Non-Competition Clauses

[Nikos Beck]

I'm under a non-competition clause. I /cannot/ market a game or any other software until the contract expires. It seems like standard practice. I've only worked for one company that didn't mention development on my own time or registering patents.

For indie developers who are still working in other industries, how does the clause apply to you? Do they extend for some time after you've quit or been terminated?

[bvanevery]

I'm under a non-competition clause. I /cannot/ market a game or any other software until the contract expires. It seems like standard practice.

It is a clause that many companies will try to extract from new employee. To say that it is a "standard" practice is incorrect, just as to say there's a "standard" contract that employees sign is incorrect. The contract is whatever you negotiate with your potential employer. If you don't like it, then modify it, don't sign it, renegotiate it, or find someone else to work for. Or else admit that you don't have any bargaining power due to your current finances and that they've got you.

I've only worked for one company that didn't mention development on my own time or registering patents.

That's your error. If this issue is important to you, then you need to negotiate differently. Employers are often going to take whatever rights they can. Just as you are going to try to get paid as much as you can, unless you're dumb.

For indie developers who are still working in other industries, how does the clause apply to you? Do they extend for some time after you've quit or been terminated?

It's whatever's in the contract. Could be during your employment, could be years afterwards.

There's plenty of stuff on the internet about non-compete contract law, if you want to get out of your current situation. Your rights depend on what jurisdiction you're in. Usually there's a legal limitation on the scope of non-compete clauses, but you could still be shafted for a considerable period of time.

[Genimo]

Just in case you live in California, I've heard before that such clauses in employment contract in California are not enforceable. I did a quick search and:

California Business and Professions Code § 16600 states that any agreement that restrains an individual from working is unenforceable as a matter of law. While California courts will protect an employer against unfair competition and misappropriation of trade secrets, they will not enforce a restrictive covenant preventing an employee’s right to work.

This area of the law is under contract law which is governed by state law. California has very good protection for employees and may hold that the non-competition clause is invalid if it is overly broad or restrictive. Therefore, where the lawsuit is filed and whose state law is used can be critical.

California courts hold that if the employee is in California and files the case in California before the employer files in another state, then California will retain jurisdiction. If this were to be an issue, the employee should file first in California in order for the California courts to rule on the issue.

[Sysiphus]

For indie developers who are still working in other industries, how does the clause apply to you? Do they extend for some time after you've quit or been terminated?


that was in my job contract...for one year after...lol...crazy...I asked to remove it and some other...and they acepted. Most surely I wouldnt have signed if not.

[bvanevery]

This area of the law is under contract law which is governed by state law. California has very good protection for employees and may hold that the non-competition clause is invalid if it is overly broad or restrictive. Therefore, where the lawsuit is filed and whose state law is used can be critical.


Hm, recently I was drafting up my own "homebrew" contract, in anticipation of landing a client in California. In my version of the contract, I specified North Carolina law, figuring it's better not to have to haul my ass to some other state if I have to go to court. But I didn't think about the fact that California law is probably more favorable to my position as a contractor than is North Carolina law. Next time around, I'll let the other guy pick their home state if it's better than mine. We did use the California client's contract, with had lotsa typical corporate clauses about work-for-hire, patents, and etc. I just wrote my own to push things along, to get us talking about tangibles.

[Applewood]

that was in my job contract...for one year after...lol...crazy...I asked to remove it and some other...and they acepted. Most surely I wouldnt have signed if not.At a former company we didn't hire a guy because he wouldn't sign an employment contract with a similar clause in it. It's there because publishers often make studios sign something to the same effect for the reasonable reason that the studio doesn't sell all the experience learned on the publishers coin to someone else for cheap, but can come back to the guy who paid for it.

..for one year after..
It is not enforceable on an employee once he leaves your employ, so decent studios will remove that bit to lessen the argument factor. It's also easier for employers to say a blanket "no home dev" instead of "no home dev that is this, this, this or that".

The egotists of course seem to think this clause is actually present because the studio wants first refusal on their match-3 weekender, or to own their sleeping time, which I find amusing.

[Jesse Hopkins]

I've only worked for one company that didn't mention development on my own time or registering patents.

Did a lack of non-competition clause hurt that company in any way? Did they do well?

[Applewood]

Did a lack of non-competition clause hurt that company in any way? Did they do well?It might've hurt, yes. Had the studio not been able to sign their non-compete with the publisher, they would've not got the deal and possibly gone bust. In that event, all of a sudden all those employees can now do what they like in their copious amounts of unpaid free time between jobs.

As usual in these things, there's usually a "real" reason for something that looks unpalatable at first glance, and it's never actually about deliberately trying to piss people off or claim their very souls.

I know I'm butting in to someone elses conversation, but I see this one discussed a lot and the assumptions made about the presence of clauses like this is always misunderstood and taken as an afront. I did it myself once when I was young and on the other side of the table.

[Jesse Hopkins]

I see this one discussed a lot and the assumptions made about the presence of clauses like this is always misunderstood and taken as an afront. I did it myself once when I was young and on the other side of the table.

Your explanation for developers requiring the clause makes sense. But a lot of the reasons people dislike the clause still apply to the insistence of publishers on having it.

I haven't made up my mind on this, nor am I a publisher, but when I try to look at the clause from a composer's perspective - the best equivalent would be if Erich Wolfgang Korngold were forbidden to write his wonderful Symphonies while he was working under the studio system for MGM.

This is just a theory that may not apply here, but in other creative ventures, stifling creativity outside of the company can have detrimental effects on the product of the company. Again, it may not apply here, but look how John Williams' independent concert works (the violin concerto, the clarinet concerto) helped him break free of his usual sound to create the music for Schindler's List, which helped the distributor of that film out a great deal in creating an Oscar winning score.

Well, I know there are glaring flaws in the analogy, but I am trying to get at something that I think is rather important to worry about. Fire away :)

[Nikos Beck]

It is not enforceable on an employee once he leaves your employ, so decent studios will remove that bit to lessen the argument factor. It's also easier for employers to say a blanket "no home dev" instead of "no home dev that is this, this, this or that".

The egotists of course seem to think this clause is actually present because the studio wants first refusal on their match-3 weekender, or to own their sleeping time, which I find amusing.

I'd say that, in some cases, extended non-competition after the employee leaves is the part the company needs most. As an employee, the company can grab the rights and that's that. If I'm no longer an employee, they need to negotiate or ask the court for arbitration to make sure I'm not violating their licenses or using their source.

It comes down to exact wording. I've seen ones that say "no independant development while an employee", "any development while an employee using a company license on a home computer is property of the employer" and others like "an employee may not distribute or publish while an employee but retain the rights to their work and may publish after their employment is ended".

[bvanevery]

It is not enforceable on an employee once he leaves your employ,

YANAL and blanket legal statements don't hold up in international forums. If someone has a problem with their non-compete clause, they need to check internet FAQs for their jurisdiction and then talk to a lawyer if that doesn't answer their questions.

[bvanevery]

I know I'm butting in to someone elses conversation, but I see this one discussed a lot and the assumptions made about the presence of clauses like this is always misunderstood and taken as an afront. I did it myself once when I was young and on the other side of the table.

I don't care what the reasons are. Tying my hands is an expense to my livelihood, so I'm jolly well going to get compensated for it, or else walk away from such a "deal." I could care less about emotional reasons, how people feel about such clauses. The bottom line is it's worth money. I take pleasure in making the young and naive aware of what they're giving away. It's a cliche but "in life, you don't get what you deserve, you get what you negotiate."

[Backov]

The egotists of course seem to think this clause is actually present because the studio wants first refusal on their match-3 weekender, or to own their sleeping time, which I find amusing.

That's a work-product clause, and is entirely seperate from a non-compete. My company has both on our contracts here.

[bvanevery]

I haven't made up my mind on this, nor am I a publisher, but when I try to look at the clause from a composer's perspective - the best equivalent would be if Erich Wolfgang Korngold were forbidden to write his wonderful Symphonies while he was working under the studio system for MGM.

This is just a theory that may not apply here,

There's nothing remotely theoretical about it. If you're the talent, and you've got bargaining power, then secure your rights. Otherwise you're a sucker letting other people take advantage of you. I'm surprised that people are willing to be such sheep about their IP. Especially in a forum of indies. Is this a matter of age? experience? business acumen? personality?

You have to make a realistic appraisal of your talents and bargaining power, however. Histrionics on principle don't impress anyone. Rather, every right you negotiate, you can assign a monetary value to it. You need to decide whether you're arguing about big picture stuff or chump change.

For instance, I certainly wasn't going to cackle about whether disputes with the client would go to arbitration in California. I don't plan to be in legal wranglings with this particular client, and I put a fair amount of time into making the contract very clear so that we'd minimize the chance of getting into a dispute. The most important part of the contract was $75/hour and they gave me that without grousing, so I wasn't going to get picky about the other stuff. I tried to negotiate an advance out of them, and faster terms of payment, but they wouldn't budge. They were offering the rate I asked, they seemed like a good outfit to work with, and I wasn't worried about not getting paid, so what further leverage did I have? We both wanted to get on with the job.

Sure I can walk away from a job, but I don't make money walking away from jobs, I make money having jobs. Job hunting is an expensive unpaid use of time. That's one of the bottom lines to consider, whether some contractual issue is really a dealbreaker.

[Qitsune]

A few years ago, the court enforced Ubi's claims on some of their former employees who jumped boat, some to go to EA. I think EA just ended up paying for these guys to stay home until the delay was expired or something.

[Applewood]

That's a work-product clause, and is entirely seperate from a non-compete. My company has both on our contracts here.Yeah, I kinda mixed two arguments into one their, my bad! :eek:

I don't care what the reasons are. Tying my hands is an expense to my livelihood, so I'm jolly well going to get compensated for it, or else walk away from such a "deal."You of course have that right, but that attitude won't get you into many workplaces in game development for the reasons I stated earlier. It's a bit of shiteness passed down from the pub that most studios can't get away from whether you find it offensive or not.

[bvanevery]

You of course have that right, but that attitude won't get you into many workplaces in game development for the reasons I stated earlier.

I think the vast majority of game development employees are chumps, frankly. They work long hours for not that much money, mastering oodles of skills that the mainstream computer industry would gladly pay them top dollar for. Don't bother to make your money in the mainstream game industry. Go contract your skills somewhere that recognizes their market value, and fund your indie war chest that way. Or go to work for some game company that will pay you $$$$$$ and isn't taking advantage of you. If you're working on a 3d engine, what do you care whether it's getting used in a game or not? I sure as hell don't care what kind of software I'm writing a build system for, it's an ugly command line dance no matter what.

There's a big problem of experienced people leaving the game industry because they wise up and expect better. They take their skills with them, and so the engineering standards of the game industry are impoverished. It's not really our loss though. Nobody said you had to be a game industry employee.

[Nikos Beck]

A few years ago, the court enforced Ubi's claims on some of their former employees who jumped boat, some to go to EA. I think EA just ended up paying for these guys to stay home until the delay was expired or something.

I believe it was the Splinter Cell team. I heard that once they got to EA, they were split up. It was a big marketing ploy to steal members of one of Ubi's top teams. But, those were middle-level developers. The top developers and the design team are still at Ubi.

[Applewood]

I think the vast majority of game development employees are chumps, frankly. I think we've seen that there's only one person you actually look up to. I think the vast majority of them are nice guys who just want to write games for a living. Experience tends to back that up, so I don't know what yours is.
They work long hours for not that much money, mastering oodles of skills that the mainstream computer industry would gladly pay them top dollar for.
I'm seriously sick of this one keep cropping up again and again about how you can earn more away from games, but what point is it again you are making about non-competes ? And btw, when was the last time you put in a tender for some commercial work in a non games field ? Out-sourcing has practically taken over so good look on that one, and this fact is also why most internal developers don't earn a fraction of what they did in the 80's and 90's. I know a couple of guys working on 3D engines for a satnav company and I earn more than both of them. (And I take a realtively low wage)

If all you really want is money, don't switch to non-game development, study a law degree. Being a tax lawyer is just as dull as database dev but it pays a boatload more money.

[Sysiphus]

I think the vast majority of game development employees are chumps, frankly. They work long hours for not that much money

...yup, been one of 'em...problem is, the ones staying still keep thinking they're soldiers in an army, and earning low + giving away free extra hours is a matter of 'soldier honor'...

[Applewood]

Sorry guys, I keep forgetting I'm an idiot and my employees are all chumps with no self worth and the projects I work on are all shite because a publisher publishes them.

I've had a change of heart, I'm going to sell my commercial grind-house, put all my employees on the street with no warning like I'm meant to, and then go find a way to pay my mortgage on 10 pence per week like indies who have all the answers make...

[bvanevery]

I'm seriously sick of this one keep cropping up again and again about how you can earn more away from games, but what point is it again you are making about non-competes ?

The point is that if you're accepting non-compete clauses to be an employee when you could be out billing clients at $75..$250/hour as a contractor for essentially the same work, you're a dummy. Especially when you've gotten really good at something during your last few years as an employee, but now you can't strike out on your own with those skills, because you were foolish enough to sign these non-compete clauses that extend after your term of employ.

There are simple remedies for this. You can refuse to sign them in the 1st place. Or make sure you're in a jurisdiction where they're illegal. Or negotiate them so they're narrowly defined and won't encumber any reasonable interest of yours that you can forsee. You're better off making sure no one has such a legal hold over you, however. Not unless they're paying you top dollar to have that kind of hold.

And btw, when was the last time you put in a tender for some commercial work in a non games field ?

I'm making the big $$$$$ just fine as a consultant right now. This is a good economy. Find clients who have money and jump on it while it lasts, that's all I can say.

Out-sourcing has practically taken over so good look on that one, and this fact is also why most internal developers don't earn a fraction of what they did in the 80's and 90's. I know a couple of guys working on 3D engines for a satnav company and I earn more than both of them. (And I take a realtively low wage)

But if you believe a bunch of gloom and doom about how you can't get paid properly, you won't. You must have a willingness to say, "I deserve to be paid well, and I'm going to do what it takes to get paid well."

If all you really want is money, don't switch to non-game development, study a law degree. Being a tax lawyer is just as dull as database dev but it pays a boatload more money.

There's plenty of money in non-game development and game-related development. There's jobs at places like NVIDIA paying $90K..$140K/year and that's public knowledge, nothing remotely tricky about finding such gigs. You don't need a law degree, just go do those databases for a law firm.

The question any game company employee should be asking is, "Is what I do really more exciting than a non-game job?" If you look at what you actually do on any given day, can you tell that you're actually working on a game? If "yes" then you're fine, be happy with where you're at. If "no," if you're basically doing a form of technical gruntwork common to every 3d app out there and not getting paid very much for the trouble, then go find an employer or client worthy of your skills.

[bvanevery]

Sorry guys, I keep forgetting I'm an idiot and my employees are all chumps with no self worth

Well you'd better keep an eye on whether your most skilled and talented employees are happy about what they're working on. 'Cuz if they've got the skills, they don't inherently need you. They can and do move on.

[HairyTroll]

The point is that if you're accepting non-compete clauses to be an employee when you could be out billing clients at $75..$250/hour as a contractor for essentially the same work, you're a dummy.

I have done both. I used to be a consultant earning $120 an hour (post .com boom), pulling in almost $20k a month. I earn substantially less now that I am a salaried employee but I prefer it. Corporate health insurance, company matching 401k's, working with decent and knowledgeable people all day long.

When you are a consultant or a contractor half your time is always spent trying to line up that next gig. This becomes quite stressful if you have responsibilities (mortgage, car payments, wife and kids).

As a consultant or contractor you are now responsible for all your own taxes - filing quarterly instead of yearly... filing estimated taxes. In additional you are taxed more on the money you earn.

I'm making the big $$$$$ just fine as a consultant right now. This is a good economy. Find clients who have money and jump on it while it lasts, that's all I can say.

What when there is a downturn? Have you looked at the market lately? Sub-prime lenders are imploding and the Fed is having to inject billions into the market to put the breaks on a credit meltdown. Your good economy may not last that much longer. And the first people to cut are always the consultants/contractors - no matter how good you are.

Oh yes, non-competes. I signed one. Mine states that as long as what I do on my own time does not complete or interfere with my stated employment responsibilities then I can do what I want - even running a company of my own. I don't work in the game industry.

[Applewood]

But if you believe a bunch of gloom and doom about how you can't get paid properly, you won't.It's the same bs I keep hearing about how game programmers earn fuck all so I figured why not. :)

I've been a contractor before for several years. I gave it up mainly because I got sick of doing all the shit jobs they didn't want to do in-house, and finding new work was always a worry even though I never actually went without, thank god. My take on the whole experience is exactly the same as Hairy Troll. I'm glad I did it, but no longer want to make a career out of it.

[Applewood]

Well you'd better keep an eye on whether your most skilled and talented employees are happy about what they're working on. 'Cuz if they've got the skills, they don't inherently need you.I think we've established already that I'm an employer so am therefore surplus to requirements and inherently evil. Muhahahaha, must get back to whipping my grads....

[bvanevery]

I have done both. I used to be a consultant earning $120 an hour (post .com boom), pulling in almost $20k a month. I earn substantially less now that I am a salaried employee but I prefer it. Corporate health insurance, company matching 401k's, working with decent and knowledgeable people all day long.

Consultant math is 2x to 2.5x employee math because they have to pay their own taxes, equipment overheads, health insurance, 401k, etc. So $120/hour as a consultant is worth $50..$60/hour as an employee. If that's what you're getting from your current employer then you're not earning any less. If you are getting less, then you've made a choice about your preferred work environment. Possibly also stability if the company is untroubled by the winds of economic fortune. But not necessarily, as companies downsize too.

When you are a consultant or a contractor half your time is always spent trying to line up that next gig.

You're going to spend time, which is part of why you have to bill higher than an employee. But if you're spending literally half your time on it, then that's clearly a place to improve your business model.

This becomes quite stressful if you have responsibilities (mortgage, car payments, wife and kids).

Yep, added overheads are stress. Currently I endeavor to keep my overheads low. For instance, I moved from Seattle, WA to Winston-Salem, NC. People like Seattle too much, prices for everything just keep going up. I don't see what the big whoop is, my life revolves around my computer and my dog. I lived in Seattle for 11 years and just didn't find myself taking much advantage of it. So I burbed myself out in the sticks. I was doing that in Spokane, WA before anyways, and I have family in Winston-Salem. So for me currently, it's a win.

Working 50..70 hour weeks for some stupid game outfit and not getting paid very much is stress too. People have a lot of choices about what kind of stress they're willing to put up with.

What when there is a downturn?

Employers lay people off too you know. In fact, a common consulting pattern is when the employer foolishly lays off the wrong people, then realize they don't actually have the skills they need to keep going, and now their former employees consult for them at greater cost than previously. Serves those stupid Dilberts right for trying to rake people over the coals. Anyways you have to stay one step ahead of employers. There's no cradle to grave security anywhere anymore.

[Qitsune]

I believe it was the Splinter Cell team. I heard that once they got to EA, they were split up. It was a big marketing ploy to steal members of one of Ubi's top teams. But, those were middle-level developers. The top developers and the design team are still at Ubi.

Fun stuff:
http://www.daledietrich.com/gaming/category/cases/non-compete-cases/