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I'm about to begin a new full-time job and am looking over the assignment and non-compete agreements in advance of my first day. There are a few clauses that I'm not super-excited about - nothing that would be a deal killer, but things that I'd prefer not to agree to.

Is it at all common for new employees to return marked-up agreements? I know I do this with freelance contracts for work that I do on the side, but those are generally with a relatively small firm or individual who's using a boiler-plate contract they probably found on the web. In this case the agreements are clearly crafted by legal, and this is a larger, well-established company.

To be clear, I'm not asking about the legal ramifications of doing so (not concerned, in this question, whether my edits would be legally binding or anything like that), just whether or not this is something people do or if these agreements are generally seen as sacrosanct.

Generally when I have to mark up a client's contract it's because of overly broad assignment provisions. In this case, the agreements are actually fairly sane and rational - they already exclude work I do outside of and without the resources of the company from assignment. The one thing I don't like is a provision in the non-poaching clause that states that I can't manage an employee of the company for two years after departure.

As a new employee, is it common to edit assignment or non-compete agreements before signing?

UPDATE

Thanks for all the responses. In the end the only issue that I had seems like an edge case and not worth making an issue of, so I'm just going to let it go, but good advice for future contracts.

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    @cori Your reference to "client's contract" makes me wonder if you are talking about contract or full-time employment. Could you pleas clarify in your question? – jcmeloni May 26 '13 at 15:13
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    @jcmeloni the agreement I'm referring to is for a new full-time job. The client contracts I mentioned are for on-the-side freelance work that I do from time to time. Question updated to (hopefully) clarify. – cori May 26 '13 at 15:31
  • @cori Thanks for clarifying. The range of marking-up depends on that type, in my experience. – jcmeloni May 26 '13 at 15:46
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    comments removed: Please don't answer the questions in the comments. These can't be easily voted on as the best answers, and they may inadvertently prevent others from providing real answers. Please see How should I post a useful non-answer if it shouldn't be a comment? for more guidance. – jmort253 May 26 '13 at 20:44
  • Tip for your next go-'round: Ask for anything binding (non-competes, non-disclosures, IP ownership, company policies) before accepting an offer. Once you've accepted, your new employer is in a much better negotiating position than you are. – Blrfl May 28 '13 at 16:50
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Executive Summary

As a new employee, is it common to edit assignment or non-compete agreements before signing?

If the conditions are reasonable, it is not common. Here are the main reasons:

  1. It isn't an easy sell
  2. There is no possibility of a counter-offer
  3. Most people aren't lawyers

Is that your plan?

If the conditions are reasonable, it's hard to argue against them. If you don't want to poach employees, why would you be against a clause making it a contractual obligation?

"But Employer, what if we part on good terms, and I join an employer that hires one of your former employees without my knowledge and places him below me without me knowing!"

So what's the solution, to throw out any clause prohibiting poaching because there could be a rare corner case? You can just ask the employer to assign them elsewhere until the expiration of that clause, and there is almost zero possibility that a manager would not be told about the work experience of someone they are supposed to manage.

Is this an ultimatum?

Unlike haggling over vacation time, perks, and salary (where you can trade from one to get more of another), the contract is usually delivered after the major items have already been decided. At the end of the day, one side has to say, "It's my way or the highway", and that's a risk that a lot of potential employees just don't want to take, especially if the clauses are reasonable.

If you do have deal-breaking clauses (things such as, "we own all your work produced anywhere using any resources in any way for now and forever. If we even think you thought up that idea while sitting in the company restroom, we will sue for ownership of that idea and send you to the poor house") then they should be discussed earlier if they are of a concern to you.

I enter in to contract negotiations in good faith, assuming that there won't be any absurd clauses like that in there, since I wouldn't want to work for a company that made crazy claims (and wouldn't feel uncomfortable walking away if they refused to remove them).

It's industry standard.

Most people are not lawyers, and won't even know an unreasonable clause when they see one. So the fact that as someone who does check you find it reasonable means that most people probably didn't bat an eyelash and signed, both in this company and others like it.

How many full-time employment contracts in your industry have you read over? Probably fewer than the company lawyers have. If the contract seems reasonable, chances are it isn't out of line with what the industry standard is. Even if it isn't, claiming that it is industry standard (or company policy) is going to put all but the strongest of souls off on pushing too hard.

Suggestions

If you really don't like the non-poaching provision, rather than fighting to remove it, fight to improve it. For instance, instead of this text:

For 24 (twenty-four) months after termination of this Agreement, the Employee is prohibited from directly managing a former employee of the Company

You can change it to something far less likely to cause an issue (assuming you aren't directly going to poach an employee).

For 12 (twelve) months after termination of this Agreement, the Employee is prohibited from directly managing a former employee of the Company in a direct competitor

Alternatively you can make it a bit more roundabout and more likely to work out in all reasonable cases for you:

For 24 (twenty-four) months after termination of this Agreement, the Employee must ask the consent of the Company (not to be unreasonably withheld) before directly managing a former employee of the Company. If the Company does not expressly prohibit such employment within 4 (four) weeks of submission of the request, the request will be implicitly granted.

Both will be uphill battles, but the point is that they both look to give the employer the same right to stop you from doing naughty stuff, while still giving you some leeway post employment if you really need it.

Before suggesting anything, you need to ask yourself, "Am I really willing to walk away from this job if they say no?"

If not, I'd suggest holding your tongue.

  • Would the prohibition from managing some one for 2 years even standup in court as a valid contract term in most jurisdictions? And you could just say assign another person as the manager who then delegates responsibility to you. – Neuromancer Dec 10 '13 at 14:44
  • @Neuro, I am not a lawyer and will not guess at the jurisdiction or whether something will hold up in court. Going to court is a loss 99.9% of the time for an individual because it is a giant cost to you in comparison to the company threatening to file a suit. – jmac Dec 10 '13 at 23:43
  • I woudl agree that going to law is often not a good idea. Having said that I am an accredited case handler in the UK (think of it as a paral legal with some rights of audience) and I have never heard of (in anlgo saxon based law) a contract that attempted you from in the future managing some one from your current employer. – Neuromancer Dec 11 '13 at 16:53
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Is it at all common for new employees to return marked-up agreements?

In the northeast part of the US, I have never seen this happen in over 35 years of work. I don't believe it is at all common here - practices may be different in your part of the world. (It's certainly a different case for contract work - as you indicate, every contract can be different) In companies where I have worked, the standard employment contract has been crafted by HR and company lawyers. In my companies, I'm confident that it would be difficult (and time consuming) to have changes made and have both parties come to an agreement.

Before just marking up such an agreement and handing it back, I'd suggest that you discuss the portions that concern you with either the HR person who gave you the agreement or with the hiring manager. You may find that modifying the agreement to suit your taste is common, permitted, or not allowed - any of these might be possible in this one company.

If you find that changes to the employment agreement are discouraged, you will then have the choice of insisting, or just letting it go - and either direction can be viewed amicably.

I'm a strong believer that it never hurts to ask (at least in my part of the world, perhaps not in yours), if you ask in a polite, non-confrontational way.

Good luck!

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    I've actually seen it done in the Northeast, and with positive outcome. See my answer below. – Hilmar May 27 '13 at 13:33
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In contrast to the other people, I've actually seen it done and successfully so. In most larger company, the agreement has been drafted a long time ago and since then every one just treats it as boilerplate until someone actively questions it.

That's not necessarily a bad thing. My first thought was "wow, this guy is thorough, pays attention to detail, and is not afraid to dive head first into a potentially controversial issue. Sounds like a great catch."

Obviously, you have to ask correctly: respectful and constructive. Have a list of outcomes that are acceptable to you and be clear if that's a show stopper or not. Have a good reason why a specific clause isn't acceptable and suggest a suitable alternative that serves the company's purpose of the original clause.

The company's reaction to this request will be illuminating as well. This could be for example

  1. Who the heck do you think you are, get out of my office
  2. Well that sounds reasonable, but it's impossible to go against the bureaucracy
  3. Hmm, that sounds reasonable. How about we change clause 17 a bit like that and then I run it by HR and legal. Should be no problem

I was lucky enough to work for "type 3" company at the time but this is clearly a good way to find out what the company is made of.

  • I don't have all the details any more. I was the "uncle" in this case, the hiring manager was from a group that my group worked very closely with so I interviewed the guy and followed the hiring progress closely but I wasn't in the drivers seat. I think it was something about the exact definition what IP belongs to the company if it's generated shortly before and/or after employment. – Hilmar May 28 '13 at 16:41
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For big companies marking up the paperwork will not make the transition smooth. They typically bring in a dozen to a hundred new employees at a time, they give you a stack of papers or links to paperwork, and expect some to be completed immediately, some by the end of the day, the week, or the month.

They are staffed to distribute and collect the paperwork. They are not staffed to negotiate. I assume that high value hires don't go through the same process, because they have more to protect.

It is possible that you could mark it up, sign it and not have anybody discover it for weeks. But don't expect to be able to discuss it with HR that first day.

Smaller companies in my experience have less paperwork, and are much more open to side work.

  • "It is possible that you could mark it up, sign it and not have anybody discover it for weeks" -- presumably in a sufficiently bureaucratic company they might sign and return the altered version without noticing ;-) Then either when they come to enforce the contract they get a nasty shock, or else when they notice some time into your employment you get a nasty shock because they invite you to sign the original or clear your desk immediately. – Steve Jessop Aug 18 '14 at 8:23
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I have edited NDAs. Keep in mind something important, just because its called an 'NDA', does not mean that is all that is in there. It is pretty common for contract complex to include non-compete agreements in what they call an 'NDA' to make it sound less heinous. I have been given these by recruiters before they would even submit me. These are often used to block candidates they don't want. Read it carefully.

Most mid-to large companies have fairly generic NDAs. However, read them. I have crossed stuff out I don't like. That being said, I really dislike it when this stuff is dropped on me on my first day. It is more of a threat then. 'Sign it or go home'. I generally ask for all this stuff before I start, if I get back 'you will get it on your first day', I have said either 'then there is no first day' or I send an email and tell them I changed my mind and no longer want to accept their position. Generally speaking if an agreement is fair (and most are pretty generic) they will show it to you in advance.

I have been issued new agreements after I have been working places and they are essentially sign it or you are fired. These include ways to not pay you, all kinds of 'cant quit things' and non-compete agreements that are extremely wide ranging.

Note that just because something you are forced to sign is technically not enforceable, you have to pay a lawyer at your own expense to get it thrown out and when a future employer goes to check references if this agreement comes up, they may not care what you threw out, they may revoke the offer.

Generally speaking a fair NDA will say 'don't tell people about our stuff'. 99.9% of the time their stuff will be useless to you anyway. I am technical. People care about my skills they don't care about the application I worked on. So sure, I'll sign that. The company is just playing legal CYA. Its pretty meaningless. I'll sign these all day.

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    Hey Bob, it looks like you have a lot of experience negotiating contracts (in this case NDAs), but the question is about Non-Compete Agreements, not NDAs. Any chance you could focus your answer a bit more to answer the original question ('As a new employee, is it common to edit assignment or non-compete agreements before signing?') – jmac Aug 23 '13 at 0:08
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    its not uncommon for some companies to call everything an NDA. Its mainly contract companies who do this. If you are giving something binding to sign, its all kind of the same thing from a negotiating stand point. – Bob Aug 26 '13 at 20:40

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