Category: TEE (The Educated Employee)

TEE: Non-Disclosure While Interviewing

This post is part of a series of posts called The Educated Employee (TEE), the goal of which is to get employees up to speed on the terms and conditions they usually (but maybe should not) agree to as part of taking a new job. As always, I will caveat the following with the statement that I am not a lawyer; my ruminations should not be taken as legal advice; and you should seek out proper legal counsel before you sign potentially-life-altering contracts.

Non-Disclosure While Interviewing

Lots of people glibly sign non-disclosure agreements (NDAs) while interviewing. This is, generally speaking, not an sharp move. Statistically speaking, you are not likely to get in trouble for signing a non-disclosure agreement – but you do want to be careful and thoughtful about them.

When it comes to hiring interviews, companies are all over the map about if and when a prospective employee needs to sign an NDA. Some firms require you sign an NDA to get into the building (cough cough). Many will require an NDA when you’re deep into the interview cycle and they need to open their kimono to test some of your knowledge/skills/etc. Some firms won’t ask you to sign an NDA until your first day of work.

Sometimes there’s a solid reason for a prospective employer to require you to sign an NDA. Sometimes there isn’t, and they just request it as a default in case any of their employees involved in the interview process screw up and blather on about top-secret-project-xyz. Sometimes they just ask for the hell of it ‘cuz most folks giddily sign them and there’s really no downside for the employer to have you sign one.

What’s the downside to signing an NDA during an interview process? Basically, it’s the same reason that venture capitalists don’t sign NDAs and why there’s such an uproar in MA about banning non-competes. If you’re an expert in the voice processing space, for example, you have a constrained number of potential employers you could be talking to. Many or most of them are competing with one another. If you sign an NDA with ACME Voice Processors, Inc. at your first interview, and then you want to take a job with VoizeProzezzing LLC a month later, the latter will consider your NDA with the former a potential liability. ACME could inflict various flavors of legal grief on Voize if they hired you. As I mentioned at the start, the statistical probability of this is  low, but it isn’t zero. Lawyers like zero 🙂 .

You should only sign an NDA if it’s warranted. Net-net, it’s warranted only when the prospective employer needs to share proprietary corporate information with you in order to evaluate your applicability for the job. Do keep in mind that it might be reasonably warranted if you simply want to “see the office space”, as there could be who-knows-what all over white boards and on desks and visible on computer screens.

My advice to people is that there’s virtually never a reason to sign an NDA at a first interview. You’ll be talking to someone from HR or to some senior person in the firm, and their goal will be to figure things out like “can she put a sentence together?” or “does he smell horribly?” or “is this resume total bullshit or not?”. None of that requires an NDA. Furthermore, you don’t really need to know anything beyond what their web site says about them during that first interview beyond things like “are these people morons?” or “do they all smell horribly?” or “is their web site complete bullshit and this is all vapor?”. If you strike up a positive relationship with the first interviewer, and are piqued by what the company is doing and how it seems to operate – and assuming the feeling is mutual – then there may be a reasonable discussion to be had at a second or third in-depth interview regarding an NDA.

So do you have to sign an NDA if the prospective employer asks? Of course not. It’s still a free country! But it’s admittedly not always that black and white. As I mentioned in the TEE: Everything Is Negotiable post, you need to know when/if you have leverage. If you have no money and your mortgage payment is due in 27 days, well, maybe you don’t have arbitrary flexibility. Also, if the company is particularly prickly about it (and some are), your refusal could send a negative signal. You should evaluate these sorts of risks beforehand.

Like most things in life, the best solution is usually open, crisp communication. If they ask you to sign an NDA in order to walk in the front door for the first interview, suggest “perhaps we could skip that by chatting at the coffee shop next door – my treat.” If they ask you to sign an NDA during an early interview and you’re not comfortable, suggest “I’d rather not yet discuss any information about your company that isn’t already publicly available. If we both decide we  want to take this interview process further, I’d be happy to discuss an NDA.”

In closing, I’d love to hear about folks’ experience with NDAs during the interview process – please post ’em in the comments!

Please submit any questions or comments or arguments in the Comments to this post. My goal is for this series of posts to become a useful community resource, so please participate!

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TEE: Everything Is Negotiable

This post is part of a series of posts called The Educated Employee (TEE), the goal of which is to get employees up to speed on the terms and conditions they usually (but maybe should not) agree to as part of taking a new job. As always, I will caveat the following with the statement that I am not a lawyer; my ruminations should not be taken as legal advice; and you should seek out proper legal counsel before you sign potentially-career-altering contracts.

Everything Is Negotiable

Please say that out loud. Again. Keep going…

Any and every term on an employment agreement is theoretically negotiable. If a company tells you it isn’t they are almost certainly yanking your chain. Don’t believe the hype.

Lots of employees (and statistically speaking, this set includes you) make the unfortunate mistake of not seeing the terms of their employment until after they’ve started. At that point, terms are not negotiable ‘cuz you’ve fucked up. Negotiate terms while you’re negotiating your offer. The legal terms of your employment are just as much a part of your offer as the salary and stock options.

The first push-back you’re going to get as an educated prospective employee (a TEE) is “we don’t change those forms” or “that’s just the way we do it” or “those terms aren’t negotiable”. It’s bunk. They most certainly can change these terms.

Companies negotiate a TON of contractual things. All the time. All companies have a threshold cost number, above which the terms of that cost get negotiated. For multi-national conglomerates, that number is obviously higher than for a young startup, but you get the point. A company with ten employees renting 2,500 square feet of office space at $20/sf/yr is looking at a 3 year commitment of $50K per year. Leases (for example) get negotiated ad nauseum. If the company is offering you a senior engineering job for $100K per year, is it not unreasonable to expect negotiations? Of course it’s reasonable. What signal should it send to you if they are not even willing to have such a conversation?

All that said, be sure to understand how valuable you are to the company. Not all employees are critical to a company. If you’ve gotten an offer to sweep the floors (no offense to floor-sweepers!) it’s likely the employer can quickly find five other folks who’ll take the job with no discussion of any terms. If you’re one of the top RoR guys in Boston, you can negotiate until the cows come home. Like any negotiation, you need to know how much leverage you have.

Even if you are not critical to the employer, there’s no reason you can’t put forward some desired changes to the terms, if they’re warranted. At a minimum, if your requests are reasonable, they will at least think you’re a smart potential employee and you’ve done your homework.

Is the goal here for every employee to make a stink with every potential employer about negotiating every term in an employment contract? Absolutely not. The hope is that an educated employee base will quickly cause employers to tone down those employment terms that are problematic so that their default template of terms is hyper-reasonable for all employees.

Next up: Confidentiality agreements during the interview process.

Please submit any questions or comments or arguments in the Comments to this post. My goal is for this series of posts to become a useful community resource, so please participate!

TEE: Get the Timing Right

This post is part of a series of posts called The Educated Employee (TEE), the goal of which is to get employees up to speed on the terms and conditions they usually (but maybe should not) agree to as part of taking a new job. As always, I will caveat the following with the statement that I am not a lawyer; my ruminations should not be taken as legal advice; and you should seek out proper legal counsel before you sign potentially-life-altering contracts.

Get the Timing Right

So you’ve hit the pavement looking for you next gig. Congrats and happy hunting!

Once you, our intrepid job candidate, are done dancing with a bunch of companies, if history is a guide, you and one or more companies will decide you might want to get married. I’ve given out hundreds of job offers, and in my experience, this is usually how this process has (WRONGLY) panned out:

  1. Employer makes candidate an offer. Salary, options, basic benefits, start dates, et. al. are discussed.
  2. Candidate contemplates offer and asks various questions of employer.
  3. Candidate accepts Employer’s offer.
  4. Candidate gives notice to his or her current employer.
  5. Candidate – now Employee – starts with new Employer.
  6. Employer hands huge stack of contractual employment docs to employee to sign.

In case it isn’t painfully obvious, Step 6 in this process is broken – for the employee. Total, unequivocal, complete FA1L on his or her part.

For the avoidance of doubt, Step 6 should be part of Step 2. Ask for copies of the company’s template employment documents / contracts that they are going to require of you. Make it clear you will be evaluating them as part of the offer. Read them and understand them. Get them reviewed by a lawyer.

If a company refuses to share such documents with you, try to reason with them that it’s a reasonable request, and if they put up any sort of a fight about it that’s a bad signal.

You want to see all those documents as you evaluate your offer(s). The terms and conditions of your prospective employment are absolutely reasonable things to request. Those terms and conditions are a material part of their offer. If two companies you dig offer you an $80K salary – but one has a broad non-compete agreement, or a crazy-long non-solicit, or non-standard option vesting (you get the idea) in their employment documents, then the offers that look “the same” at first glance are clearly not.

Net-net: do your research. Remember, this prospective employer is going to be sniffing your butt to the Nth degree and you should be doing likewise. It is your responsibility to figure this stuff out and know what you are signing!

And if you don’t like one or more of the terms, then try to negotiate them away — the topic of our next TEE missive.

Please submit any questions or comments or arguments in the Comments to this post. My goal is for this series of posts to become a useful community resource, so please participate!

The Educated Employee (TEE)

Welcome to TEE: The Educated Employee. This blog post (TEE#0) marks the start of a series focused on educating the people who work for companies (a.k.a. “employees” – probably “you”) on the various terms of employment they may bump into during their careers.

I was inspired by two events to create this series of posts. First, the current, bubbling debate over non-compete agreements in Massachusetts has kicked my ass into gear on such topics. Education is the best fix for this challenge. Second, as I performed due-diligence on the nine companies we invested in for TechStars Boston 2009, I found a few (a few too many) unpleasant examples of unreasonable employment paperwork clauses that should never have seen the light of day – never mind the ink of an employee’s pen.

There needs to be more knowledge out there among employees.

The goal of TEE is to discuss employment-related contractual topics in a manner that provides employees useful context on what can be negotiated, what is and isn’t reasonable, and, for some of this stuff, what the heck it even means.

Employers get away with some wacky stuff because many (perhaps even most) employees appear to be clueless on these issues. An educated employee pool will mean (a) employees will get fair deals, (b) companies won’t be able to over-step, and (c) the ecosystem will operate more efficiently.

Most of these posts will apply to any type of employee. My personal experience is with software companies of varying sorts – as employee, employer, founder, executive, advisor, director, and investor – over the last 20 years. It shouldn’t matter a ton whether you’re prospective employee #38,192 at HugeCo, Inc. or whether you and your drinking buddies have just incorporated, planning to build the next great video game company (which you’re now all employees of).

I don’t claim to be a world expert on these topics. However, I’ve seen a ton of these agreements and situations over the years, from both sides of the table. I’ve certainly seen a fair bucketful of bullshit. As this is a public forum, my strong hope is that the community will chime in with comments, links, and the like to help flesh out any oversights, errors, and additional details.

The straw-man list of posts is as listed below, and will probably be presented in roughly this order. I’ve tried to put the slightly more obscure and/or less critical stuff later in the cycle.

  • Everything Is Negotiable
  • Get the Timing Right
  • IP Assignment (before / during / after)
  • Non-Disclosure
  • Non-Compete
  • Employment-At-Will
  • Non-Solicitation of Employees
  • Non-Solicitation of Customers
  • Limitations On Other Activities
  • Founder-Employee / Employee-Employee
  • Termination Not For Cause
  • Death & Disability
  • Right to Insure
  • Assignment & Succession

Disclaimer: I am not an attorney. I’m sharing my own personal experiences and opinions here; I am NOT sharing legal advice. It is your responsibility to have each and every legal contract regarding your employment reviewed by competent, educated, clueful counsel.