Wednesday, 25 January 2017

To Sign or Not to Sign Non-compete or Non-disclosure Agreement in Contract Jobs?

A non-compete agreement is a agreement between you and your employer which stops you from engaging in similar business that competes with your present employer. There has been a growing pressure on employees for signing the non-compete agreement. However, for employers asking you to sign a non-compete or non-disclosure agreement is not a sign of mistrust; it's just a part of doing their business. 

By signing the Non disclosure Agreement, the prospective employees are made to promise not to indulge any sharing of information shared to them. The type if information covered here is virtually unlimited. This may include, test results, a list of customers, passwords, software, system specifications etc, Confidentiality agreements and NDAs are fairly common in most of the businesses these days. By this way, the business entities intend to keep their trade secrets and other confidential information protected. 

It's more than a new job issue for the employees right now. Some will be asked to even sign the non-compete agreements when they are getting a hike or a promotion. There has been growing demand for non-competes and are becoming a norm because more businesses are enforcing them, even for non-corporate or non-executive jobs like yoga instructor, office intern or security controller. A report from Wall Street Journal says that there has been a rise of 60% in terminating employees for not following NCA's or NDA's.

When is Non-Disclosure Agreement Used? 

One might be asked to sign an NDA in the following scenarios. To protect client and customer information, new product designs and drawings, sales and marketing plans, trade secrets and any other new inventions. If you are being asked to sign an NDA to keep your secrets in four walls, and if the information leaks, then companies are considering taking serious legal actions. In most cases, the employees should remember that there is no fault in signing NDA or Non-compete agreements as long as terms and conditions are properly understood.

When You Get a Job Offer and Non-compete together?

Do not sign on the offer right away if you get a non-compete agreement when you are offered a job, though you might be tempted to. Seek more time from the employer and ask for a copy of the agreement to review it in-order to think about the job offer and the joining date. Though, you might feel the pressure to sign the offer, please try to resist.

Generally, all Non Disclosure Agreements include few specific sections:
1. Definitions of confidential information.
2. Obligations from all involved people or parties.
3. Time periods.

It is always a good idea to fully understand each element before signing on the agreement.

When dealing with NCA's the candidate's response should not be a straight 'no', but should be well informed and reasonably justifiable. Some tech companies do have advisers who talk to the candidate's through it and have legal support in reviewing and advising the candidates on few situations. After it's discussed they get a tailored contract or agreement that works out to be better.

Considering these things would help when reviewing NDA or NCA's.

1. Definitions of confidential information provide the category of information that is covered by the information. Hence, the candidate should understand what specific information is governed, because the definition might some times have rules of the contract without having the precise information given. 
2. The time period is also mentioned commonly in the NDA's and sometimes it is not mentioned that how long this duration is. So, the candidate should negotiate on how long this period has to be.
3. NDA makes you not to disclose any of companies trade secrets or important information. It does not allow you or encourages you to any other person breach the contract by any improper ways of accessing important information. Hence it is important to understand what exactly constitutes a breach. For a typical designer of a company, if he leaves a prototype of gadget at a public place would be a breach of the agreement.

Negotiating Your Contract:

A contract involves both the parties. As an employee, you can sit and negotiate with your employer and ask who prepared the agreement and what the company's real concerns are? You can suggest that you can sign the agreement without the inclusion of demographic location, if you find the location mentioned is too big. You can also ask to shorten the contract, arguing that in the case of a loan, you would not be able to sustain if the contract is imbibed on him if he is layed off. You can as well ask them to add a statement saying that the contract would not apply if they lay them off themselves without your fault.

You can also ask for assurance in the document that as and when you gain experience and tenure you would be given hike and promotion so that you would not be stuck at the entry level trapped by a non-competent. 

When to consult an attorney:  It's always better to get legal advise when you are being asked to sign the non-compete agreement during lay off or if the company is imposing severe NCA when terminating. Also consider contacting a lawyer, when you are asked to sign NCA  when offered a promotion. It is worth in such cases to take a copy home and discuss with your attorney before you sign them. 

How to find a Non-compete Lawyer: Select a lawyer who is an expert in Non-compete agreements. Check out how much fee you can afford and normally the fees at the local legal clinic would be at the least. You can also browse by state or if you are browsing by city, county and metro locations. Normally a figure of $300-$500 is what a lawyer charges for consultation for one to two hours, with a slight variations either side. 

The Key Point: 
The bottom line is, the non-compete can become a cause of concern as it is a case of litigation against you. It depends more on the level of career tenure you are, though the beginner can be restricted to work or chose his next job if he signs a broad and binding document. Hence, it is advisable to always negotiate it and narrow it down as much as possible before signing the dotted line. Middle level and high level professionals can afford and sit with a lawyer to customize the terms and agreements so that it will not burden them in the future. The point overall is that one must understand the agreement properly and should negotiate on it and narrow it down and customize it as much as possible so that it would not effect their future career. 

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