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peter_b

Partner agreement question.

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peter_b    200
I have a question concerning our "Partner agreement". We are currently in a state of starting a very promising gamedev company. I am one of the founders and will have a equal stock share with the rest of the founders. However, in our "Partner agreement", dont know if that is the correct english term. But its the legal document that descides what to do if someone of us dies, or we have a legal disagreement and stuff like that. The other partys want us all to be denied the right to work on any other game development at all. So im asking, is this sane to ask someone to agree to? I have been working on an other project (alone), which i belive could be a commercial viable product in a year or two maybe. So that would mean i would have to start my own company then. And since i live for programming, i am sickend by the tought of giving up my right to work on my own projects and be locked to the projects of this company only for many years to come. Surley there must be programmers who are both emplyed by a gamedev company (and maybe even a partner owner), and still have their own company that they work with on their spare time? If not, what solution could there be to this? I have no intention to decieve anyone, like using their code or art assets or stuff like that. I dont know if this is the main reason why they opt for this. But for me to agreeing to let any parts reviewing my code would not be a problem at all. Could that be an option? Thanks in advance.

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Dogs    265
Are you saying that if you will never be able to leave the company and work for another game developer? That would be insane, and there's no way you should sign a contract with such a clause in it. If you're going to be a partner in the company, you must talk to the other parties and address any concerns they may have; if you can't agree something reasonable then perhaps they aren't the right people to be setting up a business with...

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frob    44904
Hire a lawyer for yourself.

If it's going to be a commercial success it will be nice to know that what you THINK the agreement means is also what it LEGALLY means. You'll probably end up with more money than the cost of the lawyer.

If it's a commercial failure, you will need to know that you aren't going to give up your left arm just because you signed a stupid legal contract. You'll probably end up losing less money than the cost of the lawyer.

Either way, it's going to be a net gain to get solid legal advice.

I'm more than willing to sign short term non-compete agreements as part of employment, but I'm firmly against any stronger agreements for game programmers. Generally moving from one game company to another doesn't fit non-compete clauses and won't be an issue. Stronger agreements are generally used when a person has a high profile and simply being employed there is an advertizing asset.

frob.

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Xipe    140
Such clauses are fairly common in all employment/partner contracts, but they're usually time restrained. Like myself worked at a large games and betting company (online casinos and stuff) and part of the contract was that if I quit or was fired I couldn't work at any company in that market for 1 years time - I could also not work on any other commercial games and betting solutions while I was employed.

That seems fair to me. Do you think Microsoft employees should be able to work for Sun Microsystems at the same time? Or get knowledge and experience of a new revolutionary filesystem that cost the company millions to develop and then quit and sell that information to a competitor or start a company of ones own based on this technology? Then why should you have this cop-out in the contract, when the rest of your partners put everything they have into the success of the company?

You can't have the cake and eat it at the same time. Commit or quit.

I think you should a) think this over, b) have a chat with a lawyer, and c) also a chat with your partners - for you not to be able to do non-commercial stuff on your own time is bullshit (if your contract says anything like that - Google thrives on giving their employees free hands). Commercial stuff however I can see a point in denying partners to work on.

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frob    44904
Quote:
Original post by Xipe
Such clauses are fairly common in all employment/partner contracts, but they're usually time restrained. Like myself worked at a large games and betting company (online casinos and stuff) and part of the contract was that if I quit or was fired I couldn't work at any company in that market for 1 years time - I could also not work on any other commercial games and betting solutions while I was employed.

That seems fair to me. Do you think Microsoft employees should be able to work for Sun Microsystems at the same time? Or get knowledge and experience of a new revolutionary filesystem that cost the company millions to develop and then quit and sell that information to a competitor or start a company of ones own based on this technology? Then why should you have this cop-out in the contract, when the rest of your partners put everything they have into the success of the company?

You can't have the cake and eat it at the same time. Commit or quit.

I think you should a) think this over, b) have a chat with a lawyer, and c) also a chat with your partners - for you not to be able to do non-commercial stuff on your own time is bullshit (if your contract says anything like that - Google thrives on giving their employees free hands). Commercial stuff however I can see a point in denying partners to work on.


There is a difference between what you said (a non-compete clause) and what the OP said. Perhaps he meant a non-compete clause but it didn't come out well.


"I am one of the founders and will have a equal stock share with the rest of the founders. ... But its the legal document that descides what to do if someone of us dies, or we have a legal disagreement and stuff like that. The other partys want us all to be denied the right to work on any other game development at all. ... i am sickend by the tought of giving up my right to work on my own projects and be locked to the projects of this company only for many years to come."

None of us are lawyers, he isn't a native English speaker, it's in a different country and a diffent language, so this is all just guesses anyway. [grin]

It sounds like the agreement is much more than a (standard) non-compete agreement.

Since he's part of the founding members of the company, they want him to not work on any other projects, nor have his own pet projects, even if they were started prior to that work. That makes some sense, because his doing so might cause the business to fail. But it might not make sense if he has other big risks in the company. There may be time limits for the restrictions, or not. The country might allow an indefinite prohibition of work if it was signed in a contract, so he might be prohibited from starting or buying a second game company when this one becomes hugely successful making him rich beyond belief.


Employees (not founding members) generally have non-compete agreements, but they are limited by time and scope. Further, it's not uncommon for a company to allow employed developers to work on side projects as long as it doesn't interfere with their work, doesn't use their resources, doesn't have stolen code, etc. Some companies won't do it, others will, and it's usually something the boss decides based on how secure the company is. Most companies know that the last thing a programmer wants to do after a hard day of coding is to go home and code some more, so there is very little risk. Also, most companies have you specify all prior art and interests so they can avlid legal pitfalls there.

I doubt those same things are common in incorporation documents.

Incorporation, or forming a partnership, is something you should be talking about with a lawyer on your side. At the very least, have a lawyer review it before signing.

frob.

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Obscure    175
Non-competes are never fair (as they deny you the right to ply your trade and make a living) but they are common. I have been in the industry 18 years and I have never signed a non-compete. If I were to agree to one it would be on the basis that the company paid me for that time (this is often refered to as Garden Leave).

If this is a real company you are setting up then you really need to talk to a lawyer because the agreement you sign today may cover the next 10+ years of your working life.

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frob    44904
Quote:
Original post by Obscure
Non-competes are never fair (as they deny you the right to ply your trade and make a living) but they are common. I have been in the industry 18 years and I have never signed a non-compete. If I were to agree to one it would be on the basis that the company paid me for that time (this is often refered to as Garden Leave).


A little off topic from the original (whose answer is 'talk to a lawyer'), but I wanted to chime in on non-compete agreements.

I think they can be fair, if they are worded right. I've signed a few, but I have a lawyer friend who taught me how to read them, what is okay, and what is not.

A good non-compete agreement (in my view) is one that only prevents direct competition for six months or so. It just prevents the risk that you will sabotage your present employer, but it should not harm the ability to get another job.

Examples:

A good non-compete limits the employement you can have immediately AS FAR AS IT COMPETES with your previous job. If your new company's game doesn't compete with the old company's game, there is no competition and there is no problem. Very few games actually compete with each other.

If you were a game logic programmer making a FPS and move to a game logic programmer for an RPG, there is no competition between the games. If you were a game logic programmer for a FPS and moved to an engine programmer for another FPS, there is no competition between the employment roles.

But ... if you jumped from the Blizzard networking team to BnetD, you'd be in the restriction. If you were writing the HTML rendering engine for IE7 then moved to the Mozilla project to work on their HTML renderer, you'd be in trouble.


I've seen badly written non-competes that (according to my lawyer friend) would not hold up in court. I've never had to sign one of those.

I have no objection to properly written non-compete agreements.

frob.

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