Two year non-compete just to interview?

In My Humble Opinion (IMHO)
#1

I had a phone interview recently with a consulting “firm”. I use the term “firm” in quotes, because it’s really just 4 guys outsourcing a bunch of 1099 contractors to their old Arthur Andersen contacts. Fine. Not really what I’m looking for, but I understand the business model.

But the odd thing is they wanted me to sign a NDA / non compete agreement before discussing specific clients. One of the terms was that I could not work for any of the clients discussed for 2 years. For example, if they were trying to position me for a contract with IBM, I could not take a job with IBM for 2 years, even if we didn’t close the contract.

That seems absurd to me. I can MAYBE understand signing such a document once I was accepted by the client.

#2

2 years? I could see you not being allowed to take a job with the division or group for maybe three months, but if the clients were large why should they block you from working from a different division.
Non-compete? Against who, exactly? The client they told you about, or them?

If by any chance you want to deal with these people I’d run the contract by a lawyer. Non-competes are not allowed in California and some other states.
I wonder if these guys have a clue.

#3

Not sure if this is a question or just asking for advice.

If you just wanted advice, here goes: These people are clowns, and not people you want to be in business with. I wouldn’t give them the time of day.

#4

Maybe more MPSIMS. I know enough not to deal with them. I was just curious if anyone else ever encountered something so stupid.

It’s not even a business model that makes sense.

Real consulting firms (like Accenture, PwC, Deloitte, McKinsey and so on) will have you sign an NDA after you are hired so you agree not to share client or firm secrets. They may have agreements with their clients to not hire away their people without compensation. But ultimately they aren’t opposed to their employees getting hired by clients. Consulting firms tend to have high turnover anyway and want to have a network of former employees placed at companies they do business with because they are potential future clients.

These guys are just glorified headhunters running a glorified temp agency.

#5

When I was leaving the Navy I sent out a bunch of resumes before I left. One firm replied back asking that I refrain from applying to any other firm for six weeks while they tried to land a contract by showing how sterling their employees were, but did not actually offer a position. I said no.

#6

I believe there are temp agencies that try to put limits on how fast their temps can get hired in by clients. I’m not sure how effective it is.

But a non-competition agreement just to interview? Ridiculous

#7

[quote=“Acsenray, post:6, topic:826146”]

I believe there are temp agencies that try to put limits on how fast their temps can get hired in by clients. I’m not sure how effective it is.

But a non-competition agreement just to interview? Ridiculous[/QUOT

I’ve worked for temp agencies and there is a non-direct hire (without the company’s consent) clause in both my and the client’s contract. This site gives an example of the employee clause and some answers:

“Employee acknowledges that he/she will assist in maintaining its business relationship with the client. Employee agrees that he/she will not perform any services for the client, as an employee, contractor or consultant except through , during the term of the contract and for 120 days after Employee stops performing services under this contract.”

https://ask.metafilter.com/184108/Is-this-clause-in-my-temp-agency-agreement-fair

The key is that as a temp, I’m an employee of the agency, not the company I’m working at. It’s unlikely that I would be sued for breaking the agreement, but the company hiring me could possibly be. I say possibly, because for those in my field/pay grade (accounting), the buy out fee is ~$10,000 for an immediate hire and reduced to zero in about 6 months. For a large temp company, probably not worth the paperwork. Though the client company will be blackballed by that agency and probably all other agencies.

#8

Slight nitpick; there are a few scenarios in which non-compete agreements cany hypothetically be enforced in California, but they all pertain to partnerships and joint ventures; as an ordinary employee, non-compete agreements have no standing in California (even if they are valid in the state in which the business is incorporated) and in general NCAs are notoriosly difficult to enforce unless there are actual harms arising from clear malfeasance, e.g. theft of intellectual property which reaults in a competitive advantage for a competitor.

I’ve signed non-disclosure agreements (NDA) to interview, but would never sign an NCA or even interview with someone who requested it because it demonstrates a lack of good business sense to ask.

Stranger

#9

The contracting company we used had a specific process for hiring contractors full time. (I forget what it was, and I wasn’t managing them when they came on.) Nothing strange about that at all.

#10

I’ve seen some equally stupid stuff reported in the headhunter blog I read, such as companies demanding references before the first interview. I’m not sure about this particular case, but I might have seen something just like it.

NDAs are standard for regular employees also. And for dealing with vendors often. When I was buying expensive software I did a lot of them.
However, when we interview we never tell the interviewee anything that we wouldn’t want to get out there. You could well be interviewing people from competitors. I can think of an exception where the project was super secret, but it wouldn’t be common.

#11

That seems insane to me. I wouldn’t go near a company that tried to make me sign any kind of non-compete just to interview.

NDAs are pretty standard, often just to visit the office, but that’s totally different.

#12

The OP doesn’t specify what the “consulting firm” does, but I could see a NCC being asked for if interview required disclosure of some important (i.e. to another competing company) info about what/who they’re representing. Especially if they’re in the process of bidding for contracts.

That said, just because it’s asked for doesn’t mean it’s legal or good business practice. In this case, both may apply.

Bottom line, don’t like it or agree to it, don’t sign.

#13

NDA or non-compete? I can see an NDA in this situation, not a non-compete. Even if a person signs with a competitor, they would be forbidden from using any information learned in the interview process by an NDA.

#14

[Moderating]
I’m not really seeing a factual question here. Off to IMHO.

#15

Doesn’t a contract need something for both sides to be valid? Is the interview in itself (and chance for employment), sufficient to fill their end of the deal?

#16

IANAL, and a lot depends upon where the work would be performed, and the “Choice of Law” in the contract. The clause is probably not actionable; but it could cost you a lot of money to defend against it. Just the attempt would signal to me an extremely immature organization, but it seems you know that about them already. Getting in on the ground floor of an organization like this can be quite lucrative, but it can also leave you exhausted and without needed resources to get your job done.

If you want to move forward with these bozos, my advice would be to add limitations to the “Purpose” clause. Limit the applicability to the specific RFP# or narrowly define the specific office within the organization that they are marketing to.

I would also try to limit the time period to one year or even six months.

To the expiration date I would add a clause stating that the exclusion terminates automatically if the firm does not fill the post within four months. So if they don’t make you an offer, and they don’t find somebody else, you are free to give it a try on your own, or through another organization.

But my primary advice remains: You don’t want to work for this group. You’d be better off going after the work directly on a 1099 basis.

#17

From what I can tell, the work they perform is similar to the sort of nebulous operational “strategic” consulting I did at my last consulting firm or when I started my career in a “performance improvement” practice at Deloitte. In practice, what the work actually involves is mostly sending “smart people” with diverse and superficially impressive backgrounds (not unlike mine) into roles as project managers, business analysts or supporting a PMO on some large initiative and then writing some inflated “case study” of dubious legitimacy, typically overstating the consultant’s or firm’s actual contribution to the initiative.

#18

+1, +2, +3 etc. - in short, I think it’s absurd.

I once had a placement firm ask me not to apply for jobs through other means. Er, WTF???

I’d be surprised at the temp firm putting limits: most of them have deals where they get a fee if you hire onto the client, don’t they?

As far as absurd non-compete: I won’t eat at Jimmy John’s sandwich shops because they require (or used to; I think they’ve stopped this) their minimum-wage employees to sign something saying they won’t work for another restaurant.

#19

Walmart did (does?) the same for some low-level managers which effectively bans them from any retail job for 6 months after leaving.

#20

Interesting. Yet another reason not to shop at WalMart.
There are so many.