A job offer with a very broad non compete ... but they want to discuss it

Question

I've been offered a job with a company which sounds great, the people seem nice and it looks on paper and person to be a great environment and the interviewer was a really pleasant fellow who knew his stuff.

Now some background, I'm an engineer in almost exactly the same role, it's actually uncanny as it's quite niche, so I can see why they want me. I am from a direct competitor so I already know the kind of work they do.

I was made an offer maybe 20 minutes into the interview, which made me a little wary. The day after, I got a letter offering me the position.

I requested a copy of the contract before agreeing as obviously I need to know if it's a better deal for me, so I asked for a couple of days to review the contract before making a decision.

I queried the contract they offered me because the non competes in it would completely lock me out of my industry for 6 months upon termination, whether instigated by the employer or me. I noticed that the contract basically offered me nothing in return for that clause, and could seriously jeopardise me if they laid me off.

Anyway I queried it, and got a reply back to the effect of it's a standard clause, I was told that it's standard in all sorts of contracts including mortgages and rent agreements, which really got alarm bells going off in my head as I know that the response I got was, faulty logic at best.

I asked the employer if they'd be willing to use a non disclaimer in place of it, remove the clause or compensate me for it with severance and they responded with no. At that point I declined the offer completely and left it open in case they change their minds.

They got back to me offering for it to only apply after a probationary period. I used failing probationary as an example of how bad that clause would be for me in the worst case in my response declining their offer, gotta keep the options open after all and I think they latched onto that.

Anyway I once again re-voiced my concerns and I flat out told them I won't agree to be locked out of an entire industry country wide post termination - especially if through no fault of my own. I also mentioned politely that there was nothing offered in return to me for the clause.

Now being that I declined the offer and flatly stated that I don't want the job if it has that particular clause, they've asked me speak to them in person. I'm concerned that they want me to gain knowledge of their competitor, my current employer and then burn me after the fact so I end up stuck.

So, do I go and see what they say? Or do I decline? Is this actually a normal situation when negotiating a contract? They've said it'd be best to talk about this in person rather than via email or phone.

Answer 1

I think your concerns are valid. You know the ramifications and possibilities if you accept this. They could you use you for information or to complete a particular project and then let you go a day before your probation is up. "Sorry, but it just didn't work out" and you're stuck.

Depending on how valuable you are to where you are now, they could be doing it to hurt your current company. Maybe they hope you work out and they'll have talent that their competitor no longer does, but if you don't, they have still managed to hurt their competitor.

On the other hand, they could be the ones that are scared. They could be concerned that you'll come in and take what you know and go back to where you are now or maybe a startup or something. Going through a probation period would show them that you weren't just there to use them.

The issue is obviously one of trust. I would meet with them face to face and simply ask them what's going on and why they are bent on the non-compete. Ask if there's a history behind this. But I would also come up with a "this is what it would take" offer. Whether it's a certain dollar amount to accept a non-compete or simply a "no way no how" response, I would still talk to them. It shows respect and can help to keep from bridges being burned in the future.

If it were me, I would accept a non-compete from a company that determined to hold on to one. It actually may not be enforceable depending on your location and the reason you left, so that may even be a moot point. California, for example, doesn't permit them (from what I've read) except with regard to trade secrets Regardless, I just tend to be suspicious of anyone trying so hard to do what this company's trying to do.

Answer 2

I was told that it's standard in all sorts of contracts including mortgages and rent agreements, which really got alarm bells going off in my head as I know that the response I got was, faulty logic at best.

Poppycock. There's no such thing as a "standard" employment agreement, and a non-compete clause would have no use being in a mortgage or rental agreement.

It really comes down to either the clause is taken out to remove this risk, or it's left in and you accept the risk. And you are correct - it's NOT a win-win situation.

What if the company's offices burned down to the ground, or were moved to the other end of your country (and you couldn't relocate)? Technically, you'd still be barred, and the company could still bring action against you. Would they get a judgment in court? Couldn't say, in such a context.

Don't worry too much about the "why" in this situation. Do be concerned with protecting your own interests. As a seasoned engineer, you have a LOT to lose.

Answer 3

Go or don't go - that will just be opinion.

But it sounds to me like they want to hash out the details to see if you'll accept an offer.

Sometimes many back-and-forths via email get silly and face-to-face discussions can cut through the issues quickly and efficiently.

Answer 4

Many times you will find that when there are ridiculous / unacceptable terms in a contract, it's not because there are any reasonable grounds why these terms should be there, but because some wannabe lawyer put them there.

For example, if there is a very broad (unreasonably broad / unacceptably broad) non-compete agreement, you can tell the company that everything is fine accept that the non-compete clause is unacceptable and that no reasonable candidate will accept it. There are two possibilities then: Either they really mean it. Forget about the job. Or it turns out that the bosses wive's second cousin suggested that this clause was absolutely necessary, and it gets removed.

Answer 5

I'm not a lawyer but I do know some and also people who have had to fight non-coms and the gist of them appears to be that 99% of the time they're all but completely unenforceable. If you're signing something that says that you can't take specific corporate secrets from the company and divulge them to a competitor when you leave, that's one thing. But these all-encompassing varieties of non-coms seem to be out there only to intimidate workers who don't want to hire a lawyer or haven't thought about it that much.

The other thing to watch out for - and again, I want to reiterate that I'm not a lawyer so take what I say with the layman's perspective that it is - is that reciprocity is the backbone of all contracts and also all clauses of contracts. What are you getting in exchange for that non-compete? "We will hire you" is not enough. They need to spell out what you're getting in return. I know a person who, to take it a step further, had an advanced degree that made them only fully employable in a specific industry, and when their (then former) employer attempted to sue them for breaking their non-com, the judge enforced some reciprocity of his own: you either pay this person for the period of time your contract forces them to be out of work or else you drop your lawsuit. I'm not saying you'd be getting anywhere near the same thing but I think it does point to that very specific issue with non-coms.

I would feel free to hear them out and if you have reservations about the non-com, leave it to yourself. If this company wants to force you to sign an unenforceable document and you otherwise like the company, I would feel free to make them feel that false sense of security. Perhaps, if you had a friend or family member who is an attorney or else wouldn't mind spending a couple hundred dollars up front for an hour or two of consultation, get someone who knows law to read it for you and tell you how badly you're on the hook. Chances are, you're not going to be, and to take it a step further, if you are, you probably already have an idea of how far on the hook you'd be.