Employment contracts are all take and no give?

May 19, 2009 11:59 PM

How do you balance employee rights vs company needs in an employment contract?

(This question is on behalf of my husband.)

I'm looking at a contract that seems a bit one sided. The company wants a probation period, ownership of anything I do at work or at home, no out of hours work for anyone else, and a non-compete if I leave. This all seems like a bit much for a regular employee.

You can see the middle management point of view here - but this is a professional role that should involve trust.

What is reasonable to ask of a programmer these days?

posted by tracicle to work & money (13 comments total)

It's unreasonable for a company to demand that they own what you do out-of-hours, and non-competes are a joke (and last I heard, never enforced).
posted by cmonkey at 12:13 AM on May 20

What country / state?
posted by zippy at 12:20 AM on May 20

New Zealand. We're consulting with an employment lawyer, but we're more interested in the philosophy of it -- should a company have such control over an employee?
posted by tracicle at 12:28 AM on May 20

should a company have such control over an employee?

No, of course not. All they are entitled to is 8 hours (or 6 or 4 or whatever they're paying for) of good work. They have no right to claim ownership of what you do outside of work or to dictate what someone does outside of work. In most companies this is made quite clear - my contract says that what I do on my free time is mine, but if I write software on the company-owned laptop at home, it's theirs. And that's fair enough.
posted by cmonkey at 12:47 AM on May 20

The company wants a probation period - totally standard

ownership of anything I do at work or at home this is the only thing that really isn't completely normal and standard in my experience. I would imagine your employment lawyer will tell you this is unenforceable unless they are providing you equipment to use at home and in which case they own everything that you do on the equipment they provide but I don't really see that they can have any legal claim over anything you do in your own home on your own equipment.

no out of hours work for anyone else - pretty standard clause in any contract I've had - some add 'without permission'. They don't want you thinking about other projects while you're on their time or being too worn out from your out-of-hours work to get their stuff done.

and a non-compete if I leave - totally standard, generally unenforceable, but your lawyer will be able to advise how that plays out in your jurisdiction
posted by missmagenta at 12:55 AM on May 20

I am a programmer in NZ. Currently I'm a permanent employee, but I've done quite a bit of contracting too.

I have never ever signed a contract, permanent or fixed-term, that required ownership of my work at home, and in one case I returned a signed contract with that clause crossed out (the employer accepted it too). Most contracts I've seen here did not have such a clause. I regard this sort of demand as totally out of line in NZ. Bear in mind my experience is more enterprisey/corporate -- perhaps things are different in boutique high-tech. My current employer's standard contract explicitly covers this issue and states that as a matter of policy open-source hacking on your own time is totally ok.

No moonlighting is standard, but usually has an "except with the permission of the management" clause so you can do a website for your social cricket club.

Non-compete (so-called "restraint of trade"): I am NOT a lawyer, but I have consulted one in the past in NZ on this very issue. My understanding is that:
a) NZ employment law voids such clauses if it prevents you from exercising your trade at all, so it must be worded narrowly enough to allow you to work as a programmer in some capacity somewhere;
b) three months is the upper limit that a court will likely enforce if it enforces it at all, and;
c) courts tend to favour employees if they haven't done something completely unethical like go and bag the employer's client for themselves. Other advice was that suing is expensive for a small firm and they'll probably let you get away with it -- the real risk is that this is a small market and people talk, so if you crap on your employer, word might get around. This is definitely one of the murkier areas of employment law here and you need good advice and an assessment of the employer's temperament. I have seen contracts with this clause in, but they're a minority.
posted by i_am_joe's_spleen at 1:51 AM on May 20

Not in NZ, but it's common for contracts in the UK to have "ownership of work done on your own time" clauses in. I've always called and asked if it's OK to cross that part out before signing, and never had a problem.
posted by emilyw at 1:57 AM on May 20

Yeah, thirding that the 'ownership of things you do on your own time' is the only non-standard bit of the contract, and I'd push back on it if I were you. Given the propensity of programmers to have personal projects they work on, this seems sort of sinister, to be honest.
posted by Happy Dave at 2:00 AM on May 20

I've always called and asked if it's OK to cross that part out before signing

I've always just crossed out all the bits I'm not happy with, without assuming that anybody else has the right to stop me from doing so. If the other party subsequently signs on their dotted line (as all have done so far): well and good, we have a contract. As far as I'm concerned, they're just as much expected to read what they sign as I am.
posted by flabdablet at 3:36 AM on May 20 [4 favorites]

I'll agree with everyone above who crosses out the objectionable portions of the contract. I've done this before and it's perfectly reasonable. Remember - you're making an agreement, and that can involve discussion and compromise on both sides. There is nothing sneaky about crossing out bits in a contract. Initial each of your modifications and ask that they do the same, then you both sign.
posted by odinsdream at 5:29 AM on May 20

All those clauses are very common in creative/development work. I have signed many. How enforceable they are is addressed above, and varies a lot depending on local law and circumstance.

As for the philosophy of the 'odd' one... the idea of the employer having ownership of work you may do at home exists because with software (or most creative work) it's very difficult to prove where/when something was done. (When did you write this code? Can you prove it?)

So a shifty employee may invent or develop something at work, perhaps by using company resources, time and other peoples' input... and then, realizing its a lucrative thing, claim it was something they developed on their own time, equipment, at-home, and so on.... and walk out the door with it. The company, in that scheme, has just bankrolled the employee's entrepreneurial startup without intending to. This happened often enough in dot-com booming California for it to become a commonplace worry in tech contracts.

By having a "it's all our property no matter where/when" clause, the employer (and employee) are freed of that worry, not to mention the headache of trying to track and isolate individual tasks, inventions, work pieces, and ideas. It's all under the umbrella.

To make it more equitable, its usual to narrow the scope of "all work" to only cover the sharpest part of the employer's field. If it's a company developing health-care management software, for example, narrow the "any software development" only to software for that field. That way if hubby invents a better disk defragmenter on his coffee break, no problem. At the same time, the employer's not worried that he's building better health-care software only so he can "steal" his own work and walk away later.

So rather than asking to strike it (which will make some employers nervous in a what-is-he-planning way), ask to narrow it to cover their industry/field, not "all programming", and explain it away as "I like to make computer games on weekends" or something unrelated.
posted by rokusan at 6:04 AM on May 20

(I know, late answer, more for the record for additional New Zealand perspectives, rather than random people who pretty obviously have no clue about standard New Zealand working conditions or employment law...)

The company wants a probation period, ownership of anything I do at work or at home, no out of hours work for anyone else, and a non-compete if I leave.

1/ This is so new to New Zealand I don't have a feel for how common it's become. I do know my recently-signed contract with a large corporate didn't have one. Given how new it is, I'd be a bit sus with anyone who had it so soon after it became a legal provision.

2/ At home is totally out of line in my experience. Even the shadiest, in employment law terms, NZ companies I've worked for didn't try this one on. It's not normal, it's not reasonable.

3/ Normal, reasonable, although it's also normal and reasonable to allow exceptions by arrangement.

4/ Non-competes are effectively worthless under New Zealand employment and case law unless extremely well-defined. Pretty much anything other than "You will not try to hire staff away/poach clients/reveal confidential information" will be thrown out of court, unless it is specifically compensated for with payments over and above your salary after you leave.

Points 2 & 4 would have me very suspicious of the company trying to push them if 4 is very broadly defined. My experience in New Zealand has seen me encounter a few companies that have ("You may not work in any field our company works in within 50 km of our offices", that kind of thing), and, frankly, they are usually some combination of sleazy, have piss-poor legal advice, and/or piss-poor management. YWWV, of course.
posted by rodgerd at 3:52 AM on June 12

A follow-up for anyone who might come along and read this: due to the contract's odd stipulations, and the ensuing negotiations with the employer (who has no HR person and does all hiring and legal stuff himself, and really had no clue about current employment law), the husband declined to accept the job.

An employment lawyer looked over the contract and deemed the after-hours ownership of work unenforceable, and the non-compete would have to include monetary compensation to be enforceable. The employer was unwilling to renegotiate these points. Husband is now going it alone as a contractor.

Thanks for the comments, everyone.
posted by tracicle at 5:30 PM on June 19