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Should you sign an NCA? Not so fast!

Quick Question

sign-thisI was offered a job with a small tech company. The NCA that they asked me to sign was so broad that it would have prevented me from taking a job with any other company writing embedded software. When I balked at signing it, they told me I would have to talk to to someone in their legal department.

I walked into their lawyer’s office and explained my objections. His reply: “If I were in your position, I wouldn’t sign that either. Let’s strike out the paragraphs you object to.” What do you think of that?

Nick’s Quick Advice

This is an instructive story about NCAs (non-compete agreements). Thanks for sharing it. It’s also a good lesson about negotiating job offers. It’s not just about the money!

People don’t always believe me when I tell them NCAs (and NDAs, or non-disclosure agreements) are very often negotiable, mainly because they’re ridiculous, and the legal people who write them know it.

These employers figure no one would question or refuse to sign “a necessary legal document” — especially when a new job hinges on it. And most job applicants wouldn’t dare. The lawyers go overboard and include terms and restrictions “just because they can.”

It makes you wonder how many people before you signed that thing simply because they felt intimidated.

I’d love to ask that lawyer whether he thinks it’s ethical for his company to keep using that document, and whether — now that he’s acknowledged how ridiculous it is — he’ll cancel NCAs that other employees have signed and produce a more reasonable agreement.

Or maybe the employer should just fire the lawyer who wrote it and behave more responsibly toward its employees and the people it’s trying to recruit.

I won’t even get into my opinion of an employer that can’t explain an obligation it wants a job candidate to sign — without sending you to its lawyer!

For more about NCAs, see How can I negotiate an NCA or NDA?

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4 Comments
  1. Nick – I suggest that the OP call or search through their state Attorney General Office on this issue. NY’s AG published this news release on successfully fighitng Law360 on the requirement of a NCA for- get this – editorial staff: http://www.ag.ny.gov/press-release/ag-schneiderman-announces-settlement-major-legal-news-website-law360-stop-using-non

    Right at the bottom of the release it states: “Employees who believe they are subject to an unlawful non-compete agreement are encouraged to contact the New York Attorney General’s office at 212.416.8700 or noncompete@ag.ny.gov with questions or concerns.”

  2. In Canada, unless the NCA is restricted in Geography and scope to cover only the minimum needed by the employer to protect their interests its unlikely to be enforced. These agreements are restraints on trade and usually viewed as against the public interest.

    I think in many cases NCAs are meant to intimidate employees into staying.

    Non-solicit agreements and Intellectual property clauses are also terms that should closely be examined when signing employment agreements. Nick didn’t get into these in this post but they can impact future opportunities as seriously as an NCA.

    • Michael: In the U.S., many states prohibit NCAs. They are unenforceable.

      Thanks for bringing up non-solicit and IP clauses. Especially in the case of IP, a prospective employee should have a lawyer review the docs. People tend to fear legal fees, but the price of an IP constraint can be far more expensive.

  3. I worked as a contractor at microsoft. I just edited the document to my satisfaction, signed it and returned it. I was a technical writer. I struck out all language giving microsoft intellectual property rights to any software or ideas I might come up with. Signed it and returned it. No one seemed to care. It’s easier to ask forgiveness than to ask permission. Own your career.

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