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Comment by etjossem | Hacker News Reader

When an employer sends you their boilerplate agreement and you see "Employee will not work for a competing business", you're not looking at the only employment agreement they've ever signed. You're looking at the version most favorable to them. Strike out the "for 2 years following employment" and replace it with something reasonable like "while employed by the Company."

It's customary to ask for a ridiculous clause like this up front, because no candidate will walk away over the mere sight of it. They get one free chance to screw you over, just like when you were talking about salary and they asked what you made at your last job. But you have to do your part; politely bounce it back.

You are a professional and this is a negotiation. No one will begrudge you putting a reasonable counteroffer on the table.

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Man, I don't know who all you Captains Of Industry are who are able to successfully negotiate things out of standard employment agreements, but most of us do not have this option. I remember once objecting to a non-compete, and tried the "strike it out" trick, and I was given a very clear "Sign it unmodified or GTFO" warning. I don't think negotiating these things is as common as some of you believe.

Then you did what you could. My comment was more directed towards those who don't even raise the point at all.

Whether you're successful depends on the company, your state laws surrounding noncompetes, whether you're in a good bargaining position, and how easy internally it is to change "standard" employment terms. I can't promise all those things will align, but it's helpful to remember that in many positions and companies this is a negotiable term.

Many reputable companies won't ask for a ridiculous clause, and you might choose to work for them, instead. For example, all of the IBM employee paperwork I signed (after selling them a startup) had notices of where California law gave me additional rights compared to the rest of the country -- and of course, no non-compete. I quit 3 weeks later, no hassle at all.

Why? Why shouldn't they just be banned outright?

I personally think California made the right call banning them outright. The rest of the country would do well to follow suit.

I'm talking about short-term, individual ways to solve your own noncompete problem.

I didnt know they were banned in California. Pretty sure my contract still had one in it.

Sure, lots of contracts still contain them. They're just completely unenforceable under California state law.

Broadly speaking they're unenforceable in the EU as well, anything beyond 3 months restriction in the UK would certainly fall under restraint of trade.

Employers include them in contracts to scare people, and generally it works.

That's a bit of an oversimplification. They are enforceable under California law, but (AFAIK) only when equity is part of the employment contract. I'm not sure if stock options count; you'd need to ask an attorney.

Bottom line: if a company demands that you sign a noncompete agreement, that's your cue to ask for a chunk of the company.

Are you saying that employees with a standard RSU grant are not eligible for protection of that law? I would guess most software developers in California are receiving some kind of RSU or option grant.

No, it has to be significant equity. Like Partner or Founder equity.

IANAL and this is not legal advice.

In California, "every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void", except for certain enumerated exceptions (Cal. Bus. & Prof. Code, Sec. 16600 [BPC 16600])

Those enumerated exceptions are, in summary form:

(1) Someone selling a business and/or its goodwill may agree not to compete with the business thus sold, if the new owner is carrying on the same kind of business (BPC 16601).

(2) Partners in a partnership may enter an agreement in anticipation of an eventual separation from the partnership, such as they would be able to do when selling their interest as described in 1, as may members of an LLC, mutatis mutandis. (BPC 16602, 16602.5)

Receiving equity in a business doesn't seem to qualify for any exception.

Yeah, that's just for the chilling effect on people who don't realize it's unenforceable. A California noncompete is not something you'd want to take to court as a plaintiff.

Why would I want to work somewhere that I notice has just taken a free chance to screw me over?

Because the opportunism of the company's legal department (or laziness of them using RocketLawyer boilerplate) doesn't correlate one bit with whether you'd want to work as an engineer there. Other signals matter way more.

That's getting to emotional. The definition of "screwing you" is you taking their first offer, no matter what it is. Both sides should be trying to get as much as they can in a negotiation.

No, this is actually screwing you. Preventing you from working for any amount of time after you've left their employ is actively trying to screw you.

Do you feel you're getting screwed if they don't offer you the maximum salary they will pay in their first offer?

Irrelevant.

This is not true at all. Getting too high of a salary may increase your chance of getting canned (performance or RIF.) And offering too low of a salary to a new employee may cause problems if the new employee finds out they're paid less than their peers.

You're never going to convince an employer to give you "too much" money. And employers have no problem low balling you - they really don't think you're going to find out what all your peers make, which is why they discourage the practice of sharing salary information so heavily.

I've seen both of these things happen in real life, and have worked at companies that had an explicit policy against low-ball salaries.

Startup valuations can also be "too high" -- making it hard to raise the next round.

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