IT Leaders Want To Know About : Non-compete Clauses

by drjim on June 4, 2009

Noncompete Clauses Can Be A Hassle For IT Leaders

Non-compete Clauses Can Be A Hassle For IT Leaders

(Hopefully it goes without saying that I’m not a lawyer and this blog posting is in no way to be considered legal advice. If you’ve got further questions, go get yourself the best lawyer your money can buy…)

Did you even know that something called an “Non-compete Clause” existed? It turns out that you may have signed one when you started your current job (it differs from company to company). This piece of paper basically spells out the legal agreement between you and the company – they want you to stay and they want to scare you into not leaving.

What Is In A Non-Compete Clause?

Willie Jones over at the IEEE’s Spectrum magazine has been doing some digging on just what non-compete clauses mean. Non-clauses were invented in order to protect a company’s intellectual property. Basically they don’t want employees leaving and divulging trade secrets to their competition.

Once again, this is going to differ from company to company. A non-compete clause generally has 3 basic types of limitations built into it: geographical, time, or line of business.

How Do Courts Feel About Non-compete Clauses?

You would think that once you have signed one of these things, that’s it, right? Well, not really. Courts take a hard look at such contracts. In each case when there is an issue, the courts try to balance the issue of trade secrets being divulged to a competitor against an employee’s basic right to work. Courts try to make sure that a non-compete clause does not place an unreasonable restriction on a worker’s ability to earn a living.

If a court does find that you signed a non-compete clause that was too restrictive, then they can void the clause – you are free! Note that where the case is being heard is important – in California, courts often refuse to enforce such agreements.

What This All Means To You

If you decide to leave your IT job and you’ve signed a non-compete clause you need to be aware of what the ramifications may be. If you go work for a firm that is competing with your current employer and you are going to be doing the same sort of job, then there is a good chance your old employer will go to court to stop you from working for the new company.

How successful they will be is unclear before the trial. A lot depends on what state this is taking place in and just how restrictive the non-complete clause that you signed was. Once final point to consider is that when push comes to shove, your old employer may not want to risk having its trade secrets come out during a lengthy trial. These are all things to consider carefully as you work to transform yourself from an IT manager into a true leader.

Questions For You

Do you know if you signed a non-compete clause when you started your current job? How restrictive is it? What does your company do when someone leaves to go work for the competition? Leave me a comment and let me know what you are thinking.

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What We’ll Be Talking About Next Time

I bumped into one of my longtime friends last week, Mark, and he told me how unhappy he was at his IT job. He was feeling a great deal of guilt over this because his firm had just had yet another round of layoffs and he had been spared. He still had his job, but he hated it. What’s an IT Leader to do in this situation?

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