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they are extremely common in tech. as has been noted, whether they are enforceable is debatable. as far as tech goes, as long as you don't steal source code or proprietary protocols or design documents, or lure away customers, you're usually fine. for instance, programmers switch from apple to ms, constantly, and betweeen other sets of competitors. it's only the unusual cases where these things come into play
i think they are probably more effective as a threat though, i.e. the ex-employee gets worried due to them and acts cautiously
I know I signed one when I was hired. First job ever, didn't really think much of it. I don't remember who or what is on it. That said, I am not worried about it. Most companies I've looked at are not direct competitors, many are not even based in this specific region. I don't even think they'd go to much effort to enforce it. I'm certain some companies are a bit more aggressive though.
Most companies who perceive that they have proprietary technologies, processes or customers have you sign this boiler plate document. Whether it is enforceable is open to debate, and usually the party with the most money and determination to fight it wins.
The agreements I have seen/signed generally say that 'anything you invent here belongs to us'. Any 'proprietary products/materials/processes you use while here belong to us'. And for those that have 'non-compete' clauses (in the UK they call it garden leave), usually they have to continue to pay you for the period, which is designed to keep you from having contact with customers (like good relationships were going to die in six months).
Most people find a way around them, ignore them, and unless you flaunt the previous employers business and practices you are unlikely to incur any interference regardless of what you sign.
Of course, there is always an a$$hole on both sides of the coin who wants to make an issue out of it.....which the lawyers just love.
Non compete can be enforced as long as they are not too broad. I have had them in place for veterinarians to prevent them from opening up a clinic next door after working for mine. Went to court and prevailed as the non compete was geogrphaically specific and for a specific period of time.
On the other side of the coin I have gotten out of one because I had a prior relationship with a client. In tech consulting you cannot restrict something that was in place before the most current agreemnet.
While I am not sure about how common it is in Tech, it is very common in sales. The thing to check on though is whether they are even enforceable in your state. In many states they are not, or they have to provide you additional compensation for having a non compete.
I don't know a salesperson that had one that wasn't able to work around it and got sued. In CO they aren't enforceable and in CA I believe as well. My friends have gotten demand letters and that was it. One friend hired an attorney and the guy laughed in CO, it was so restrictive that it prevented him from making a living which makes them null and void.
If you have in-demand skills, you don't need to sign a non-compete. Or, strike the "two years" and replace with "six months" or even "three months" if you feel you are in control.
If they have another person lined up to take the job, you may lose out, though.
If you do sign a non-compete, NEVER mention it while applying for future jobs. I made two mistakes in the 90s -- first I signed a 2-year non-compete with Ajilon (a big New England contracting house), then I admitted it to other head hunters later and guess what -- it caused me to remain unemployed for many months, costing me a lot of money. Never again.
Let's all just not sign these onerous agreements. If no one signed them, they'd go away.
In Florida max for non compete was three years, I had a non compete for seven years but with a severance of 800k of which I could have skipped at the three year mark but worked in a related field but not sales of direct machines that they sold.
I was fine and still worked in the same sort of field.
They are quite common, but also difficult/impossible to enforce. Don't worry about signing one. They are limited in what they can enforce on you. THEY CANNOT STOP YOU FROM MAKING A LIVING. The example in MN, as it was explained to me in a state licensing class, said that "You can't leave and approach your old customers selling the same product." There was a relatively short time limit as well. Basically, you can't steal intellectual property, and you can't poach old customers for the same product in x amount of time. I've also signed one that said I wouldn't go into business for myself that would compete with the company while still working for the company. In my case, that meant I couldn't make a business of buying and selling cars. It was more designed for the mechanics; they didn't want them working for the store and fixing cars for profit on the side.
The rule of thumb, the more restrictive the less enforceable. Because the court looks at it and says you are preventing me from providing for my family.
I am an attorney who represents employees with noncompete agreements. I have seen a dramatic increase by companies using these contracts to prohibit former employees from taking jobs at competitors in their region. Noncompete contracts seem common in just about every industry - in the past year alone, I have reviewed noncompete agreements for piano teachers, investment managers, medical device salespersons, physicians, and accountants.
Depending on your state's law, the noncompete agreement may be overbroad and invalid. It is always a good idea to have your contract reviewed by attorney either before you take the job or before you decide to leave for a new company. For more information, visit http://www.virginianoncompete.com. Or if you have any questions, feel free to send me a message on the forums.
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