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Wannabe Geek

Topic # 84684 5-Jun-2011 12:48
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I just received the contract for a programming job in the IT industry that I applied for. There is just one clause I'm not sure about.  The confidentality agreement.

This states that I must not work for any competitor for a year if I leave. I like the job offer but if I leave after a year or two, I don't want to restrict myself from getting a job later. Especially if the job is in a similar field. Has anyone else had any experience around this? Is this something I should be worried about or is it standard jargon they put into every contract? Should I get some legal advice and if so can anyone recommend someone?

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1598 posts

Uber Geek
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  Reply # 477971 5-Jun-2011 12:50
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To my knowledge, its fairly standard. Its designed to stop you from joining them and stealing all their "secrets" and running off to another company with their "secrets".

321 posts

Ultimate Geek
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  Reply # 477981 5-Jun-2011 13:20
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Below are links to just a couple of many online articles about the issue by NZ lawyers.  Not much point in trying to reiterate it all here, especially as I'm most certainly no lawyer, but inessence the answer is "it depends on circumstances" and any restraint of trade must be "reasonable".  As always, if you are concerned, it might pay to seek some legal advice first rather than hoping it will not be a problem sometime down the track.  Others may be able to help with cheap / free sources of such advice (lawyers are, of course, a very "expensive" source of advice!)

"It is useless to attempt to reason a man out of what he was never reasoned into."
— most commonly attributed to Jonathan Swift, author/theologian


6434 posts

Uber Geek
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  Reply # 477986 5-Jun-2011 13:51
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AFAIk (and IANAL) these type of clauses have to be quite specific. They would only usually apply to quite specific roles where the risk of stealing trade secrets is high - vry senor management and a few special jobs.

I also think there is very little they practically do to enforce the clause.

1710 posts

Uber Geek
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  Reply # 477990 5-Jun-2011 14:28
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Firstly, IANAL.

If the clause is quite generalised then it is not enforceable. They cannot legally restrict your future job prospects. All the can do is restrict you from going an working for a direct competitor and taking their trade secrets with you.

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Master Geek
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  Reply # 478295 6-Jun-2011 19:31
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Hi there -

I used to manage a development office and wrote up most of the contractual agreements. A confidentiality agreement is quite standard, it means that you'd be liable if it was discovered that the trade secrects/information from your previous company wound up being use by your new employer. There is generally no expiration limit specified on this.

In terms of not being able to work for a competitor - that should actually fall under a "restraint/restriction of trade" clause. It would also apply to competitors in the same business - for example if you worked at fishpond, then left to work at mighty ape. Restraint of trade is also typically limited to a city/region/or by distance (i.e. within x Km of your previous employer.

If possible, I would negotiate on the duration of the restriction of trade to no more than 6 months.

1923 posts

Uber Geek
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  Reply # 478304 6-Jun-2011 19:51
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You should get some clarity on this either through the company making the offer or a lawyer.

The key issue being is the Clause intended as a 'confidentiality clause', meaning you won't take confidential practices or trade information withyou when you leave.... or is it intended as a 'restraint clause'. If it restrains you from using a specialist skill (that you may previously have had) for another employer then they may need to compensate you for the period of the restraint.

Both are fairly common, but it's important you get the correct interpretation on the clause so you can decide its importance, and sometimes they're simply stuck into every job offer without much forethought.

646 posts

Ultimate Geek
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  Reply # 478321 6-Jun-2011 20:23
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Restraint of Trade can't stop you from making a living. So if the clause in effect makes it impossible to work in your industry, it's utterly unenforcable.

Most of the earlier posters are correct though, if you operate 'reasonably' and don't betray any trade secrets you're unlikely to have problems.

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Uber Geek
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  Reply # 478386 6-Jun-2011 22:55
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I had a friend who spent a bunch of time over this in court. From memory these things are difficult to enforce, and are rarely enforced, but it costs a lot of money and time if they do.

I would ask that it was more specific, and a shorter period. Honestly if you're a grad what you could take with you in your head would be limited.

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