contract advice

Hi all,

First time poster.. be gentle! :)

I've just been made an offer for a position at a local games studio (this'll be my first job in the industry, yay!). I'm very excited.. but I have a question about the contract (or about contracts in general, in the industry). It basically says that if my employment is terminated that I'm not allowed to work for another games company for six months. Is this pretty standard in the games industry? That seems pretty harsh; if your bread and butter is games then can they really stop you from working elsewhere in the industry?

cheers
sam.

unknownuser2's picture

I probably wouldnt be working for someone who included a clause like that in their contracts without a counter balancing 6 month termination notice clause in it.

From what I hear it is common [:O] - but it beats me why its in there, perhaps to lower poaching etc.

In any case, try on something like the following:

Suggest to them that if *they* terminate the contract then that clause is null & void. But if *you* resign the clause comes into effect from the day you resign, so effectively you can give 6 months notice and work where you want.

Regardless, you should think seriously about working for a company that is basically attempting to deny you your right to earn a living in your chosen profession.

/my two cents.

urgrund's picture

i've had contracts that have had 'innapropriate' clauses like that... one stated that I am not allowed to offer my services (this was a blanket definition of services... i couldn't mow someones lawn) whilst under this contract - even though it was a part-time thing.

Anyway, luckily we have a lawyer in the family who helped saying (very unprofessional) companies will copy/paste contract clauses as was the case here, not really understanding what it would mean to you if it were enforced. Often a (solicited) request for a change in a clause is met with no problems if its mutually beneficial. :)

mcdrewski's picture

ditto - my last company tried to get me to agree that all "knowledge gained" during my employment with them could not be used in any future employment. I'm a programmer, so that's a pretty broad brushstroke.

Their response when I pushed was that "everyone else has signed it", and so I simply crossed out that paragraph, initialled it and signed it without that clause.

I was fairly close to simply retyping the contract with a few of my own clauses and submitting it to see if they actually read it, but I thought that might be going just a bit too far. [:)]

It's just ludicrous what some contracts state. I have been told that these clauses preventing you working for another company are actually a "restriction of trade" and hence unenforcable, but it'd be much better to get it agreed before starting, since the courts to decide otherwise would be expensive.

bananaboy's picture

Thanks for the advice guys! I think I might see if I can get it changed..

cheers
sam.

bananaboy's picture

Hi guys,

Just thought I'd let you know that I spoke to the company and they were quite happy to change the contract to something more appropriate.

Games industry, here I come! :D

cheers
sam.

urgrund's picture

groovyone's picture

quote:It basically says that if my employment is terminated that I'm not allowed to work for another games company for six months

FOR anyone else in a similar situation as this.. and companies using clauses like this:

There's non-competition clauses, and then there's blatant black and white restrictions of "right to trade".

DO NOT ever sign a blatant black and white clause like this. It is actually illigal. A contract with a restriction of right to trade infringement will be deemed void in a court of law. Not to mention it being extremely un-professional and if not naive.

It's better to discuss what it is the comapany is really after and try to negotiate the points in the contract on what it is. Saying "this is our standard contract" is not good enough.

The whole thing about non-compeition is a very fuzzy area. Most companies are trying to stop competitors taking a large bunch of employees to go work on a similar product, or sequel to product. If you sign a clause like this it's better to ask the company to state their reasons in writing why this clause is in there, and have it signed. I am sure most companies would be professional enough that if you did leave for whatever reason and you just happened to apply for a job say in 5 months time for a new position, and it did infringe on the clause you signed, that they would not have any grudge and you would be allowed to work. HOWEVER, if they become nasty, then you can contest in court that they are restricting your right to earn a living if that is the only job available in your chosen profession (being the game industry as small as it is in Australia).

Infact, this whole non-competition stuff I have not seen anywhere else but the game industry. I'd be interested to know if other industries do this too.

Head-hunting is a recognized practice. I don't believe companies can enforce an employer not being able to accept an offer for a better salary or better job. Really it would be up to the employer to provide a counter offer to keep you at the company. I've worked in IT as a contractor and permanent employee for almost 9 years and I've been approached to leave a project and work for someone else. As a professional, my dedication is to the current project I am working on, I just raised it with my manager and they matched the other company's offer to keep me there. Everyone was happy. (well, except the other company who didn't get me).

When you sign an NDA - (this should always be a separate document to the main contract), it should protect the company you work for about trade secrets. As a professional you would not bring or disclose trade secrets to a new employer anyway.

Also you normally are required to give 4 weeks notice of termination. This should be enough protection for a company to find a replacement and transfer knowledge, though if you really are top notch, you may want to give the company a little extra time say 2 months to professionally tie up loose ends and ensure that your role on the project is satisfied by the replacement. The new company will and should respect this as a high level of professionalism.

Probation periods:

Employers usually like to give a probation period of 3-6 months to evaluate your suitability and performance in your role. However, a lot of people forget that this is also the opportunity for you to evaluate your employer and choose to stay or leave as well. If you don't fit in and don't want to work for an employer, DO NOT WAIT for 6 months to let them know, you will be wasting their time and yours. Let them know as early as possible you made the wrong choice.

mcdrewski's picture

quote:Originally posted by groovyone
DO NOT ever sign a blatant black and white clause like this. It is actually illigal. A contract with a restriction of right to trade infringement will be deemed void in a court of law. Not to mention it being extremely un-professional and if not naive.

Technically correct, but I bet the company has better lawyers and deeper pockets than you do. Taking this stuff to court would be enforcement enough in most cases.

quote:Originally posted by groovyone
Infact, this whole non-competition stuff I have not seen anywhere else but the game industry. I'd be interested to know if other industries do this too.

I can vouch that it occurs in other IT areas too. I "once heard a story" about a person who was applying for a job with a client of his current employer. However, in this case, the prospective employer also had a non-poaching clause with the guys curent employer, so penalties would have been applied between the companies without involving him at all if he had actually taken the job.

quote:Originally posted by groovyone
When you sign an NDA - (this should always be a separate document to the main contract), it should protect the company you work for about trade secrets. As a professional you would not bring or disclose trade secrets to a new employer anyway.

Of course not, but many NDAs are also written in overly restrictive terms and you should make sure you understand what rights you're being asked to give up.

quote:Originally posted by groovyone
Also you normally are required to give 4 weeks notice of termination.

In Australian industrial relations law (I believe), the notice period is the same as your pay period up to four weeks. ie: if you're paid weekly, your notice (and your company's notice to fire you too!) is one week. If you're paid monthly, it's four weeks, etc.

Specific employement contracts could override that if mutually agreed, but these would normally be in place for very senior positions only.

quote:Originally posted by groovyone
This should be enough protection for a company to find a replacement and transfer knowledge, though if you really are top notch, you may want to give the company a little extra time say 2 months to professionally tie up loose ends and ensure that your role on the project is satisfied by the replacement. The new company will and should respect this as a high level of professionalism.

Ahem. Yes. "respect" can sometimes be a bit of a dirty word when it comes to employment. Remember that this is a business relationship and that going above and beyond your legal obligations, while generous, is a choice that you make for your own reasons. Of course you wouldn't burn your bridges, but your employer also shouldn't expect anything more than the legal or contracted minimum (that's why the contract exists, after all!)

groovyone's picture

quote:
quote:Originally posted by groovyone
Infact, this whole non-competition stuff I have not seen anywhere else but the game industry. I'd be interested to know if other industries do this too.

I can vouch that it occurs in other IT areas too. I "once heard a story" about a person who was applying for a job with a client of his current employer. However, in this case, the prospective employer also had a non-poaching clause with the guys curent employer, so penalties would have been applied between the companies without involving him at all if he had actually taken the job.

Oops.. yes, sorry, this IS common practice in contracts for for contractors to stop poaching by clients. I suppose you need to read your contract carefully and see how deep a relationship with "clients" can go, you wouldn't want to be imposed from working for another company say 18 months down the track who is doing a project for a publisher/client of your current company. Specially what if your company is doing multiple projects for multiple publishers..

Then again, as I mentioned, the company is just trying to stop a lot of core people from leaving the company at the same time which would damage their contractual responsibilities to their client. Most would not have a problem and wouldn't enforce this part of the contract - AS long as you get it in writing when you leave the company!

I did 1 year of contract law at uni. It's all very interesting and complicated stuff.