I agree that this kind of legal contract is bad, and Anthropic should do better. I think there are a number of aggrevating factors which made the OpenAI situation extrodinarily bad, and I’m not sure how much these might obtain regarding Anthropic (at least one comment from another departing employee about not being offered this kind of contract suggest the practice is less widespread).
-amount of money at stake -taking money, equity or other things the employee believed they already owned if the employee doesn’t sign the contract, vs. offering them something new (IANAL but in some cases, this could be a felony “grand theft wages” under California law if a threat to withhold wages for not signing a contract is actually carried out, what kinds of equity count as wages would be a complex legal question) -is this offered to everyone, or only under circumstances where there’s a reasonable justification? -is this only offered when someone is fired or also when someone resigns? -to what degree are the policies of offering contracts concealed from employees? -if someone asks to obtain legal advice and/or negotiate before signing, does the company allow this? -if this becomes public, does the company try to deflect/minimize/only address issues that are made publically, or do they fix the whole situation? -is this close to “standard practice” (which doesn’t make it right, but makes it at least seem less deliberately malicious), or is it worse than standard practice? -are there carveouts that reduce the scope of the non-disparagement clause (explicitly allow some kinds of speech, overriding the non-disparagement)? -are there substantive concerns that the employee has at the time of signing the contract, that the agreement would prevent discussing? -are there other ways the company could retaliate against an employee/departing employee who challenges the legality of contract?
I think with termination agreements on being fired there’s often 1. some amount of severance offered 2. a clause that says “the terms and monetary amounts of this agreement are confidential” or similar. I don’t know how often this also includes non-disparagement. I expect that most non-disparagement agreements don’t have a term or limits on what is covered.
I think a steelman of this kind of contract is: Suppose you fire someone, believe you have good reasons to fire them, and you think that them loudly talking about how it was unfair that you fired them would unfairly harm your company’s reputation. Then it seems somewhat reasonable to offer someone money in exchange for “don’t complain about being fired”. The person who was fired can then decide whether talking about it is worth more than the money being offered.
However, you could accomplish this with a much more limited contract, ideally one that lets you disclose “I signed a legal agreement in exchange for money to not complain about being fired”, and doesn’t cover cases where “years later, you decide the company is doing the wrong thing based on public information and want to talk about that publically” or similar.
I think it is not in the nature of most corporate lawyers to think about “is this agreement giving me too much power?” and most employees facing such an agreement just sign it without considering negotiating or challenging the terms.
For any future employer, I will ask about their policies for termination contracts before I join (as this is when you have the most leverage, if they give you an offer they want to convince you to join).
I agree that this kind of legal contract is bad, and Anthropic should do better. I think there are a number of aggrevating factors which made the OpenAI situation extrodinarily bad, and I’m not sure how much these might obtain regarding Anthropic (at least one comment from another departing employee about not being offered this kind of contract suggest the practice is less widespread).
-amount of money at stake
-taking money, equity or other things the employee believed they already owned if the employee doesn’t sign the contract, vs. offering them something new (IANAL but in some cases, this could be a felony “grand theft wages” under California law if a threat to withhold wages for not signing a contract is actually carried out, what kinds of equity count as wages would be a complex legal question)
-is this offered to everyone, or only under circumstances where there’s a reasonable justification?
-is this only offered when someone is fired or also when someone resigns?
-to what degree are the policies of offering contracts concealed from employees?
-if someone asks to obtain legal advice and/or negotiate before signing, does the company allow this?
-if this becomes public, does the company try to deflect/minimize/only address issues that are made publically, or do they fix the whole situation?
-is this close to “standard practice” (which doesn’t make it right, but makes it at least seem less deliberately malicious), or is it worse than standard practice?
-are there carveouts that reduce the scope of the non-disparagement clause (explicitly allow some kinds of speech, overriding the non-disparagement)?
-are there substantive concerns that the employee has at the time of signing the contract, that the agreement would prevent discussing?
-are there other ways the company could retaliate against an employee/departing employee who challenges the legality of contract?
I think with termination agreements on being fired there’s often 1. some amount of severance offered 2. a clause that says “the terms and monetary amounts of this agreement are confidential” or similar. I don’t know how often this also includes non-disparagement. I expect that most non-disparagement agreements don’t have a term or limits on what is covered.
I think a steelman of this kind of contract is: Suppose you fire someone, believe you have good reasons to fire them, and you think that them loudly talking about how it was unfair that you fired them would unfairly harm your company’s reputation. Then it seems somewhat reasonable to offer someone money in exchange for “don’t complain about being fired”. The person who was fired can then decide whether talking about it is worth more than the money being offered.
However, you could accomplish this with a much more limited contract, ideally one that lets you disclose “I signed a legal agreement in exchange for money to not complain about being fired”, and doesn’t cover cases where “years later, you decide the company is doing the wrong thing based on public information and want to talk about that publically” or similar.
I think it is not in the nature of most corporate lawyers to think about “is this agreement giving me too much power?” and most employees facing such an agreement just sign it without considering negotiating or challenging the terms.
For any future employer, I will ask about their policies for termination contracts before I join (as this is when you have the most leverage, if they give you an offer they want to convince you to join).