It aligns closely with my experience.
Even if your client won't agree to removing some wording, you can usually get them to compromise on terms that are less drastic, especially regarding ownership.
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Sign another contract with a no-compete clause.
I learned my lesson. In 2001 when my company laid me off and it didn't release me from the 6 month non-competition clause, I couldn't go to a company I had worked for 3 months earlier and apply for a job I know they wanted to hire me for when I was contracting there.
It bit the big one. And, the corp I was a contractor through was cutthroat enough to cut me even though I had been a profit maker for them in the 500-700 percent margin range for almost 3 years.
I guess that's why their stock went from $8 down to $2 as well. They cut their own throat cutting their staff rather than non-profiting, higher-pay management types.
But, no one ever ties my hands again like that.
I learned my lesson. In 2001 when my company laid me off and it didn't release me from the 6 month non-competition clause, I couldn't go to a company I had worked for 3 months earlier and apply for a job I know they wanted to hire me for when I was contracting there.
It bit the big one. And, the corp I was a contractor through was cutthroat enough to cut me even though I had been a profit maker for them in the 500-700 percent margin range for almost 3 years.
I guess that's why their stock went from $8 down to $2 as well. They cut their own throat cutting their staff rather than non-profiting, higher-pay management types.
But, no one ever ties my hands again like that.
Just for your information, if you sign a non-compete and are relieved of your job, you're pretty free to seek employement. You have the right to work and virtually any judge will rule for you over a non-compete as long as you have acted in good faith.
I could work in the industry. Judges won't keep you from that under a non-compete.
However, the specific company I would have gone to was still involved in various contracts with my former employer. Hence, there would have been some difficulty there.
A judge won't keep you from working in your IT field under a non-compete. However, they might stop you and enforce the non-compete, since you are going back to a former workplace to become a direct competitor to your former employer.
I talked to my legal firm I keep on retainer. They said it would be a toss-up as to whether or not I'd win, and would cost me more than it would be worth in legal fees.
As to whether I would win, my contract said I agreed to have any things heard in the State of New York. And, that meant I would probably have been involved in having to be in a court room in their city and having to pay for hotels, travel, meals, etc.
Being I'd just lost my job, was on unemployment, and had to cash in my retirement accounts to pay my bills.
Well, I wasn't in any position to fund a legal battle with a corporation.
However, the specific company I would have gone to was still involved in various contracts with my former employer. Hence, there would have been some difficulty there.
A judge won't keep you from working in your IT field under a non-compete. However, they might stop you and enforce the non-compete, since you are going back to a former workplace to become a direct competitor to your former employer.
I talked to my legal firm I keep on retainer. They said it would be a toss-up as to whether or not I'd win, and would cost me more than it would be worth in legal fees.
As to whether I would win, my contract said I agreed to have any things heard in the State of New York. And, that meant I would probably have been involved in having to be in a court room in their city and having to pay for hotels, travel, meals, etc.
Being I'd just lost my job, was on unemployment, and had to cash in my retirement accounts to pay my bills.
Well, I wasn't in any position to fund a legal battle with a corporation.
Good article and excellent resources. If you don't protect yourself nobody will.
Having worked as a contractor, this article was spot on. If you are a software developer, it is also critical that you maintain copyright to your work - code is reusable in many instances. You should also try and limit the ability of the other company to claim patents and "ideas" that come out of your work as you work for them that aren't strictly tied to industry trade secrets. The reason is that your code may solve problems in multiple industries.
One good way to do this is to put a rider in that says you won't use the ideas you develop specifically for this company within the same industry as long as the company continues to employ you. This makes sense for both of you: the company gets the benefit of your ideas without hiring you but has an incentive to continue supplying you with work, while you aren't shackled if the company ends its relationship with you and you have to go elsewhere.
One good way to do this is to put a rider in that says you won't use the ideas you develop specifically for this company within the same industry as long as the company continues to employ you. This makes sense for both of you: the company gets the benefit of your ideas without hiring you but has an incentive to continue supplying you with work, while you aren't shackled if the company ends its relationship with you and you have to go elsewhere.
NOT to steal or attempt to steal another companies clientele. And reciprocate that they refrain from poaching on my turf. That is as far as I go but I believe it to be fair and proper.
I think "heinous" is a bit of a reach but other than that a decent overview of Consulting Contracts 101.
One note re: insurance. It is rare for a cleint company to insist on E&O insurance as it will typically not do anything to protect them. Usually they are looking for comprehensive or liability coverage.
One note re: insurance. It is rare for a cleint company to insist on E&O insurance as it will typically not do anything to protect them. Usually they are looking for comprehensive or liability coverage.
Great Article?
One of my largest clients once put a contract together for an application they wanted my company to develop for them. The contract included a clause that I would indemnify them from any problems that would come up in the design and/or development of the application. I would have to defend all legal actions brought against them and pay any judgments against them from anyone either on the design or developed application.
Well it was a CICS application with their staff doing all the design work and my team doing the programming. Needles to say I would not sign a contract with a clause and possible giving away the store.
Come to find out their design term had spent a few months looking at what was available on the market and was using a database design from one company and the CICS screens from several other companies. When I found out that little piece of news I felt good about turning down the contract.
One of my largest clients once put a contract together for an application they wanted my company to develop for them. The contract included a clause that I would indemnify them from any problems that would come up in the design and/or development of the application. I would have to defend all legal actions brought against them and pay any judgments against them from anyone either on the design or developed application.
Well it was a CICS application with their staff doing all the design work and my team doing the programming. Needles to say I would not sign a contract with a clause and possible giving away the store.
Come to find out their design term had spent a few months looking at what was available on the market and was using a database design from one company and the CICS screens from several other companies. When I found out that little piece of news I felt good about turning down the contract.
I no longer negotiate contracts.
If the trust isn't there to start with, the contract won't matter anyway. Sure you may recover a few bucks, but if it got that far, the problem wasn't the really with the contract.
Better to use a boiler-plate business contract, and do due dilligence before it's signed.
If the trust isn't there to start with, the contract won't matter anyway. Sure you may recover a few bucks, but if it got that far, the problem wasn't the really with the contract.
Better to use a boiler-plate business contract, and do due dilligence before it's signed.
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