Non-compete for RE Dev Associate?
Hey Guys,
Just received an offer for an associate position with a regional developer. Everything looks good, but they want me to sign a non-compete that prevents me from working for any RE company that develops in any of their markets (basically any sizable RE firm within several states). The non-compete would last for several years after leaving the company.
Anyone ever heard of this for RE? In a scenario where things didn't work out and I voluntarily leave after 2 years, could they actually enforce this and screw me over? Does the non-compete still apply if I get laid off? Thanks in advance for any help.
I wouldn't sign it, thats pretty strict. I've signed non competes saying I wouldn't take clients or confidential information with me if I left but I could've worked for any company.
I'd talk to an attorney about it, to be honest. It seems...extreme...and they could certainly enforce it as they certainly have an attorney on retainer. What if you take this job and hate it? Or it isn't a good fit with the people? Or 5-10 years from now you want to move on for a better position or open your own shop? If you want to leave and have to move across the country for real estate you lose all of your connections in a connection based business, not to mention your market expertise.
My first response would be "fuck no I'm not signing this" but I do understand that you want and might need this job also. Do you have a job currently? Do you have other offers?
10/10 would not sign. sounds ludicrous.
No way. That's basically saying "I'll never work for another real estate company again". It feels like a life contract. Too strict. Did you read it correctly?
To me this is an indication that they're not a bright bunch. What are they scared of? You going to a rival shop and outperforming them? You starting your own firm and outperforming them? Do you think Hines cares if an analyst/associate leaves to another firm that will directly compete with them? No. RE investors should know what they're doing and believe they have a unique vision that gives them a competitive advantage. A good shop shouldn't care if you leave - especially at the junior level.
With that being said, the decision is ultimately yours. It may take you a few more weeks (if not months) to land a new offer (even if you're in NYC, Chicago, etc.). Right now you should check their portfolio and figure out what markets you're forbidden from. Make a decision based on that?
If you work at a highly entrepreneurial shop where guys at the associate/VP level have the capacity to leave and compete with them right away, its not uncommon.
If you have other holdings/sites that could potentially be competitive, I would disclose these and then push back on the terms of the non-compete (i.e. geographic, timing, project type) limitations. 2 years is a long time, don't let them restrict your future.
Thanks for the feedback everyone. I have a good gig now but have been looking to make the jump over to a development shop.
I'm not misreading and the scope of the non-compete is that outrageous. I suspect they could be viewing it as a negotiation point and expect me to push back, so they started with their strongest position. In any case, looks like I'll have to get a lawyer to take a look. Just can't imagine that scope is enforceable, not to mention they would have to prove there is some type of proprietary info unique to them that I poached. This is RE, not cutting edge tech, what R&D could I possibly steal (aside from a rolodex which is an obvious no no)?
If you're not worried about putting food on the table or paying rent, I would take a long hard look at the company in general. If they're already doing things like this...
True that. I guess they're happy hiring people with no other options...
Was the interview process grueling at all? How did you source the position? How long was the total interview process altogether?
Curious
Phone interview, work samples, in-person w/ supervisor, modeling test, and all day with senior team. Heard about it through a recruiter. Process took about a month.
It's an outrageous demand. I'm struggling to think of a dollar amount that would make me feel ok with signing away my ability to earn a living in the future.
As everyone else has mentioned, this is ridiculous. I wouldn't sign. The only non-competes you should be signing at that position is one that restricts you from taking client/investor information. Even CEOs of Fortune 500s have non-competes, and in their cases I think they are only like a year or two long if they plan on going to a competitor. So the fact that a real estate development company is saying several years for an associate shows that this isn't a company you want to work for.
What state are you in? Look up the rules for your state. For example if you're in CA feel free to sign it because it's not legal and unenforceable.
It's ridiculous but just says you'd be happy to not work for two years as long as they compensate you for it. Like others have stated, talk to a lawyer.
how could this be enforced anyway. I say sign and don't honor if it comes down to it
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