Non-Compete Agreements - Let's get real

Posted Friday, June 24, 2005 6:42 PM by tmintner

I'm going to chimp here a bit. I can't let Rod take all of the fun.
I had a friend of mine recently show me a non-compete employment agreement that was absolutely ludicrous. It stated that he basically could not do his job anywhere in the world for 2 years post employment and any idea he thought of within 7 years of termination belonged to his current employer. To top it off the agreement also stated that by signing this he acknowledges that this agreement will not hurt his future chances of employment and he waves the right to a jury trial. I don't know about you but that just makes my skin crawl and my blood start to boil. First, let me state that I am a little biased here. I am the victim (and I don't use that word lightly) of two non-compete disputes. Both times I was forced to either pay or give up over $10,000 in revenue. That said, I cannot totally be objective here. Still, the idea of an employment agreement limiting a person's ability to either advance in her/her career or keep that person from working is just flat out unethical.


As a business owner, I can understand how a company would want to protect themselves. I totally agree with intellectual property agreements on work performed for the benefit of the company during working hours or if the employee is working on a work related project off hours that should belong to the company as well. I also believe that a company should protect their assets including financial data and customer lists from disgruntled employees. That is where the employment agreement should end from the employees part, in my opinion. Anything stricter should come with quite a few extra perks such as stock or partial employee ownership. A company should not expect an employee to give up any chance of career advancement outside of their current employer if they have absolutely no control or say in how the company that they work for operates or compensates them.


I also feel that work or projects done on personal time should belong to the person doing the work and not that person's employer as long as it does not overlap with the employer's core business model. If an employee wants to spend his/her own time developing an application for sale, consulting for a couple of Mom and Pop organizations, writing a book or article, or creating a new technical based web site, then that work should belong to that employee. The employer should have no rights to try to claim ownership of that material.
Think I'm being crazy and that this never happens? Well let me give you a couple of examples of people I know. I will leave the names and companies out but you should be able to get the idea:

  • A consultant that I worked with wrote a very popular technical book during his own time after hours and on the weekend using his own computer equipment. His consulting company claimed that his knowledge was obtained on the job and threatened to sue for the profits.
  • Another consultant put together one of the most popular web sites on the web for Microsoft support content during his own time and also was threatened by his employer to give the site over to them
  • Two employees left an organization to start an unrelated business and were sued for making contact with a former customer regarding a product that their previous employer had no intent on ever selling


This list could go on and on. Companies today say that my generation has no loyalty to their employers. How can we when stuff like this is becoming more of the norm than the exception? When are companies going to learn that if they want loyalty then they have to treat their employees with the TRUST and RESPECT that their employees deserve. When employees feel that they are valued and can provide helpful insights into their organizations and are compensated accordingly, they will remain loyal and the company overall will thrive.


I'll stop my chimping now. :)


Thanks for reading,
Tim

Filed under:

Comments

# myITforum Daily Newsletter; June 29, 2005

Wednesday, June 29, 2005 10:56 AM by TrackBack