The Proper Mindset For Negotiation of a Programmer’s Employment Contract

August 09, 2016

The Power of No: The Proper Mindset For Negotiation of an Employment Contract

Shaking hands with a euro bill in between

I’m fortunate that I was able to get multiple programming job offers after my first programming job. I joked with my relative that I finally understood what it was like to be a “pretty girl”. They joked that my new nickname was “Pretty” and soon started addressing me as such.

Being able to say “no” really gives you leverage (or at least a big confidence boost) in negotations.

My negotiation situation

Back in the day, I quit my full-time engineering job with a plan to launch a software as a service product (SaaS). I reasoned that if I failed, I would get into programming. To make a long story short: I failed to get a SaaS off the ground. So I started trying to freelance. Not knowing enough about marketing, positioning, and branding (and being fairly new to coding professionally), I still managed to land some freelance gigs.

Eventually, I decided that I would try going back to full-time office work. So I got a job as a programmer in a humdrum office. I had a manager without a programming and/or technical background and it was big company politics all over again. I realized that for me to keep growing as a programmer, I would need to find a place that had a good programming culture and where people could grow their skills with interesting projects.

This of course meant finding a new job. I sent out applications, and eventually heard back from a few companies. Finally, a company (let’s call them Company X) that seemed like a great fit came along and I was prepared to sign on the dotted line. But first, we had to negotiate….[drumroll please]……the employment contract.

The deal breaker clauses and why I walked away from Company X

  • 2 year non-compete – So there was a clause that forbid me from working for a company in the same space for up to 2 years without Company X’s consent. This meant if I got fired or left for whatever reason, I would still need to permission to earn a living even if the only job I could find was with a potential competitor or client of the company’s. Ridiculous. And Joel Spolsky of Stackoverflow fame thinks so too.

I could see this being a problem if I wanted to work with another great programmer(s) at a company in a competing space. I’d effectively be trading away long-term growth and development. That’s not a good position to be in if you can help it.

  • 1 year blanket IP clause with a burden of proof on me to prove I didn’t come up with the IP on work time – On the off-chance Company X let me go and I came up with some amazing IP that greatly enhanced my net worth (i.e., “get filthy rich”), if Company X came after me legally, I would have to prove that I didn’t use company materials or time to come up with it. It could have been a potentially big headache.

How I overcame my fears and walked away from Company X

Seeing as how I wasn’t very experienced at negotiating at this point, how did I overcome my fear that “this may be the only good job offer I get?” Well truth be told, I did have other offers to fall back on. But even if I didn’t, I still would have done (and in fact did do) all of the following.

  • Talked to others with more experience – The first thing I did was research online to see what the issues were. It turns out California has much better protections for employees than other states (such as the one Company X was based in). For example, there’s no such thing as a non-compete clause in California. Fortunately, I also had a relative in the software industry who had been doing it for much longer than I have. He pointed out that in the worst case, it’s against the law for someone to try and prevent you from making an honest living. A friend also pointed out that the worst case was a very unlikely outcome.
  • Had gotten other offers – Of course, one big relief is if you have multiple offers to choose from. Then perhaps you can negotiate these career killing clauses out of your contract. Unfortunately, even with other offers I couldn’t get rid of theses clauses. I also wasn’t that great at negotiating at this point, so that may have been another contributing factor.
  • Prepared to stay at my current job for a while longer – I was also prepared to stay at my current job and wait it out until I could get a satisfactory offer. I liked my team members, and so even though I felt like I couldn’t grow anymore, the situation was still tolerable.
  • Large savings cushion – It’s always easier to get a job when you have a job, at least in the United States. But in the worst case, a large savings cushion (I preach one year of living expenses before you quit, but if you’re an in-demand tech worker, you can probably get away with less saved up) can help you quit your job right away if it’s an emergency. Since I had a large savings cushion, I felt pretty confident that even if I got laid off at my current company, I would be able to survive.
  • More preparation – My high school chemistry teacher always used to say “chance favors the prepared mind.” So I continued to prepare for programming interviews using resources like Cracking the Coding Interview.

But what if you have imminent financial issues?

Sometimes you just need the money. And that’s ok. You can probably sign a contract like Company X’s without damaging career repercussions. But having all of the above in place to allay your fears makes your position in the negotiation of the employment contract as strong as possible.

I will say that in my experience California employment contracts seem to be the most favorable right off the bat in terms of allowing employees to build their career without having to worry about restrictive clauses.

But what if you don’t have other offers and you need to find another job?

If you don’t have other offers, then of course the following applies:

  • Prepare a slimmer budget – Cutting back on spending is hugely helpful to help you have the necessary savings capital to take chances and really go after the job and/or career you want, even when you don’t necessarily have something lined up.
  • You may have to use it as an up and out job – If it’s your first or second job, you might have to look at the job as an up and out job and just deal with the contract’s terms.

Steps to overcome your fears

Here is a brief summary of steps you can take to make sure you have the strongest hand when negotiating an employment contract that helps you build a career in technology:

  • Talk to others with more experience in your field
  • Keep applying to increase your chance of multiple offers
  • Try to get as much as you can out of your current job with an eye towards being prepared for your next one
  • Save more for that rainy day!
  • Prepare by reading Cracking the Coding Interview.