Ask HN: Opinions on Non-Compete Agreements in Small Startups?

[jimmy2020]

Hey everyone, I'm curious to hear your thoughts on signing non-compete agreements in small startups, especially when the contract doesn't include equity and is limited to just one year, while the non-compete agreement's duration is about 16 months. What's your take on this situation?

[JohnFen]

My policy is that I don't sign a noncompete for anyone. They serve no legitimate purpose. In at least a few US states, they aren't even legal. If you're in one of those, then it's a bit of a nonissue.

[jimmy2020]

I am outside the US, and they told me this is the common practice for startups now, and to be honest, I don't feel comfortable signing it.

[version_five]

I was asked to sign one once, I said no, and it turned out the startup had just got some standard contracts from someone and was using them because they had them, not because of some specific concern so they had no problem changing them to something mutually acceptable. Any company that won't do this is not worth working with.

[jimmy2020]

The original document initially mentioned the 'software industry' and I indicated that by signing it, I would be legally agreeing not to work in the software industry at all. They mentioned they would provide a more specific definition, but I still found it unusual. I understand signing an NDA, but a non-compete agreement feels more like giving them the right to sue me if they choose to.

[elamje]

It’s fine. Just make sure the scope is as narrow as possible. At my company, I signed one. But, before I did that I found 5 other companies that I would want to work at someday that are tangential to us and ran them by the founders for clearance.