Asked to Sign Non-Compete for Internship

[Beansofham]

Jurisdiction

Utah

I started my internship with a software company with no mention of signing a non-compete agreement. Now, on my third week in, being unemployed and only offered a tiny stipend at the end of the internship with no promise of employment at the end of it, I am now being asked to sign a non-compete clause. I've never gone through H.R. and they don't even have copies of my birth certificate, I.D., or information regarding my SSN or anything else.

Can they really require me to sign a non-compete agreement without employing me on grounds of the internship in the State of Utah? Even if I were to, if they never actually employ me at the end of the internship, would it be legally binding?

Alternatively, if I refuse to sign the non-compete agreement on grounds of being both unemployed and being on a internship with the company, might they still be able to legally come at me should I compete as the result of them ending the internship prematurely but having "secrets" despite none of their strategies being secret in the industry SEO industry? Or would the common place knowledge be irrelevant since it's not technically "common knowledge" to the public outside of the industry and thus enforceable as 'trade secrets?" If this is too in-depth of a question to really say, I completely understand.

Thanks in advance!

 

[zddoodah]

Can they really require me to sign a non-compete agreement without employing me on grounds of the internship in the State of Utah?

I'm not entirely sure what some of this means. However, absent a contract that says otherwise, your employer may legally terminate your employment if you don't sign.

Even if I were to, if they never actually employ me at the end of the internship, would it be legally binding?

No reason in the abstract to think it wouldn't.

if I refuse to sign the non-compete agreement on grounds of being both unemployed and being on a internship with the company, might they still be able to legally come at me should I compete as the result of them ending the internship prematurely but having "secrets" despite none of their strategies being secret in the industry SEO industry?

I don't think anyone here is in a position to speculate intelligently about hypothetical scenarios that might or might not come to pass. That said, the burden of proving that a trade secret is actually a secret falls to the party claiming the secret.

 

[Tax Counsel]

Can they really require me to sign a non-compete agreement without employing me on grounds of the internship in the State of Utah? Even if I were to, if they never actually employ me at the end of the internship, would it be legally binding?

The company cannot make you sign the noncompete. That's up to you. If it is a requirement for a new job offer, then you may have to make a choice between signing it or losing the job. I'd suggest you take a copy of the proposed agreement to an employment law attorney for some advice. In general noncompete agreements are disfavored in the law, and thus the agreement will have to meet certain conditions to be enforceable.

If it's a noncompete agreement to cover the internship that just ended then the employer is pretty much out of luck if you refuse to sign it since the employer has provided no consideration to you in exchange for that agreement.

 

[cbg]

Is it actually a non-compete you are being asked to sign, or a non-disclosure? They are NOT the same thing, and if the concern is trade secrets, a non-disclosure is much more likely. Non-disclosures are in general much less limiting than non-competes.

 

[adjusterjack]

As a one-time (long ago) victim of a non-compete, non-disclosure, non-solicitation, whatever, agreement, my advice is don't sign it.

Those things can make you unemployable.

And while they are "disfavored" by courts you aren't likely going to have the money for an attorney to defend you when your future former employer sues you for an alleged breach.

 

[cbg]

Non-compete: I agree not to work for competitors, defined as x, for y period of time.
Non-disclosure: I agree not to tell the employer's competitors things about their operation that they don't want made public

Not at all the same thing, and while I agree that non-competes are generally disfavored (and in some states are downright illegal) a non-disclosure is a whole different ball of wax.

 

[Beansofham]

Thank you all for your replies. All of your feedback has been beneficial to me and is appreciated.

I'm seeing it is a "combined contract." The title of the document says:

NON-DISCLOSURE / NON-COMPETE / CONFIDENTIALITY AGREEMENT

However, I did notice it doesn't say the company's previous, or current rebranded name anywhere on the 8 page document. I can't find any company name on here whatsoever, to be exact. There is a empty space for the company name at the very end of the agreement but is entirely blank. I don't know if this matters or not in this instance.

While I still have roughly another 290 hours to go for the completion of the internship (for a measly $1,700 stipend at the end of the complete 350/hr period), I'm not too concerned about being removed from this program for not signing the agreement. It feels mighty unfair to me that they never mentioned it until yesterday, can't even promise to hire me towards the end of the internship and be expected not to use what they're teaching me (which is building websites, creating HTML/CSS/ input forms for WordPress sites with back-end PHP and SQL database to get it all working, building WordPress plugins, learning and using both JavaScript & AJAX all for increased website usability and more. I honestly care less about their SEO "secrets" but it doesn't define what industry or market I'd be restricted from for the year-long period of the non-compete. I'm only learning how to code for Christ sake. I guess I'm just complaining. I feel like the agreement is lacking so much, much-needed detail. But I don't understand the law. That's why I'm here learning what you kind and generous folks have to share to dumber people like me.

I do think this is complete bologna that they've suddenly decided to throw this on me unexpectedly like this when they don't even have me doing SEO. The SEO content writers for blogs do work right next to me but everything I've ever heard them talk about has been talked about on the news and overly marketed about via web design articles and more over the years. But, I now understand it's up to the employer to prove it's "worth" as far as a company secret goes I guess.

When reading the agreement, it feels an awful lot like a copy & paste. I'd share with you guys as I've never seen a agreement as odd as this one but I can't seem to find a way to remove the DocuSign Envelope ID to keep this from tracing back to me.

 

[adjusterjack]

However, I did notice it doesn't say the company's previous, or current rebranded name anywhere on the 8 page document. I can't find any company name on here whatsoever, to be exact. There is a empty space for the company name at the very end of the agreement but is entirely blank. I don't know if this matters or not in this instance.

It matters a lot. Never sign any contract that has blank spaces. They can be filled in later to your detriment.

a measly $1,700 stipend at the end of the complete 350/hr period

Read this fact sheet from the US DOL. See #1. That "stipend" may make you an employee entitled to minimum hourly wages and overtime.

Fact Sheet #71: Internship Programs Under The Fair Labor Standards Act | U.S. Department of Labor

I think your "employer" is pulling a fast one (well, more than one).

That's why I'm here learning what you kind and generous folks have to share to dumber people like me.

You're way ahead of the people who come here after they get themselves in trouble.

 

[Beansofham]

It matters a lot. Never sign any contract that has blank spaces. They can be filled in later to your detriment.

Yeah. They're heavily insisting that I first sign it and that they will then fill in the blanks afterwards. I'm not signing this thing. Haha

Read this fact sheet from the US DOL. See #1. That "stipend" may make you an employee entitled to minimum hourly wages and overtime.

Fact Sheet #71: Internship Programs Under The Fair Labor Standards Act | U.S. Department of Labor

I think your "employer" is pulling a fast one (well, more than one).

You're right on point. It's looking like 5 out of 7 of those listed directly apply to all of the interns at the unnamed company; myself included. At least with what was mentioned is to be expected of the internship in the interview which takes place before starting our roles.

How it's set up is that there is the president, vice-present, a lead developer and a lead content writer. Everyone else are interns just for them to save a butt-load of money. Haha

 

[Beansofham]

As an update, they went ahead and terminated me immediately, despite having access to the AWS server and still not being able to accurately report my worked times on the ADP tracking system as management never bothered granted me access. I wasn't even able to submit my finished work onto the server before getting kicked out.

Before being immediately terminated for being hesitant to sign the non-compete agreement as it is, they never even bothered to have me sign a confidentiality or a non-disclosure agreement since the non-compete was just too unreasonable for me. I even stated "I am more than happy to sign the confidentiality and non-disclosure agreements even if this doesn't work out for the both of us." While I was not only told that their process is to first have us all sign the blank agreement only for them to fill in the blanks afterwards, but that I would have to have every single company I worked with for their website to first be approved through the Vice President (under the non-compete), to make sure they were neither existing clients, nor competitors to their existing clients, for the full year. Naturally, this still greatly limits and burdens my ability to work in the field of web development and coding. When expressing that I didn't feel right with the unfairness of signing this as this is what they were teaching me to do, I was merely reassured that I would not be able to work on websites if I had signed the non-compete (as "marketing software is a restricted territory") and followed up with immediately terminating me without any hint that they questioned their own conscience in the matter. Which is fine with me.

I am not scared, but rather feel empowered from this. They attempted to set me up to fail and it didn't work. When they tried pressuring me, I questioned what I have reason to take issue with the non-compete and signing a blank agreement and was terminated as the result.

Now, I am incorporating web design into my side business. I can not only make and style websites, I can apply SEO from my previous work experience and update that with the times, while also being able to create databases while linking them with login forms, with a cookie session, and other useful skills too. I've learned a lot and will use this to my advantage. Had I allowed myself to be suckered in to that non-compete, it wouldn't been a big mistake. I owe you guys my gratitude for this successful outcome for me.

While I have the money to hire on workers, I am not going to steal their workers. or their clients as I believe that'd be a scummy thing to do. I'm not even going to go after any high-paying clients as they are so they'll be unaffected competitively; at least for now as I believe any fellow of good conscience would reason. But, I have been wondering, if I share this unsigned agreement to expose it and the so-far unmentioned company for taking unfair advantage of interns in so many ways, is it something that I might get into trouble over down the road with DocuSign considering it has the ID # that can be tracked back to me, and in how I believe this agreement does fall under as a legal document?

You guys have all been a BIG help! Thank you for everything.

 

[Zigner]

But, I was wondering, if I share this unsigned agreement to expose it and the so-far unmentioned company for taking unfair advantage of interns in so many ways, is it something that I might get into trouble over down the road with DocuSign considering it has the ID # that can be tracked back to me?

There are many downsides to sharing it and no upsides. Don't share it.