Restrictions of Coding Jobs - dummies

By Nikhil Abraham

You could be compensated for a coding job in a variety of ways, depending on the terms of your employment. However, the compensation and benefits are usually subject to the following restrictions:

  • Vesting and clawback: When you start coding for a company, they make a significant investment in you to bring you up to speed. To make sure that investment pays off, companies incentivize you to stay by vesting, or granting your equity package in installments.

    Usually, your equity will vest over four years, with 25 percent granted after one year of employment, and the remaining equity granted on a monthly basis. If you leave before four years, you keep only your vested equity and forfeit the unvested equity. Similarly, some companies claw back, or require partial repayment of, salary and upfront bonuses if you leave before some time limit, usually one year.

  • Noncompete: The enforceability of a noncompete restriction varies from state to state, but generally the clause prevents you from working in the future at a company that competes with your current employer. The employer wants to prevent an employee from using sensitive intellectual property to aid a competitor; the employee wants to continue using and developing specialized skills.

    Usually, to decrease the burden on the employee, the noncompete clause is limited either by time or by geography. For example, the language may say that you cannot work for any competitor for up to one year or for any competitor within 50 miles of any company location. In either case, negotiate to minimize the effect of a noncompete clause.

Noncompete agreements governed by California law are generally void, except in a narrow set of circumstances involving the sale or shutdown of an entire business.