Interns' Job Prospects Constrained By Noncompete Agreements (wsj.com) 179
Internships have long been an opportunity for inexperienced workers to try out different industries and build valuable contacts. For companies, it is a way to attract future talent. But increasingly interns are being asked to sign noncompete, nondisclosure and forced arbitration agreements, restrictions once reserved for higher-ranking employees [Editor's note: the link may be paywalled]. From a report: Advocates say legal covenants for interns help safeguard trade secrets such as customer lists in an era when it is easy to download information and share it, for instance on social media or with a competitor. But critics argue the agreements hamper young people's job opportunities and mobility even before they get a foot on the career ladder. [...] Ms. Dunne's [anecdote in the story] noncompete agreement stated that she couldn't work for a competitor in software or banking within 15 miles of Wilmington for a year after leaving TekMountain. Ms. Dunne said she was given the agreement on her first day. "I had no idea what I signed, they didn't explain it to me."
After leaving TekMountain, she did a separate three-month internship with nCino, a financial technology company in Wilmington. In a May 7 letter, TekMountain's parent, CastleBranch, laid out her obligations under the noncompete agreement, described the confidentiality of its proprietary information as "very serious," and asked for details about her relationship with nCino. Ms. Dunne said she didn't respond. The noncompete "eliminated a good portion of the companies in town in the industry I wanted to be in," said Ms. Dunne, who is relocating to the Washington, D.C., area for a new job. "I have to leave all of my friends behind and start over."
After leaving TekMountain, she did a separate three-month internship with nCino, a financial technology company in Wilmington. In a May 7 letter, TekMountain's parent, CastleBranch, laid out her obligations under the noncompete agreement, described the confidentiality of its proprietary information as "very serious," and asked for details about her relationship with nCino. Ms. Dunne said she didn't respond. The noncompete "eliminated a good portion of the companies in town in the industry I wanted to be in," said Ms. Dunne, who is relocating to the Washington, D.C., area for a new job. "I have to leave all of my friends behind and start over."
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I had a one year do not compete clause coming out of the 2008 recession after I lost my previous job. The company did not interview me, their customer did. The company did not provide a computer or any hardware, the customer did. The company provided no training for the job, their customer did. The company only provided a desk in the same building their customer owned. Yet the DNC pretty much stated I couldn't do any work for that customer even if I never had any interaction with the group I might go o
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That's pretty standard for staffing services companies, otherwise the company could simply trial and hire the staffers at a sub
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That's pretty standard for staffing services companies, otherwise the company could simply trial and hire the staffers at a substantially lower rate than they would have to pay a headhunter.
You could have worked at any other business, in the same industry, and in essentially the same location. That is virtually a non-non-compete.
And it's on the customer company for not negotiating their contract that way if that's what they wanted to do. My company has a staffing arm and we do contract-to-hire deals all the time. I did consulting work for another company, massive consumer products company, that had right to hire built into their contracts for all of their contractors.
Even when there is a no-poaching agreement, it can usually be negotiated around if the company really wants to. I've had colleagues go to work for customers they con
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That's pretty standard for staffing services companies, otherwise the company could simply trial and hire the staffers at a substantially lower rate than they would have to pay a headhunter.
You could have worked at any other business, in the same industry, and in essentially the same location. That is virtually a non-non-compete.
No other businesses in the same industry within 50 miles of my location, other than the one that had to let me go because the '08 crash hit them hard. I get it, since they actually provide no value, they have to use legal protection to keep their company going. The only problem I had was part of the contract said that any pay changes had to be negotiated by both parties, within a month after I was hired they gave everyone a 5(10?)% across the board pay cut, no advanced notice. This part of the contract p
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No other businesses in the same industry within 50 miles of my location, other than the one that had to let me go because the '08 crash hit them hard. I get it, since they actually provide no value, they have to use legal protection to keep their company going. The only problem I had was part of the contract said that any pay changes had to be negotiated by both parties, within a month after I was hired they gave everyone a 5(10?)% across the board pay cut, no advanced notice. This part of the contract pretty much got ignored.
Hope you learned your lesson there to not live in a one-employer (for you) town.
Born, raised and educated... other industries exist but this one employees the most and once developing software here, getting into other industries becomes more difficult, at least in my experience.
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Knowing that, why did you sign the agreement?
Why didn't you just go directly to the company and get a job (it's not like it was hard to find the only other company within 50 miles who does the one thing you appear to be qualified for)?
If you were valuable to the client company, why didn't you go to them and convince them that if they didn't "buy-out" your "contract" with the staffing company, you would leave anyway and they would have to go thorough other experimental contractors, train them etc. and be unlikely to find someone as awesome as you. Some staffing contracts I've been involved with included explicit "buyout" terms for a worker (usually expensive of course) and even for those that don't, we've always been able to negotiate something when we thought it was really valuable for us to take a contractor direct.
Of course, for a low skill menial jobs, it's not worth it for the client company to exercise (or negotiate in) that option. Sure, it's nice to have the person in HR who takes badge pictures and gives you the "Welcome" folder and escorts you to the orientation room to be a pleasant, friendly person. But it's easy to keep trying people until the staffing company sends you one that competent, friendly, and pleasant -- you don't have to run ads, interview people, do background checks, get stuck with COBRA, etc.
BTW, always make sure to reject workers from staffing companies that are not excellent matches -- that way you train the staffing company to send you their top people, not their bottom of the barrel people. That's one advantage of using staffing companies, they will send you another person with little effort on your part -- when you go to the trouble of going through the hiring process for a direct employee and are facing repeating that (and, possibly, getting hit with bogus "gender", "race", "religion", "special snowflake" discrimination lawsuits when firing them), it's too tempting to keep a mediocre hire around even though you wish you had never hired them. Not nearly so much so with staffing companies. I've hired a few "mistakes" over the years where I figured out the mistake I'd made within a couple of weeks (sometimes less) but in all cases, I ended up putting up with the mistake for at least three months, sometimes more. On rare occasions I myself have used a staffing company, such people were gone the moment I realized that they were unlikely to work out.
After being unemployed for a couple months, I had lost my patience for not getting a paycheck so did things I probably should not have, plus was young and didn't consider the impact and true scope of a DNC. I didn't know about the other company at the time so that wasn't an option. My manager (at the customer company, the contract company had HR and headhunters, management wouldn't improve profit) had me at the top of the list to be hired on full time for over six months when I left the company, within th
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This is really between the staffing firm and the company. It's most typical that an agreement exists that says the company can't poach (or hire from a different staffing firm) a contractor, without paying some kind of commission or fee.
The fact that you had such an NDA is terrible.
Re: What's a no compete? (Score:2)
I had the same situation in 1979. The solution was the company that wanted me to work directly for them bought out the contract. So no problem.
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Neither did I, then again, they're practically illegal where I live so...
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Practically illegal is how they are most everywhere, unless there's a lot of money in the outcome. I've personally seen 2 instances of this playing out:
1) Employee left and went to work for a direct competitor 30 minutes away, one town over.
2) Employee left and started his own business directly competing with former company 75 minutes away, a few towns over.
Both went to court, both were tossed out of court. There are simply to many reasons that a person should be able to work, and sometimes a person's ski
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Practically illegal is how they are most everywhere, unless there's a lot of money in the outcome.
A lot depends on how recently the laws, and individual non-competes, were updated. Some states have made them more enforceable in the name of "ensuring business can compete..." Sort of like fucking increases virginity....
One company I worked for had a non-compete that actually was a non solicit agreement, meaning I could not solicit business from any clients for a year. According to my lawyer, I could, if I wanted, give my customer list to a new employer, or even talk to a customer who called me first, and
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I mean, this is an old joke, but do you have another proposal for making new virgins?
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I've never signed one, except in hourly consulting to not poach clients.
Where do you live? Non-compete agreements are mostly unenforceable in California.
California has the biggest and most successful tech sector in the world, and the absence of non-competes is one of the reasons for that success. It makes it easier for talent and ideas to spread, which is good for both employees and companies.
Non-competes are a prisoner's dilemma [wikipedia.org]. They may be in the narrow self-interest of an individual company, but everyone is better off if they are banned.
We need a workers rights movement (Score:5, Insightful)
When are we going to say enough's enough?
Re:No. We need better schools. Read your contracts (Score:5, Interesting)
Exactly, the employers unionize in the form of "standard industry practices."
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This plays right into the hands of tech companies. Turn them down and they can say "See we can't find US workers, we need more visa workers". Drives down wages and ultimately is bad for our country when we can't develop technical talent.
Pretty much the only answer here is for laws to be in place to protect us. Well there is one other solution, and I'm not a fan of it. Unions.
Why not Unions? (Score:2)
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"Learn to walk away, folks."
To where exactly? They all have the same requirements.
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Middle America is right. The rural midwest is where I came from. They absolutely do owe me. I'm the one who builds the technology to power their toys and has the ideas they profit from and savvy to gather those profits. All they do is sit back and tax the efforts of me and my peers. People like me do all the firefighting, educating, defending, etc.
We are the working class and they owe us everything they have.
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"About half of them are "I've never seen a non-complete clause"."
Then they aren't working in technology, aren't high end enough for one, or just don't actually read all that garbage they sign when taking a new position. It isn't like they add some special fanfare or singled out it is just dumped in with all the other paperwork.
Call it an anecdote if you want but every employer I've worked for in the past 10 years has been fortune 500 and every single one has wanted a confidentiality and non-compete agreemen
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Yeah, sure, walk away if you can. But when all internships have the same clause then where do you walk? I'm not a socialist but "The capitalist can live longer without the worker than can the worker without food." does have merit.
This is exactly why collective bargaining exists. If all prospective empoyees could refuse work in any cicumstance, then there would be no need for unions or collective bargaining. But this isn't the case and that's why employers work to break up all forms of unionization efforts.
It's about unequal bargaining positions (Score:2)
Companies are people; literally, they are just groups of people.
A large group of people that hires an individual person usually has a much stronger bargaining position than said individual person. What are individual people selling their labor expected to do in order to discourage abuse of this bargaining position by a large group of people?
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Nobody owes you anything. Be useful to others, or go away.
Would you extend this to "Nobody owes you even the necessities to remain alive, such as food and water, and the necessities to remain not arrested, such as clothing and shelter"? Clothing is a necessity under the indecent exposure law, and shelter is a necessity under sit-lie ordinances.
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You can of course not sign the contract. It's your own free decision whether you want to work or whether you want to starve.
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Its funny you complain about SF as non-competes are illegal and unenforcable in California.
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Having options is what matters here. Because if there's like 100 people lining up for the job, you can read the contract all you want but as soon as you start with "But..." you get a "NEXT!" yelled into your face before you're done even voicing your concern.
Re: No. We need better schools. Read your contract (Score:2)
Nobody is being oppressed
Of course they are, you stupid fuck; to suggest otherwise is to imply that these companies aren't getting their money's worth when it comes to their legal expenses.
The numbers suggest otherwise... and did I mention that you're a stupid fuck??
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Walking away sounds wise, until you realize that not everyone can do that. You need money to survive. So you suck it up just to get your foot in the door and avoid that fast food career fallback. Once you've got experience then it's a lot easier to be picky, but when you've not gotten past 10 interviews with any luck and then finally there's a job offer, most sane people are going to take the job so that they can start paying some bills.
These sorts of contracts feel coerced to me, because there's immense
No we don't (Score:2)
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Which media personality said this?
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So many as to make it common knowledge. Have you been on Twitter? They hate our fucking guts. It's the old "nobles vs. peasants", all over again.
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This!
As i read this, clearly it is based on issues in the US. Most countries dont really enforce DNC's as it impacts others ability to earn a living and often offers no compensation.
If you want to have a "do not compete" for a year after you fire someone, pay for the year...
The US legal system needs a wholesale review.
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The US legal system is not consistent between states, some allow non compete clauses while others do not. Typically clauses like this are put into a contract to scare employees, even if they cannot actually be enforced they know that a significant proportion of employees will not be aware of their legal rights and will obey the contract terms when they don't have to.
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Agree with everything you posted.. Again, this is why they need some reforms. The problem is the individual states will claim they have "jurisdiction" and the federal government is "encroaching".
So you end up with the current mess. Federal laws which are not well known, state laws which may not be enforceful, but are communicated to the employees.
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If you want to have a "do not compete" for a year after you fire someone, pay for the year...
IIRC the CA bill on non-competes says something to this effect. That straight up no competes are illegal and if you want to prevent someone from working in the industry you are obligated to pay their wage for that period of time.
crap access management (Score:5, Interesting)
WFT is anyone doing giving interns access to sensitive company secrets?
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Of course. The biggest secret in most of these companies is how fly-by-night they actually are and how fast and loose they are playing with their obligations. No organization wants it getting out.
Everyone requires non-competes but the counterbalance has always been that they are very rarely enforced. If you work for company A on a special whatchamacallit and go over to a direct competitor who suddenly gains advances that look just like company A or if you steal company A's business model wholesale maybe but
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C'mon, nobody gives an intern access to critical information. But that way you have the intern under your thumb (more than you already do).
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Nobody. This is just a full employment program for company lawyers.
Using them as unpaid employees (Score:2)
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WFT is anyone doing giving interns access to sensitive company secrets?
Shit happens. Many years ago me and a friend was writing the thesis for our master's degree and we were working with this company analyzing the impact of macro-economic conditions for this particular line of business. This is obviously not something you can change on a whim and you really don't want to give your competitors a detailed cost breakdown so we already had some sort of confidentiality agreement in place but they still weren't planning to give two random students that much detail. So we got this E
Doesn't feel like a good example (Score:2)
Comment removed (Score:5, Interesting)
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Language in the non-compete doesn't matter (Score:5, Insightful)
The terms were that at the non-compete would be selectively enforced, at the discretion of my previous employer, and if so elected I would be paid 110% of the offered salary, for the remainder of the term. I would need to tell my former employer about all job offers, including the salary. This sounded fair to me at the time, so I signed.
Turned out, all prospective employers that I interviewed with specifically asked about pending non-compete agreements and did not care a damn about the details. The mere presence of a non-compete amounted to a blacklist.
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I'm a research chemist in the semiconductor field.
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As far as the law aspect - I'm quite disillusioned WRT the idea that the law will protect individual workers. In some states there are protections with teeth, but for most, it's a David verses Goliath situation.
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Non-Competes, unfortunately, *have* teeth. Corporations have big legal teams and even if you're right, they can give you so much grief you'll wish you were dead. They know that to fight them in court you have to pay a lawyer, and yes the law is technically on your side, but they can stall and bid for time until kingdom come, while you spend all your resources on a legal cause. If you're not bankrupted by the time you have a court decision, they will appeal and you will have to pour more money you don't have
Nobody is forcing you to sign anything (Score:1)
Don't sign it, or cross out the objectionable parts and initialize them and when you hand in the paperwork, let them know what you did. If they say something like everyone has to sign it or nobody has ever crossed that out before, they are most likely lying, or they are only hiring poor quality lazy employees, in which case reverse turn and exit out the door and don't look back.
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or cross out the objectionable parts and initialize them and when you hand in the paperwork, let them know what you did.
It doesn't work that way. All line outs have to be reviewed and initialed by all parties to the contract. Just getting them to sign on the end after "telling them what you did" isn't going to hold up. Process needs to work like this: 1) Line out/update what you object to, date and initial all edits. 2) Other parties do the same. 3) Everybody signs the agreement. 4) All parties get a copy of the completed document.
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They are when literally every employer requires non-compete clauses in their contracts.
"Sign this (or something nearly identical to it) or never work in your field again" is not exactly a "you aren't forced to sign this!!" situation.
noncompete are very limited in California (Score:3)
noncompete are very limited in California
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Constitutionality wouldn't have an effect on CA's law. CA's law says, more-or-less, "You can have a non-compete, you just have to pay them while they aren't competing".
So having that non-compete ruled constitutional wouldn't do anything....it would still have to have the clauses required by CA law.
A SCOTUS ruling that CA's law is unconstitutional would be a problem, but it would take some major legal hoop jumping for that to happen - regulating commerce is one of the primary functions of government, and th
So, RI not F any longer? (Score:4, Interesting)
I had no idea what I signed, they didn't explain it to me.
Really? FTLOG, do people now just sign legal documents without at least reading them?
m
In this job market yes (Score:2)
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Really? FTLOG, do people now just sign legal documents without at least reading them?
It's impossible to understand most legal documents in the USA - and you are kidding yourself if you think otherwise.
US federal, state, and local law is full of contradictions, thanks to the inability of the US legal profession to be ethical.
For example, the highest law in the land says Congress shall pass 'no law' infringing freedom of speech or the press - and yet there are many such laws. None of those laws are necessarily - every situation that requires limiting speech could be handled through appropria
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choice is to either accept the effectively unknowable terms for employement, or a mortgage, or necessary service, or you can go starve.
FTFY.
Can't get that mortgage/rent/etc without signing the book, so you've got no home to go to. Nor income to feed yourself.
How do they know where you work? (Score:2)
This is why you don't update social media with your work life. You also need to go through your friend or contacts list regularly in places like LinkedIn and prune out deadwood.
I've had former supervisors and company owners reach out to me and mention, "Hey, we noticed you haven't updated your current employer. Where are you working now?". They don't do that out of the goodness of their hearts.
Debatable (Score:1)
Evidently no one is allowed to joke about it, eh? (Score:2)
What this story reminded me of was a recent experience of being expected to sign an NDA before the first job interview. Amazon apparently feels it is a reasonable part of the hiring process. Just one more step to make sure that you'll be a good little wage slave, a docile and dehumanized cog in the soulless machine. Signing an NCA is just an obvious next step (but also nice "insurance" for Amazon's monopoly).
Not sure how to best describe the dehumanizing advantage from the perspective of the corporate cance
Interns are there to learn (Score:2)
1) They get paid with XP rather than $. The whole idea is to teach them things. Asking them not to use what you teach is literally stealing their pay.
2) Interns are broke. You can't get any money if they violate the agreement and you sue
3) If you teach an intern or even allow them access to real corporate secrets, you will be bankrupt within a year. Because it means you are an incompetent moron who can't run a business.
This is simply vile anti-capitalist behaviour. Capitalism is not "businesses ha
Sign it, then proceed to largely ignore it (Score:2)
Unless you start giving out company secrets, there's absolutely no reason that your former employer has any right to know where else you find work after you leave them.
Do respect non disclosures, but noncompetes are nothing more than security blankets for people who think that the only value their employees can possibly offer to another company must come directly from his knowledge and experience with their own company's inner workings.
Don't Worry About It (Score:1)
Relatively unenforcable (Score:1)