Talents want to be free. A case against non competes

by Startacus Admin

Serena Manzoli, ex lawyer, a startup person and founder at Wildcat, a free legal database for creatives and freelancers shares her thoughts and advice on non competition clauses...

Did you find a non competition clause in the last contract you signed?
I knew it.
It always happens to me and I’m really surprised when I see a contract that comes without non competes.

By the way, a non competition clause is a clause in which one party agrees not to enter into or start a similar profession or trade in competition against another party.

Being an ex lawyer and against any kind of over-lawyering, I’m a non compete hater by nature.

Non competes give you a proof of how wildly imaginative lawyers can be, especially in crafting horror stories. Indeed, how creative a lawyer should be to forbid a 19 years old to work for a university summer camp; or to prevent a hair stylist from hair-cutting; or a guy from spraying pesticides.

So I hate non competes: the first reason is ethical. You should never ever limit somebody’s freedom. If a top employee decides to quit his/her job and work for your competitor, that’s your fault. If a top designer take a job from your competitor after working for you, that’s her/his merit.
The second reason is economical: if you prevent people from working for someone else, you’re hampering competition and free flows of talents, and economic growth at last.

But let’s get back to the daily stuff. Let’s say that you are just a signature away from the job of your dreams, or, if you’re a freelancer, from the job that can pay this month’s bills. And then you see it: a creepy non compete clause that kindly asks you not to take any job for a competitor for a 6 months, one year time.

What’s a girl to do?

As always, bargain.
There’s a reason for a non compete to stay there? Try to put yourself in the other’s party shoes, but don’t overdo it. Why did they want you to sign it? Has your job such an inner value that can hurt them if you work for a competitor? Let’s say it has. You’re a top executive. Or, you’re a great designer with a neat, distinctive touch. Now, think: if you’re so good, they picked you because of that: your great ability, your great distinctive touch. Then think, if you’re so good, do you have the bargaining power not to sign it? Maybe you have, and they would accept to hire you even if you refuse to sign that non compete.
On the other hand, if you’re just average: why should they want you to sign it? It’s plenty of people like you, who cares if you go work for a competitor. Of course, there are a lot of grey areas between these two cases.
So if you can’t really get rid of the hateful non compete, at least limit it.

A few options to make it harmless:

Limit it geographically. Say, you agree not to work in an area of 5 km from the employer. Or, you agree not to work for a competitor whose commercial area is the same as your employer’s: for instance, the same country.

Limit its duration. It can’t last forever. The shorter the better. Also, how long can you afford to stay withouth a job?

Limit the industry. If your client-employer works in the fashion industry why should he limit you, if you want to work for the food industry? Activities are so specialized nowadays that it makes no sense to go for a broad definition of industry. Your employer/client is a startup which raises funds for musicians. Don’t sign a clause that prevents you from working for any fundraiser, but just for fundraisers in the music industry.

Limit the object. Let’s say they hired you to work on a particular project...like a website redesign. But you can do a bunch of different things, like designing logos, taking pictures and even making videos. Why should you sign a clause that prevents you from doing all of these things for a competitor, if I just hired you to design a website? Limit the non compete to ‘website redesign’. If at all.

A lot of things can be bargained, and arrogance always needs to stay out of a business relationship. Non competes are, often, a sign of arrogance. Try your best to take them out of your contract.

Serena Manzoli is an ex lawyer, a startup person and founder at Wildcat, a free legal database for creatives and freelancers. She also blogs at lawyersareboring.tumblr.com

Like this article? Why not check out some of Serena's previous posts such as:

NDA Tips for Startups

Designers: Some Tips for your Contracts

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Published on: 7th July 2014