Dot the I's and Cross the T's

Have you and I forgotten anything else???? Depending on the type of job and company - YES! (Otherwise this chapter would not be here) Before accepting the new job, and well before giving notice to your current employer, ask for a copy of the pre-employment agreement.

When looking to get your foot in the door, watch for the pre-employment agreement that may stick your entire body in the same place for a while. Departments wishing to keep their new talent may require the employee to stay in the position for a time period before transferring within the company. Some departments, like customer service, have problems with high burn out rates and resulting transfers out. Other department managers with bigger budgets wanting to hire someone with a proven work record may look at other departments as their talent pools.

What Is It?

The pre-employment agreement, is kind of like a prenuptial agreement; both anticipate the termination of a closer relationship before it officially moves on to a higher (or hire) level of commitment. A good pre-employment agreement looks out for the welfare of the company without stifling your career, provided your career is not very specialized.


Broad careers, such as programmers, industrial engineers, nurses, etc... should be able to read such an agreement and not feel threatened by such an agreement. In the case of the industrial engineer, the good pre-employment agreement would prohibit the employee from working for any competitor of that company for a specified period of time. Thus someone at a soda company may not go to work for another soft drink maker, but could still accept an offer from a brewery.

Other agreements may be more career limiting. Using the example above, let's say that the soda maker feels that all beverage companies are competitors, despite the fact that brewery products have a different consumer group. As a programmer this change of corporate attitude should not be too career limiting. As a specialized industrial engineer, this could seriously reduce the number of options for leaving this company.

Making matters worst, the company may extend it's scope to competitors, clients and other companies which employ similar technology. In most cases, the soda manufacturer won't be as strict, so the industrial engineer may go work as a sewage treatment plant. But what if our programmer and engineer were working at a pump manufacturer or contract service company? Our programmer may end up putting on a suit and tie and going to an insurance company until the expiration of the contract. The industrial engineer may have to go back to school for a career change or flip burgers until the contract has expired as any company moving liquids may fall under the scope of the contract. These are just a few of the ways a pre-employment contract can hurt one's career.

People looking for jobs with client or vendor contacts will almost always have more fine print than those people who work inside the company. Remember - all revenues (unless you are either a counterfeiter or working for the government) come from customers who can take their business elsewhere. Thus a company looks to protect its customer base as to protect its source of revenue. Good vendor contacts are important to most companies as well. Many companies need raw material, and with less competition for such material, the better control they have over the market and the resulting prices.

Remember to ask your boss-to-be to be for a copy of the pre-employment agreement which you will be asked to sign before starting the job .Do not accept an excerpt, demand an entire copy of the agreement or refuse any offers made by the company.

Save a notarized copy of what you just received in the event that the "revised edition" which you will be required to sign on your first day differs from the "copy" you received earlier. If they differ, get a copy of what you are signing for "your records" and see a lawyer. Bait and switch is dirty business no matter how it's applied. If this is how you're being treated on the first day, the honeymoon period is over.

Your Own Time & Insurances

As many employers are looking to reduce the cost of health insurance, employment agreements may get into details of your personal life. Many people feel that whatever they do off the clock should not been any of the company's business, while companies feel that they should have some say in such activities as a way of controlling health insurance costs.

While smoking tobacco by people over 18 is legal, many employers find that a smoking employee is much more costly to the company than a comparably skilled nonsmoker. Employers and insurance companies have statistics that point out that the smoker will probably be sicker, take more days off and actually use the insurance policy. Thus a bias against smokers may result.

Many companies do background checks and drug tests as to weed out potential trouble. Some companies may also insist that to maintain employment, the employee can not be involved in any questionable (anything which draws police attention or could get your name published in the "Police Beat" section of your local newspaper) activities during off hours. Companies falling under DOT regulations may randomly drug test employees, and refusing such a test may result in immediate termination.


One facet of the pre-employment agreement, like the pre-nuptial agreement, looks to split property brought into the relationship and property gained by both parties during the relationship. Salespeople are commonly required to have no contact with the company's clients for some period of time after the time of termination. New client relationships made during the time of employment frequently become like property to the company; you will not be allowed contact them for some time. If all this sounds reasonable, I feel the same way. The company is looking to protect assets it developed before your arrival and the assets the company paid you to develop.

Now let's look for the hidden screw. In some cases the hiring manager is looking for more than just your warm body and brain to fill the open position. For example, when hiring salespeople, a manager may be looking for someone who already has a list of contacts to start working with day one. A software company may not only hire you for skills that you have, but also for ideas that you may have discussed during the interview. So, in the case of the sales person, are these contacts brought in by the new hire now the "property" of the company? Ethically no, but this is business, so you must supply the ethics.

As you sign the agreement, you also assume the burden of proof should a legal battle arise. In the case of a software developer with an idea, the company may hire you to either further develop the idea within the company or as a move to crush competition (kill your opportunity). Remember, once the agreement is signed, especially if you have not taken any action, you've just gave the idea to them, possibly for free.

With the signing of the non-compete agreement, you have just lost some intellectual freedom, much like a new car looses value when driven out of the showroom; you've barely gone anywhere and there is no turning back.

Non-Compete Clauses

Non-compete clauses may sound simple and innocent, especially if you are going for a non-technical or non-managerial position in a company. You may feel that your job as a secretary can be done by anyone (but you can do it better than anyone) and that you can do your job anywhere for anyone. You may feel that any company who hires you, including the company's competitors, is getting a good employee but no real trade secrets in the process of hiring you. Key word here is "feel".

Feelings do not matter when a contract has been signed. For example, if a janitor at a software company signs a non-compete agreement, he may not be able to mop the floors at any other software company after leaving his/her current company for whatever reason for an agreed amount of time. Non-compete clauses may go further than just career / for money activities, they may prohibit you from enjoying your hobby.

As a programmer I have made plenty of Web pages (and one does not need to be a programmer to write Web pages) for myself and friends on my own time. A company which hosts, creates or has a financial interest in such may prohibit employees from doing such an activity on personal time because someone (manager, owner, etc...) in the company feels that you are infringing on a potential market.

Thus a company which specializes in automobile maintenance may require that employees no longer fix cars in their backyards. Do not disregard such agreements, as once your signature is on that agreement, you have just made your personal activities part of your boss's business. Further more, to protect their customer base, companies may require the mechanic not to fix cars in their backyard on personal time for a period after employment termination. In short, by signing such an agreement you may sell your soul.


Many people not only make money by working for someone else, but also put that money to work for them through investments. Investments may be passive, such as CDs (Certificates of Deposit), semi-passive like stock portfolios and investments may have you quite active, such as rental property. Unless you are going to work for a bank or type of investment firm, most passive investments should be OK.

As an investment gets closer to your company, the further you should steer from it. Do NOT invest in your company through channels that are outside your company, as doing such may well be considered as insider trading. Also avoid trading the stock of customers and vendors as you may have to discuss your inside knowledge of such companies to a judge as well. The judge may argue that because you may know how a customer's business is doing by analyzing sales figures from your company to their company. The judge may also argue that you can tell how a vendor is doing based upon price increases and decreases to your company.

Active Investments

Active investments may be looked at in almost the same light as the backyard mechanic - you are personally cutting in on the company's (or firm's) potential market. Someone working for a contractor may not be allowed to buy old houses and fix them up for sale at a profit as you are cutting into the company's potential market. The same could hold true for a professional like a lawyer or a realtor. Such a professional could manage rental property on their own, but will have to use their professional skills from time to time as to collect past due money or evict tenants. The firm's position may be that they hired you to do a job for them only and that, once again, you are cutting into their potential market. You may feel that everyone of your coworkers are morons and would have never used this company's services, but once you've signed the agreement, you've put the morons in charge of your life.

Intellectual Property

During the interview, it is very hard to tell the hiring manager's intentions. Ask what they are doing with the concept and how they have implemented it or how they plan to do such. Later during the interview, ask the same questions from a different angle. If the answers are similar, the company is going someplace with the idea. If the answers are quite different, the interviewer is either using this time to get free consulting advice from you or looking to hire and lock you into a non-compete agreement.
Legal? Hard to prove that anything illegal was done at an interview.
Ethical? No. Remember this is business and you have to supply the ethics.
How can you protect your intellectual property? I can not give you an answer, but get a copy of the pre-employment agreement (non-compete agreement) before signing anything and talk to a lawyer. One way to quickly and cheaply give yourself a leg to stand on (rights will vary depending on state, the wording of the agreement and how good both side's attorneys are) is to document your ideas, lists, etc... and have them notarized before your date of hire. Even better might be to have the documents notarized before the second interview, as trade secrets may be discussed during the second interview. At this point invest your time into protecting you and your future rights to the idea. Develop the plan to the fullest that you can in the time before signing the agreement. After you sign the agreement any further development of the idea may become the company's property, especially if you can not prove that you could have derived such further development on your own.

Once you sign the agreement, you have taken on the burden of proof should a dispute arise. For example, you have an idea to write the ultimate Black Book (personnel phone directory) program. Document
  1. The purpose of the program
  2. It's functionality
  3. The information (input) required from the user
  4. Reports (output) it will produce
  5. Algorithms to take input and produce output.
  6. Marketing ideas that will make the product viable
  7. Code the prototype !!
I am not saying make a final product, go for version .1, a quick and dirty prototype. Do it in a language or package that might not give you the full functionality, power or freedom, but one that will make a functional prototype. The code may not be reusable, but the main algorithms will have been captured and proven to work. Also note shortcomings of the prototype and what you think needs to be done as to make the prototype become a viable product.

As you make the prototype, you will bring the idea from an intangible concept to something real that can be seen by others. While coding you will gain a knowledge that you will also need to document and notarize before your first day of employment as to keep the creation yours. Remember, a company can not take away knowledge, but the pre-employment agreement can render you powerless over your own creations.

As a poor example - the prototype may be case sensitive, but you'd want to overcome that problem in before your first release. Fixing the case sensitivity will not change the over all program, but the employer may try to make some claim to this idea. Sounds petty, but how frustrated would you be if you spelled something correctly, but still could not find the item because what you typed was not in the same case as the letters in the database. (Case Sensitive Smith finds Smith not SMITH, smith sMITH) (Case Insensitive Smith finds Smith and SMITH, smith sMITH)

Termination Of Employment

I will dare to assume at this time one of the last things that you are thinking about is the termination of your employment from this company and how it's going to affect your distant future. Invest the time to protect yourself and your future rights to your ideas. Document as much as you can and get indisputable proof that you created this documentation without any knowledge taken from that company. The best method I know is to get it all on paper (print it out if you used any type of computer application) and get a notary to sign and date it before your first day of employment. Legal rights may vary, but you have to start someplace. You have invested a lot of time and money into your career. Education, licenses, certifications, experience, etc... can become meaningless if you sign the wrong pre-employment contract. Take the time to investigate the pre-employment agreement and it's affects on your career and your future with the company and after you leave. You must protect the investment that you put into yourself.