Friday, July 24, 2015

Beware of Non-compete Clause in Your Offer Letter

This is something I learned lately while searching for a job especially for the job that posted by my company's competitor. So the conversation goes like that:

HR: What is your limitation?

Me: I don't have any limitation. I'm a full time permanent employee. I just need to give  4 weeks notice.

HR: No, I mean limitation such as what is the period you're not allow to join our company due to non-competition contract.

Me: Huh? I'm not sure about that but I believe is none. I need to go back and look at my offer letter and get back to you.

HR: Yes, give me a call when you find it out.

So I went back home and checked. You need to search for this few keywords (e.g. non-compete, non-competition) in your offer letter. It turns out that I can't join any of my company competitors in NSW after 12 months I leave my current company. So I called him back the day after. Since I was not 100% sure, I also copied the clause and sent it to him in email to confirm.

ME: I think if I understand it correctly, in my offer letter, I'm not allow to join your company within 12 months after I resign. I send the clause to you, can you please help to confirm?

HR: Yes, you understand correctly but normally employer can only hold an employee not more than 3 months and they can't stand legally to hold you for 12 months. Can you no working for 3 months? You can join our company after 3 months. You may also want to check with your lawyer.

Me: Let me think about it and I will get back to you.

I think for a while, I think it is not worth to take such risk. Furthermore, I can't be jobless for 3 months. So I decided not proceed with it. The HR called me back after few days I didn't get back to him, and I had no choice telling him not to proceed. So sad!

Key Learning

  • Read your offer letter carefully especially on non-compete clause
  • Negotiate to change or remove the non-compete clause in the offer letter
Sometimes it also depends on whether you are at right position to negotiate because you may lose the job. I will say as long as you're employed, you should negotiate this. I definitely will do it next. Ultimately  I want to remove this clause completely and if can't, I will aim to reduce the period to 1 month.
But now, I'm stuck...

P/S: I ask around people here it turns out employer suing an employee for non-compete clause is common here. So luckily, I didn't take the risk.

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