Obie Fernandez

BizConf Venue Teaser

BizConf Venue Teaser from Hashrocket on Vimeo

IP and Non-Competes for Employees

Got the following email the other day, concerning intellectual property issues and non-compete agreements:

I was wondering how Hashrocket handles intellectual property and non-competes with its employees.  Is it something that your developers are required to sign as a new employee?

I ask because I got into a deep discussion with my boss about this.  The employee agreement he came up with basically says that he owns any software / web related intellectual property that I work on (on and OFF the clock).  The non-compete section says that I can't start my own business or work for another firm in the same or surrounding states.

I have an issue with him owning the intellectual property for work I do off the clock.  It makes me less motivated to learn and be innovative when I'm tinkering around on my own. I have my pet projects that I don't want him to have any part in.  His argument is that he doesn't want his employees using company resources (software and laptops) to start their own business... which gets into the non-compete.

The answer is an emphatic "NO!" I do not require non-compete agreements to be signed by new hires at Hashrocket. Neither do I try to claim ownership of work that they do off the clock (open or closed source), a practice I learned from and admired at my former employer, ThoughtWorks.

Work done on the clock is a different story. We have the notion of chartered projects, internal initiatives which you are paid to work on for at most 5 hours per week or when paying client work is not available. If I'm paying someone to work on something then Hashrocket owns it, end of story. Actually, there could be some gray areas there, like bringing interesting outside projects in-house in order to make more progress on them, but in that case reasonableness is key.

Anyway, a non-compete agreement (or non-compete clause in a larger contract) restricts employees from engaging in similar work after leaving your firm. I didn't like them as an employee and I don't like them as an employer either, because I think they're fundamentally unfair. If as the owner of the firm I'm insecure about my people leaving and competing with me, then I'm doing it wrong. Keeping my people from being innovative on and off the job is exactly the opposite of what I need to be doing.

The rationale that your boss used with you, that he "doesn't want his employees using company resources (software and laptops) to start their own business", is IMO such a cynical asshole thing to say to anyone. I've heard it before, and it always pisses me off. The thought process doesn't come up at Hashrocket because I require my people to buy and maintain their own computers. Professional craftsmen have their own tools, yada, yada... that's the subject for a different blog post.

And paid software? Really? What do we actually use for Rails development that costs money? Texmate? (Use vim to solve that problem.) I guess Adobe products are a notable exception there, but I still can't bring myself to look at the situation with such shortsightedness as to try and prevent someone from using tools that I purchased for them to further their career. I just realized why that is -- I see my mission as their "boss" to help further their career! (The rewards from treating your employees this way are immeasurable.)

Incidentally, non-compete agreements are not enforceable in California, but elsewhere in the USA they are legally binding, so you should be very careful signing anything with a non-compete clause.

My suggestion to people presented with non-compete clauses in their offer letters or as part of agreements signed post-hiring, is to strike the offending clause from the contract and initial the change. Do that or refuse to sign the agreement altogether. Yes, it takes chutzpah to do what I'm suggesting, but c'mon now... you shouldn't kick off your new job by bending over and taking the corporate shafting from day one. Given the time and expense needed to find qualified hires nowadays, after some initial fussiness from HR or the hiring manager, the whole matter will be forgotten. If they try to force you to sign under threat of termination then you really should be evaluating whether you wanted the job in the first place. Seriously.

I do believe in a particular type of informal non-compete agreement, which I make verbally with all my people. I ask my people to refrain from "moonlighting" (doing side work) of the same type that they do during the day at Hashrocket. As an employer, you should do that too, but only if you pay competitively!

I can't forcefully prevent my people from moonlighting, but I discourage it strongly for one simple reason: burnout risk. Rocketeers work very hard every single day of every single week, putting in 35-40 hours per week doing intense pair-programming. I want them to go home and relax, so that they're fresh the next morning. Think that's an unreasonable request? Don't come work for me.

On a final note, I think it's a good idea, as a company that sponsors open-source projects and encourages open-source work on the clock, to have signed contributor agreements from all employees. I haven't done this at Hashrocket but I'm going to look into it soon.

Announcing BizConf

BizConf is a one-of-a-kind, exclusive event that I am hosting about 3 months from now at the Ritz-Carlton Amelia Island Resort in northern Florida. It's a 2-day conference specifically crafted for independent consultants and owners/managers of small to mid-sized web consultancies.

Conference Website: http://bizconf.org

Summary

The conference program is on Thursday and Friday (Aug 20-21, 2009) and the Ritz-Carlton is offering steep discounts on their room rates for up to 3 days before and after the conference. This is a perfect opportunity to turn a "business" trip into a vacation (or golf) getaway with friends and family. I selected the venue particularly because of the luxurious rooms, restaurants and spa, and its location on some of Florida's finest white-powder beachfront and warm, sparkling blue ocean. Amelia Island is conveniently about 30 minutes drive east of Jacksonville airport (JAX) and local transportation can be arranged through the conference.

Check out some more photos of the Ritz-Carlton Amelia Island by Josh Hallett. It is a beautiful and luxurious hotel and we're making the most of it. All meals are included in your conference registration, from special catered breakfasts in SALT Restaurant to the Friday night private dinner and pool party at the Spa. 

Registration is limited to 75 people in order to keep the event intimate and maximize interaction between our presenters and attendees. We have over 20 compelling presenters confirmed so far, with additional announcements happening soon. The program is divided into plenary sessions for everyone in the main room and three breakout session tracks in small conference rooms. Some have questioned the decision to do 4 tracks for such a small conference. The answer is that we will be covering a wide variety of topics, from marketing, to team building, to legal/finance issues, to product development and client services. Attendees will be able to select a mix of topics that suits their exact needs and receive personal attention from the presenters, while still having ample opportunities for networking and creating new friendships in our industry niche.

Presenters

The following list only skims the surface of who you can expect to meet and learn from at BizConf:

Jerry Weinberg is one of my heroes. He has over 30 years of consulting experience and has written many notable books including "The Secrets of Consulting" and "The Psychology of Computer Programming". He will be presenting small group experiential sessions including "Learning to Say No" and "Great Client Expectations".

Roy Singham, my friend and mentor, will be keynoting and spending one-on-one time with attendees. Roy famously grew his tiny Chicago-based consultancy into world-class software consulting powerhouse ThoughtWorks, admirably working to make positive change in the world every step of the way. Martin Fowler has written about Roy on his blog.

Esther Derby and Johanna Rothman are esteemed trainers and co-authors of the Pragmatic's Behind Closed Doors: Secrets of Great Management among other titles. They will be very busy at BizConf with sessions topics including:

• Recruiting and Keeping Talent Happy
• Leveraging Personal Sources of Power
• Levers for Change
• Interviewing Customers

Don Gray coaches software development organizations to higher levels of productivity. His background in machine and process automation provides the foundation for working with organizational systems and change. His workshops at BizConf will focus on personality types and teamwork, team productivity, and retrospectives.

Ian McFarland, Principal at the esteemed San Francisco-based consultancy Pivotal Labs will present a new model for selling a potent mix of Agile, Ruby on Rails and cloud-computing to CIOs and CTOs in the enterprise world. Ian was a special guest on the Rails Podcast last year.

Corey Haines is one of the warmest, most genuine voices of the Software Craftmanship movement. He is rapidly gaining friends and notoriety from his travel around the world as the wandering journeyman software craftman, sharing programming language with technology professionals in exchange for room and board.

James Duncan Davidson will provide attendees that bring their own DSLRs with a unique opportunity to learn photography from a master of the craft. Learn how to maximize your marketing with candid shots of your people in action.

Jessie Shternshus is founder and owner of The Improv Effect and has worked with companies such as CBS, Paramount Pictures, MTV and Sesame Workshop. Jessie merges her lifelong passion and expertise of improvisational acting with the fast paced demands of the corporate world. In her classes and workshops she helps people become better listeners, team players, leaders and communicators. Her physically engaging and playful workshops are relevant to all facets of life and are sure to be a fun highlight for BizConf participants.

The complete list of speakers is here, although I expect to add a few more to it in the coming weeks. This conference is very personal to me -- I am handcrafting the program to maximize the interest to other people like myself: entrepreneurs in the web development space, particularly my peers running successful Rails consultancy shops.

Price

If you register before July 17th you can take advantage of the early-bird pricing of $1995. After that, the price goes up to $2495. Yes, I know very well that the cost is out of reach of some of you reading this. However, it's an upscale and exclusive event on purpose and I decided on that price based on market research. Also, running a conference like BizConf is quite expensive and entails a great deal of financial risk for the organizers. The venue and food is very expensive, as well as travel expenses for all of the speakers.

Sponsors

I want to take a moment to thank my partners at Hashrocket, as well as our other sponsors: nGen Works and Engine Yard for helping to make this dream a reality.

If you work for a product firm that provides services to small to mid-sized service providers, then BizConf is the perfect opportunity for you to get to know the most successful influencers in this business. Check out our sponsor prospectus for more information.