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I was recently offered my first position as a junior web developer and was simultaneously notified that I would need to sign an NCC. After some research, I'm starting to feel skeptical about the position (plus it was through Craigslist) and some articles that I have been reading think that it is morally wrong.

I realize that I will now need to make a great deal of effort to flesh out every detail in this contract, regarding the length of time, method of termination, geographic range, but I am also worried that this may be a complete scam with some ridiculous fine print clauses somewhere in there causing me to become responsible for their bankrupt business or legal fees or something?

I am planning to take a copy of the contract home and review it first before signing anything, but I would like to know how common are these Non-compete clause contracts are (especially for a first-timer like me)? And what types of precautions should I take or be aware of before I do anything.

From BC, Canada.

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Not all non-compete clauses are the same. They can range from completely reasonable precautions to bordering on legally enforced slavery.

Things you need to look at:

  • How long does the non-compete restriction apply? Does it still apply after you fired the client or the client fired you?
  • To which kinds of activity does the restriction apply? Just web development or any kind of work?
  • To which business partners does it apply? Just direct competition of the client or anyone?
  • Is there a way to get out of the non-compete? What does the contract says happens when you break the non-compete clause?

By the way: when you are supposed to be a contractor and the non-compete agreement is written in a way which makes it practically impossible for you to take any work at all from anyone except the client, then the contract might fulfill the condition for misclassifying an employee as an independent contractor in some jurisdictions which is illegal (usually only for the employer, not the employee).

  • This is exactly what I'm worried about, I am going to make sure that I get the answers to these questions. And it wouldn't be unreasonable for me to request changes to anything that see as unfair right? Do you know what is the average or common length of an NCC usually? I don't see myself wanting to bind myself to a company that I've never worked for before and stuck at the same wage for more than 1 year? – SuperVeetz Sep 27 '15 at 18:11
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Non-compete clauses are very common in professional contracts. They serve to protect the legitimate business interests. Non-complete clauses can be overturned if they are excessive - too great of a geographical range, or too long of a time period.

It's difficult to say what may be in the contract, though. You should read your employment contract in its entirety, and if you are unsure of anything, contact an employment lawyer to have them explain to you the legal effect of entering into the contract.

  • Appreciate the answer, I guess I will have to wait and see what his terms and conditions will be. Is it common for the employee to request changes to the NCC? For example, "50 cent raise every 3 months for first year"? – SuperVeetz Sep 27 '15 at 7:26
  • I think you might be confusing some of the terminology. A non-compete clause is generally part of an employment contract. You would not usually find salary terms within the non-compete clause, but you may find it elsewhere in the employment contract (or possibly a schedule to the contract). Salary negotiations are quite common. – jimsug Sep 27 '15 at 7:35
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A non-compete clause may make it impossible for you to work for someone who competes with the company that is trying to hire you. As a junior web developer, there is very, very little legitimate reason to ask you to sign a non-compete clause. Frankly, junior web developers are a dime a dozen, and if Joe's furniture shop hires you to develop their website, there is very little business reason why they would want to prevent you from developing Jim's furniture shop's website when Jim has the choice of another dozen developers. The only reason for a non-compete clause would be to blackmail you or to retaliate against you.

But there don't really need to "make a great deal of effort to flesh out" every detail. They give you the contract, you tell them that you see no reason to sign a non-compete clause, you strike it out and initial it, and hand the contract back. Importantly, you do that with visible confidence. That's it. Their choice to hire someone else or to agree. If they ask why, you tell them that you don't see why they would need that non-compete clause, and to you it would be unacceptable.

  • one should also consider the likelihood that an employer would actually pursue an employee under an NCC. For a junior web developer, who may have little or no exposure to the company's trade secrets, the likelihood is low. Another question is whether the first employer will even find out that the employer is working for a competitor. Again, for a junior employee, it seems unlikely. On the other hand, if one gives trade secrets to the new employer, the old one is more likely to notice, investigate, and go after the employee. – phoog Sep 27 '15 at 16:50
  • Non-compete clause has nothing to do with trade secrets. Passing on trade secrets is a criminal offence. And I have seen non-compete clauses pursued for no other reason than to harrass an ex-employee. If there is no rational reason to include a non-compete agreement in a contract, then the company owner will need no rational reason to enforce it at your cost. – gnasher729 Sep 27 '15 at 20:27

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