In a leaked memo, Shopify CEO Tobi Lütke put limits on employees having side hustles, saying Shopify requires ‘unshared attention’::Shopify CEO Tobi Lütke discourages employees from side hustles in company memo, saying their jobs require their undivided attention.
So I heard lots of frustration in comments around the concept but little commentary on the legality of it. Not a lawyer but do have extensive experience in HR and employment law:
Companies can put anything they want in a policy. That policy may or may not be legal. A policy that is not legal may open up lawsuit opportunities against the employer, but because most violated employees simply complain on message boards on the Internet instead of learning their rights, the policies and violations continue.
In this case, it has been well established that companies cannot limit your employment opportunities outside of work, unless you have a contract that specifically includes it AND you are provided consideration (payment or something of value in a legal contract) for this concession. You can be legally and simply terminated if you are doing non-company work on a company device, if your performance is not meeting standards, or if there are any conflicts between your employer and your other jobs, hobbies, etc.
There have been a lot of cases and laws in the last 5 years massively limiting the scope (because employers will always push any advantage as far as they can until they are regulated, legislated or outlawed) of “non-compete” clauses in job offers and policies. 10 years ago every employer was throwing these into employment contracts, some employees called them on their bullshit and now you don’t see them as often–but there are definitely still companies (especially small or new) who don’t have anyone who knows what is legal in this area and just make shit up. The only real holding power a non-compete has is if you have mission-critical information or trade secrets and again they must then receive consideration/payment for this concession of their ability to earn income elsewhere --and 99.9% of employees outside of C-suite don’t.
If you’re interested in learning more about employment law, trends, or have questions, check out my new community I created last week “Ask HR”:
https://lemmy.world/c/ask_hr
Most non-competes I’ve seen in the wild (when I was an HR, as well as in operations) have been pretty specific about the type of baned competing work as well. It’s less often you can’t work for our direct competition if offered a job and more you can’t start a company as direct competition and you can try to steal our employees for X amount of time. It’s rarely (because it likely unenforceable legally) you can’t do any other work.
Yes, this makes sense, and again I’ll emphasize anyone can put in a policy “oh you can’t start a competing company” but there is a damn high threshold 99.9% of employees don’t meet for this to be enforceable. It would be enforceable ina situation where you’re very high up with strategic knowledge or information about the company or market that isn’t public and you leave the company to try to capitalize on that information using the information you gained during your time at the company. Most people can agree that would be abuse of the company, but even then it can be challenging to prove in some situations.
Long of the short, most of these are unenforceable too unless you’re in certain, strategic, leadership or mission critical areas of an org. The smaller the org the more potential you could actually be part of this group but it’s on the employer to prove it, and again, you need to be compensated for it. They want to say you can’t work for or start a competitor for a year? Cool, an enforceable agreement would be they pay you a year’s wages on termination. If you aren’t in that kind of a situation, it’s people making stuff up and hoping to scare the labor market.
I signed a non-compete when starting a new job after researching and finding out it wasn’t enforceable in my state (they’re illegal).
Yep. Largely unenforceable in all of Canada, and shopify is Canadian so they should know better.
A lot of it depends on where you live and how high up you are in the company too. If you’re a VP or a director, your expectations and legal burdens and considerations are often different from Bob Joe programmer or Larry the phone guy.
For example, in my province, non-competes were banned a couple years ago. I started work with an employer a year prior to that ban, and they had a stealth non-compete in my contract, but basically the rest of the contract was unenforceable anyways.
As always, it’s worth learning your rights and seeking legal advice prior to signing any legal agreements like contracts.