I informed my manager in a high-tech company that I will resign and leave Japan. I am not in bad condition with my job and I leave for reasons mostly not related to this company. So my manager told me : “Ok, so you need to give your resignation letter (退職届) and oh there is also this pledge you need to sign. “
I have a look at the pledge and this is basically an extremely restrictive NDA document. I could have eventually considered signing in but there is also a non-competitive agreement inside! And once again, this is a very restrictive agreement in which I commit to not work for a competitor (not designed so this is legally very blur) for 2 years with no geographic limitation. Of course, this document comes with zero compensation to me. They just expect me to sign it and tell me “Well, dont worry too much, we won’t enforce it except if we feel you really go too far”.
So, my question is as follows : Can a company force me to sign anything that potentially involves my legal responsibility when I leave? Especially knowing they are not willing to give me any additional money for that?
32 comments
I would talk to the labor office
No, they cannot force you. Just say no.
(Even if you sign it, it is unlikely to be enforceable)
Don’t contact the labour office.
They can’t enforce it even if you sign, but I wouldn’t sign it anyway.
Bridgestone has non competes when high level people quit BUT the way they enforce it is with a work contract. The ex-employee is still paid (and with a massive raise), they pay a lump sum for the entire duration of the contract but the ex-employee is no longer asked to come to work. The ex-employee can technically resign from this “work contract” but then they have to do a pro rata refund of the lump sum.
I’m sure nobody ever broke those non competes because the pay is really massive so it’s highly unlikely any other company would offer a sign in bonus big enough to justify resigning and refunding the lump sum.
Either way, do not sign this contract, they can’t force you to do so. Even if they have no leverage and no way to enforce it, they could still be a pain in the butt to deal with later.
They want a 2 years non compete? Then they can pay you 5-10years of salary for it.
How does anyone “force” you to do anything?
Companies get you to do this before hiring you or have to bribe you with some kind of severance to get you to sign it going out the door.
I know people who have been handed the same piece of paper. They laughed on their way to the door.
Put a price on it.
2 years no geo limit? => max comp possible worldwide x2 + 50% for the inconvenience.
Lol. Tell him you also have a pledge for him to sign. They need to hang your portrait over the company entrance and bow in front of it before entering. Forever.
They can’t get you to sign anything *after* you joined the company. Zero legal authority.
No. But they may try to withhold salary in retaliation. Be prepared for that.
yeah they can’t force you. Sometimes these contracts are just repeating what’s in your original work contract, so check what your original work contract says (it might say exactly the same thing!) just to be aware, but… yeah.
say no. whats in it for you if you do and what are they gonna do if you dont, fire you? this is completely for their benefit. do not sign. they cant force you to do shit.
Non-compete clauses are typically *legal* to the extent during which you are employed. I.e. you can be prohibited from working for a competitor while you are employed.
The provisions of post employment non-compete clauses in Japan are not enforceable as they violate constitutional protections of freedom of employment (the contracts themselves aren’t illegal, but the provisions that violate the constitution and/or law are void).
The way I see it NDA’s are fair game. Like, corporate espionage is a thing, and things would go to shit if people just went to places learned their secrets and jumped ship to somewhere else effectively selling those secrets.
But non-competes are bullshit.
If you want to make them feel better about it offer to sign it without the non-compete. Say you’re happy to sign the NDA. But if they actually expect you to sign a non-compete they can kick rocks
Unless they can specify a law that requires you to sign, or a previous contract you have signed that states you will sign it, then I believe they are on thin ice.
You could also try to make a compromise. Tell them you will sign the pledge if they remove the non-competitive clause. Or, as other have said, point out that there should at least be ample compensation for such a severe limitation to your personal freedom.
Anecdotally, I recently refused to sign a pledge (誓約書) at work. We periodically have to sign pledges about privacy, and I don’t really mind signing those since it kind of makes sense for my job. However, this time they wanted me to sign a pledge for use of business cards. Kind of amused, I checked the contents, and there was a clause that said I would pledge to pay for financial damages that may occur as a result of misuse of any of my business cards. Never going to be a problem, but how about no. If the company is not willing to take that risk, I don’t think I am either. So I handed back my business cards, which I never used anyways.
Non-competitive agreements are signed upfront and require proportional compensation (without which it’s void in many jurisdictions). They are trying to screw you. Don’t sign it.
As others pointed out, this is silly at many levels. But the silliest, and least complicated one, is you have no obligation to agree to anything new at the time you leave the company. It’s a psychological trick. They owe you all pay and benefits due to you as stipulated in labor law and agreements you signed when you JOINED the company. Period.
By the way, this is not unusual. I posted previously about somebody I hired whose previous employer tried to convince him to sign a non-compete after he resigned. He was shocked at the brazen idea I presented: “refuse!”. But once he snapped out of his Stockholm Syndrome, he realized it was ridiculous to even consider signing, so he told them “no thanks” and got all the pay and benefits he was owed, of course.
> Of course, this document comes with zero compensation to me.
Then it’s illegal. It doesn’t meet the standards of a legally binding contract – even if we ignore the failure to limit scope bringing us to the same result regardless.
Don’t sign it. There is now legal way they can enforce this agreement.
Is this Rakuten? Because I have a friend with exactly the same problem. He still went to competitor in the end though. So that agreement is not really valid I guess.
Ridiculous. During resignation?? They put these in front of you when you sign on, not leave.
Anyway – IME – 1) they aren’t enforceable in many cases and in various jurisdictions 2) no geographic location is just gratuitous; my employer tried this when I signed on and I said no and they changed it to Japan only. 3) They probably have 1 or 2 competitors in mind.
Anyway, don’t sign that. I mean if they want to give you heaps of money, maybe…
They have to pay for any exit non-compete. Otherwise you can refuse to sign it, especially if you never plan to come back.
You’re leaving, they have no leverage. Just decline politely and wrap up your time with them.
I would go back at your manager and say something along the line “This non compete parts lack 2/3 of the requirements to be binding under Japan law, please set the geographical territory and appropriate compensation to enforce it. I don’t want the company to be in trouble because some parts were forgotten in the documents”
Then they’ll scrap it completely.
There are 2 year non compete clauses for many finance jobs. They pay you for the whole non compete period, upfront. You technically still stay employed you just don’t go to the office or have a computer. People literally take a 2 year holiday or start a side gig. Don’t accept that for zero dollars, do not sign it under any circumstances .
If the 2 year non compete was not mentioned in your contract when you signed up, with sizeable cash compensation, you do not have to sign it now. Don’t do it.
They can’t force you to sign anything, you’re free to resign without signing it and there’s not a thing they can do about it.
Even if you do sign it the Japanese constitution guarantees freedom of employment so it’s incredibly unlikely they’d actually be able to enforce it.
Not legally enforceable.
The only thing they can legally do is sue you if you steal confidential information or IP and bring it to your next place.
The laws of Japan proceeds over any contract that you’re asked to sign.
The non compete clauses in contracts upon resignation are in violation of Japanese law.
You do NOT have to sign that.
My company said the same, and I said that if they didn’t remove that non compete clause I wouldn’t sign. I work for the game industry, so all companies are direct competition so it didn’t feel fair.
They removed it on a revised version.
Tell him to sod off. You are free to quit and any noncompete they wanted should have been signed when they hire you.
Some serious Japanese companies that don’t want former employees work for competitors quite literally pay them to do nothing as advisors for the privilege.
If agreeing to the terms doesn’t affect your goals for the next 2 years, negotiate a huge severance pay and go for it only on condition that it’s paid out in full by x date.
Worked extremely well for me.
If it affects your plans, don’t do it. They can’t enforce it unless it was agreed to in your latest signed employment contract.
Just say you want to have a lawyer look at it. And proceed with the rest of your resignation paperwork.
If they ask about the document later, just say you decided not to sign it.
I haven’t even read any of the responses but I am going to reiterate what I know that everyone else has already said: you don’t have to sign anything to leave a company. You just need to hand in your notice.
They will do everything to bully and cajole you and they know that most Japanese employees will cave in, but just refuse to sign anything and quit the company. It really is as simple as that.
EDIT: Just to add, whether these clauses are legally enforceable or not, back in around 2013 I remember a news story about a startup hiring an ex-GREE employee at C-level; and because he had signed a clause like this, GREE threatened to sue the startup; and just the cost of defending the claim was prohibitive for the startup so they fired the guy within 2 weeks of hiring him. Don’t sign anything you don’t have to.
In Japan when you leave you don’t have to sign anything at all. All you are required to do is to inform by writing that you leave 1 month in advance, for example an e-mail is fine. No need to even sign a 退職届 or any other company document they give you.
I signed one once but was compensated for it. It stipulated as non-compete and non-recruit for one year and basically paid in a lump sum up front. Although I was considered on the payroll for a year they said I could not get another full-time job for 3 months as I was being paid by them for a year which I felt was fair. I secured a new gig almost immediately with the stipulation that my start date was 3 months out and I would be an unpaid consultant/intern during which time I worked on independent projects without associating with future colleagues or coworkers in a business sector that was clearly non-compete. At the end of 3 months I received a sign-on bonus for roughly 3 months of consultancy. I cleared this with the previous company I left and they were OK with it. My S/W skills were in short supply here and the new company was quite satisfied with this arrangement.
I’m pretty sure if you’re “still on the payroll” the departed company has some control over what you can do. In my case both companies were reasonable and cooperative with me.