Outrageous non-compete clause

Elvis_Presley

I've been in Paris for the last 6 months working for a start-up software company. I finally got my permanent contract today(on a short term contract til now), having been sent a draft earlier in the week. The draft had standard non-disclosure and non-compete clauses.

However today when I went to sign the contract, my boss told me that another clause had been added to the non-compete:

At the end of the contract, whatever the reason for departure and no matter who ends the contract, (poorly translated by me) Mr Elvis Presley is prohibited from competing in the domain of activity of the company consisting of: the creation and implementation of software for parallel programming, software development, audit, advice and expertise in computer programs and in the rapid solution of numerical calculation for two years. Valid in France and UK (Not sure why he didn't put Ireland here, maybe he's not aware of the booming IT industry)

My take is that this covers all forms of software development. If they choose to invoke this clause, they must pay me 40% of my final salary for the two years.

Needless to say, I refused to sign this contract. We eventually agreed to change it to "analysis and optimisation of software". This is my first job out college, having never signed a work contract before. Is a clause like this normal? Has anyone encountered anything like this? Is it even enforceable?

Manach

Not legal advice, but AFAIK non-competes have a limited effect. In that they must be really specific about what particular area the non-compete applies to. For example, if the firm was very focused in industrial area XYZ and there was a limited client base within a narrow geographical area and for a 6 month period- then that might be okay.
However, to say " all forms of software development" in such a contract bumps into the European concept of proportality and the UK concept of equity and basic fairness. In that it denies the worker an ability to make a living from his/her skillset.
Thus, key to get proper legal advice but IMHO this non-compete is far too broad to be effective.

Tar.Aldarion

I'm pretty sure that it doesn't matter what it says, it wouldn't hold up. AFAIK our legal counsel said that.

ChRoMe

These are always complete nonsense and completely unenforceable.

Talisman

If you sign the contract and get a promotion / change of job title, the terms of the original contract become unenforceable - There's a ruling by the High Court in the UK that supports this.

The 24 month period will also prove unenforceable because it goes further than necessary to protect the employer's interests while damaging the career of the employee.

Elvis_Presley

I've been reading up on this and everything I read echos what people here are saying, that its unenforceable. Thanks for your responses. I also doubt they would be keen to pay 40% of my salary for two years.

Smoggy

It should be more than 40%. If they want to block moving jobs within dev, I would want over 100%.

mneylon

Non-competes need to be very narrow and not disrupt your ability to earn a living.
So while it's quite normal for an employer to stop you from stealing clients or staff, they can't stop you from doing what you do for a living.

Also, French labour law is very strong and gives employees a lot more power than Irish labour law, so I'd wonder how legal this would be in France ..

Raging_Ninja

Get a legal opinion on this, don't base your decision on what random people say on the internet.

The Corinthian

Such clauses are typically a bad sign on several levels.

Firstly they're amateurish, in that they're often unenforceable as they effectively demand that a former employee remain unemployed, or change career, which simply would not stand up in court (especially a French one, as Blacknight points out).

And secondly, they betray a level of misguided paranoia on the part of the company that is unlikely to be limited to demanding such a clause, in the future.

Non-compete clauses need to be very narrow (specifically citing things like working for direct competitors) to have any legal strength. Alternatively, companies can instead protect their IP in terms of your future use of design patterns or processes. But a blanket ban on working in your chosen industry? Muppets, TBH.

I've been handed a few of these clauses in the past to sign and always refused and I've never suffered any consequences for it. I suspect because the company is aware that they're on shaky ground and the clause is only a scare tactic of sorts. This is why most contracts include a caveat clause stating that if any part of the contract is found to be illegal or non-binding, it will not invalidate the rest of the contract.

beauf

Elvis_Presley wrote: »

.... "analysis and optimisation of software"...

I wouldn't have agreed to that either.

Why would anyone agree to any of this?

yop

I had a company who put in a 3 year non compete clause! Was funny God bless them.

dazberry

I received a contract including a clause that stated if I "poached" any existing staff of the company within 2 years I would be liable to a fine of IR£250k per poach-ee. Needless to sign I didn't sign and walked away. From what I heard afterwards - it was a lucky escape...

D.

PrzemoF

(not a serious advice, but considering the changes between the draft and the final version...): 1. get the contract
2. make changes you want, but make sure it looks similar to the original version
3. print 2 copies
4. sign and handle back