How Common and enforceable are non competes?

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13 comments, last by swiftcoder 3 years, 1 month ago

So I hear these things come standard in the games industry, but are they enforceable?

They all want you to have experience to get in the door, but they don't want you to be working for another company to get that experience?

Any insight into this contradiction?

If I apply for a games company, how would they see indie experience? would they want me to stop my own side projects?

Our company homepage:

https://honorgames.co/

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GeneralJist said:
So I hear these things come standard in the games industry, but are they enforceable?

Depends on the laws of the state where you're working. Maybe on the laws of the state where the company is incorporated.

GeneralJist said:
They all want you to have experience to get in the door, but they don't want you to be working for another company to get that experience?

Not at the same time you're working for them.

GeneralJist said:
If I apply for a games company, how would they see indie experience?

Applicable.

GeneralJist said:
would they want me to stop my own side projects?

Probably. Depends on the wording in the contract. There are numerous threads here about non-competes.

-- Tom Sloper -- sloperama.com

Assuming the US, this is mostly under state law.

In general courts say as long as they do not prevent you from earning a living, they are generally enforceable. Contracts that prohibit working two jobs at once (no moonlighting or hobby game side projects) are generally legal. Contracts that prohibit public appearance for several months at a new job (think news anchors or community management where many customers would follow the individual, executives, and famous names) can be enforceable under some circumstances. Contracts that prohibit working at competitors for a time are rarely enforceable, unless they are for the duration of a severance package or similar so that they are still paid.

Just like NDAs, gag requirements, and severance confidentiality terms, actual enforcement (more than firing someone) usually requires court action, and it is expensive. It is rare for companies to invest the money – probably a few thousand dollars if uncontested and tens of thousands if they fight it out, more for really big fights – but for most general workers the worst that would happen is termination without any parachute. Unemployment benefits often do not apply for termination with cause.

For some side projects, hobby projects, book deals, patents and inventions, and more, you must get written approval or a written document rejecting claims to the project depending on the contract. Without it the company may be able to claim ownership and money from the project.

In most states, they are enforceable. In California, they are not. This is one reason for the success of Silicon Valley.

Even with California's 2018 law, they can still be enforced if implemented properly.

The state's specific requirement right now is “every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.” That's easily avoidable as mentioned in my earlier post, paying them to be employed exclusively at that location with an extended termination date, which is legal. If you want to forbid working elsewhere for six months, the employment contract can require an extended notification time effectively the same as a severance package, where the person continues to be employed by the company for the duration they're paid.

frob said:

Even with California's 2018 law, they can still be enforced if implemented properly.

The state's specific requirement right now is “every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.” That's easily avoidable as mentioned in my earlier post, paying them to be employed exclusively at that location with an extended termination date, which is legal. If you want to forbid working elsewhere for six months, the employment contract can require an extended notification time effectively the same as a severance package, where the person continues to be employed by the company for the duration they're paid.

Nope. That's been tried, and California courts won't enforce that against and employee.

And if you have to go to court, and win, the employer gets stuck with your legal bills. There are attorneys who take such cases on a “no win, no fee” basis. So enforcing this isn't expensive.

Let's be sure we're on target with the original question. @generaljist is asking about continuing to work on side projects while employed. He's not asking about being prohibited from working in the same industry after termination.

In general, one can list one's existing IP when starting employment, so the employer can't claim ownership of it. But it's still best to avoid working on side projects without express written clearance from the employer (as has been said in previous replies when this question was asked before on this forum).

-- Tom Sloper -- sloperama.com

Ok,

Thanks everyone.

I'm in California.

In fact, I just had a recruit from Canada check thir HR dpt to make sure there was no conflict with joining my team.

Follow up question,

Do non Competes stipulate not working in the same industry only, or do they mean no work at all outside your main employer?

I think it is industry specific?

Our company homepage:

https://honorgames.co/

My New Book!:

https://booklocker.com/books/13011.html

GeneralJist said:
Do non Competes stipulate not working in the same industry only, or do they mean no work at all outside your main employer?

Now are you talking about working in the same industry after termination? Shifting gears away from working on side projects while employed?

Depends on the contract wording, which surely differs with every company.

-- Tom Sloper -- sloperama.com

side projects.

I don't think an ex employer can bar you from working in the same industry after termination, besides just bad mouthing you

Our company homepage:

https://honorgames.co/

My New Book!:

https://booklocker.com/books/13011.html

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