. Moreover, a colleague took the legal department to task because it could have been interpreted either way: either exclusion or assignment. Pretty ingenious. So, I put in that section "No IP assignable to company" By then I was going to air-gap all my work. I bought a separate laptop. Use a separate phone. Filed provisional patents the last day of my previous gig.

I don't fault the company for erring on the side of caution. The question to ask is: "does what I want to do directly compete with the company's core business?" If yes, then you have a problem. If no, then they probably won't care. In my case, the IP didn't compete. But, I decided to make a clean break, anyway.

(Not a lawyer - MMV)

kyleblarson• 11 years ago

Isn't this just a standard prior art clause?

pc862• 11 years ago

Are there any "uber for lawyers" services online where I can pay to have someone with bonafides read through this for me?

I don't want to sound flippant but just go to a lawyer and pay them to read through it. There are too many gotchas and externalities, not the least of which is your state of residence, and even county or municipality.

As the top two comments in the top thread state, spend a few hundred dollars and don't take this into your own hands, or the hands of someone in a completely different jurisdiction.

Nelson69• 11 years ago

Just out of curiosity, are your ideas and inventions at all related to the industry your employer is in?

I went down the road of lawyering up while I was at IBM, I was young and it was effectively a waste of money as IBM simply had no interest at all in just about any of the ideas I ever had. My manager at the time even said as much, "if you're not competing with us, we really don't care and won't steal your ideas." Worse, they knew the drill, more than one time they simply said, "these are our terms, list off your inventions, we're not going to rewrite this document.."

If your ideas are in the same realm, it seems like a larger ethical question, personally, I don't moonlight doing what I get paid to do during the day, it's just messy and I do personally believe it is not honoring the employment contract, but that's just my opinion. If they aren't related to their industry, then what's the downside of claiming the ideas? It's a two way street, they will know about the ideas but you will have told them with some degree of confidentiality being understood.

rebootthesystem• 11 years ago

Well, if they are paying you to develop things and you do that at work, then they own it. That's what they pay you for.

On the other hand, whatever you do outside of work is another story. If you work on advertising and develop a pair of sunglasses for dogs --in other words, something completely unrelated-- it is unlikely there will be an issue.

However, if you develop something that is a derivative work of what you were paid to develop at work. You took a technology you were paid to develop and developed it further on your own time. Well, you better talk to an attorney.

On these matters I always ask engineers to place themselves in the shoes of the one paying the bills and the salaries. How would you like to pay a group of engineers really good salaries to develop something for you over, say, two years, and then have those engineers take that, evolve it on their own time and launch a competing business? You paid them for two years to both learn and develop a foundation they would not have had had they not worked for you.

Forget legal issues here. What are the moral and ethical issues related to taking something you got paid to develop for someone else, making it your own and then using it to compete against your former employer?

Talk to an attorney.

Ask HN: Company got acquired, new contract seems oppressive

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