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I can see non-competes as valuable for people who know business details that would be considered trade secrets (and only for a limited period of time). But for

I can see non-competes as valuable for people who know business details that would be considered trade secrets (and only for a limited period of time). But for people further down the ladder, this seems like an extremely high burden.

crdoconnor 11y ago
>I can see non-competes as valuable for people who know business details that would be considered trade secrets It would still be in the public interest to do away with them at that level.
- bluejekyll 11y ago
  I was unaware of the UK laws around this. That would take care of this pretty quickly even at the senior levels. If the company really believes that you have valuable knowledge, then the burden is on them (in terms of financial burden) to compensate you for not taking the other job. Obviously, they would only do this in the cases where they are worried that it really could harm their competitive advantage. It would also save companies money in the long run given the number of instances that two companies go to court over things like this.
golergka 11y ago
That conversation should take place before you sign something. After you sign something, it's not important if it's reasonable or not: you have to uphold it.
- masklinn 11y ago
  > After you sign something, it's not important if it's reasonable or not: you have to uphold it. It very much is important, and you don't necessarily have to uphold it. In the vast majority of jurisdictions unreasonable[0] contractual clauses are unenforceable and may even be sanctionable. [0] what is or is not unreasonable being the primary variable. CNC clauses are generally unreasonable in california (reasonable CNC are related to goodwill and shared businesses) for instance, and in mainland europe they are limited and often must be compensated for their whole duration e.g. in Germany the leaving employee must be paid at least half their gross salary for the whole CNC term (no more than two years) and unreasonable clauses can be invalidated, lest the whole CNC be invalidated.
- eropple 11y ago
  This idea is not upheld in any part of American jurisprudence. Plenty of contractual conditions are straight-up not enforceable; this is why so many have severability clauses.
- tomg 11y ago
  > After you sign something, it's not important if it's reasonable or not: you have to uphold it. This is simply not true. Trivial examples include a contract without consideration, or an apartment lease with clauses that attempt to restrict rights granted by local law (very common in NYC). Most non-competes in the state of California are not enforceable as well, even if you agree to it.
- gherkin0 11y ago
  > After you sign something, it's not important if it's reasonable or not: you have to uphold it. That's frankly a ridiculous idea that clearly leads to injustice. Contracts are often between people who are not equals, where one party has less ability to negotiate or walk away. If the weaker party does not have extra protections outside of the contracting process, the stronger party could use its power to abuse them.
- dragonwriter 11y ago
  > After you sign something, it's not important if it's reasonable or not: you have to uphold it. This may be your personal moral preference, but it very much is not an accurate reflection of contract law (at least, not in any US jurisdiction.)
  - spacecowboy_lon 11y ago
    No it has to be "justicabale" even if you sign a contract that signs away for statutory rights that clause would be void. You cant sell yourself into slavery for example.
- st3v3r 11y ago
  No. These agreements are immoral. There should be absolutely no obligation to uphold it.
  - pc86 11y ago
    That's a pretty odd definition of "immoral."
    - st3v3r 11y ago
      I fail to see how saying a clause who's only reason for existing is to prevent someone from earning a living in their field is immoral is odd.
e0 11y ago
Trade secrets are already specifically protected, even without non-compete clauses (https://www.law.cornell.edu/wex/trade_secret https://www.law.cornell.edu/wex/trade_secret). A former employee that divulges trade secrets will get into trouble for violating that.
- bluejekyll 11y ago
  Thanks for sharing that. If any lawyers are reading this, I would be curious as to why non-competes exist if the above is true. I suppose I knew that implicitly, i.e. joining a competitor and divulging your previous employers secrets feels illegal, regardless of law. In theory, if trade secrets are already protected, then either the non-compete's are setup as a double protection, or they are only being used to restrict movement. (neither of which seems fair in the economic sense)
  - sokoloff 11y ago
    A salesperson's or financial adviser's Rolodex is not a trade secret in most circumstances and a public list of a firm's past/current clients never is (by definition), but all can be very valuable for a warm-introduction/client-poaching scenario.
  - acveilleux 11y ago
    Clients often follow their old account executive they like when that person leaves. Nothing illegal in that... Sometimes someone figures out a better solution to a problem than their current employer and they sucessfully go out and implement it. That's not a trade secret... The solution is wholly different. A good example of the later case can be seen in the healthcare field. The same person architected the Cloverleaf interface engine (which uses TCL as glue language) and then went on to implement the highly popular Corepoint interface engine (which generally tries to avoid the use of programming/scripting language). Corepoint is eating cloverleaf's lunch in the marketplace, the main similarity between them is what they do, how they do it is very different.
cmdkeen 11y ago
The UK's approach is generally to have "gardening leave" - if you want to be able to ensure I can't work for a competitor for 6 months after leaving you agree to pay me my full salary for 6 months after I leave in return for me not working anywhere else. It's fairly common in the client facing world of finance for instance to stop someone walking off with all of their clients to a new firm. For me at least it seems a fairly sensible compromise - 6 months in that example is really at the top end of the spectrum, usually it is 1-3 months. That's plenty of time to have a holiday, learn some new skills and arrive at your new job refreshed and ready to go. The length and scope of UK non-competes is fairly heavily restricted by the courts and the onus is on the employer to justify the business need. An example like in the article would be unthinkable.
- acveilleux 11y ago
  Non competes in Canada are also enforced very selectively. The standard legal advice is to structure the agreement such as it still stands (severability) even if specific parts of it are struck down because of how likely that is. For non compete to work, the affected person has to have specific knowledge to protect (usually client accounts) and the restriction needs to be narrow to specific industry ("software" is not good enough, "Point of Sales software for Bars and Restaurants" probably is), duration needs to be only as short as it needs to be and geographically bounded. The only time broad non-compete really hold up is for things like sales of a business where the founders are barred from immediately competing with the company they just sold.
  - cookiecaper 11y ago
    It should be noted that in the U.S., there are really 50 individual jurisdictions. Contract law is a state matter. Some states may be better or worse at upholding non-competes. California in particular is known for disregarding non-competes. Also, many non-competes go totally unenforced. It's rare that a suit over a non-compete is actually filed for low-level employees. In the linked article, the writer wasn't fired because her old company sued her for competing, she was fired simply because the new company found out she had signed a non-compete and presumably wanted to avoid any potential lawsuit-related shenanigans. It's also possible that the company is trying to establish a precedent for voluntary, pro-active enforcement of competitors' non-competes within the industry specifically because they know the courts are unlikely to uphold them. If all the employers just agree not to hire someone who worked at a competitor within the last 2 years, then they don't need to worry about what the court thinks (though they may have to face the DOJ in a wage-fixing scandal, like the computer animation industry has).

crdoconnor 11y ago

>I can see non-competes as valuable for people who know business details that would be considered trade secrets It would still be in the public interest to do away with them at that level.

bluejekyll 11y ago
I was unaware of the UK laws around this. That would take care of this pretty quickly even at the senior levels. If the company really believes that you have valuable knowledge, then the burden is on them (in terms of financial burden) to compensate you for not taking the other job. Obviously, they would only do this in the cases where they are worried that it really could harm their competitive advantage. It would also save companies money in the long run given the number of instances that two companies go to court over things like this.

golergka 11y ago

That conversation should take place before you sign something. After you sign something, it's not important if it's reasonable or not: you have to uphold it.

masklinn 11y ago
> After you sign something, it's not important if it's reasonable or not: you have to uphold it. It very much is important, and you don't necessarily have to uphold it. In the vast majority of jurisdictions unreasonable[0] contractual clauses are unenforceable and may even be sanctionable. [0] what is or is not unreasonable being the primary variable. CNC clauses are generally unreasonable in california (reasonable CNC are related to goodwill and shared businesses) for instance, and in mainland europe they are limited and often must be compensated for their whole duration e.g. in Germany the leaving employee must be paid at least half their gross salary for the whole CNC term (no more than two years) and unreasonable clauses can be invalidated, lest the whole CNC be invalidated.
eropple 11y ago
This idea is not upheld in any part of American jurisprudence. Plenty of contractual conditions are straight-up not enforceable; this is why so many have severability clauses.
tomg 11y ago
> After you sign something, it's not important if it's reasonable or not: you have to uphold it. This is simply not true. Trivial examples include a contract without consideration, or an apartment lease with clauses that attempt to restrict rights granted by local law (very common in NYC). Most non-competes in the state of California are not enforceable as well, even if you agree to it.
gherkin0 11y ago
> After you sign something, it's not important if it's reasonable or not: you have to uphold it. That's frankly a ridiculous idea that clearly leads to injustice. Contracts are often between people who are not equals, where one party has less ability to negotiate or walk away. If the weaker party does not have extra protections outside of the contracting process, the stronger party could use its power to abuse them.
dragonwriter 11y ago
> After you sign something, it's not important if it's reasonable or not: you have to uphold it. This may be your personal moral preference, but it very much is not an accurate reflection of contract law (at least, not in any US jurisdiction.)
- spacecowboy_lon 11y ago
  No it has to be "justicabale" even if you sign a contract that signs away for statutory rights that clause would be void. You cant sell yourself into slavery for example.
st3v3r 11y ago
No. These agreements are immoral. There should be absolutely no obligation to uphold it.
- pc86 11y ago
  That's a pretty odd definition of "immoral."
  - st3v3r 11y ago
    I fail to see how saying a clause who's only reason for existing is to prevent someone from earning a living in their field is immoral is odd.

e0 11y ago

Trade secrets are already specifically protected, even without non-compete clauses (https://www.law.cornell.edu/wex/trade_secret https://www.law.cornell.edu/wex/trade_secret). A former employee that divulges trade secrets will get into trouble for violating that.

bluejekyll 11y ago
Thanks for sharing that. If any lawyers are reading this, I would be curious as to why non-competes exist if the above is true. I suppose I knew that implicitly, i.e. joining a competitor and divulging your previous employers secrets feels illegal, regardless of law. In theory, if trade secrets are already protected, then either the non-compete's are setup as a double protection, or they are only being used to restrict movement. (neither of which seems fair in the economic sense)
- sokoloff 11y ago
  A salesperson's or financial adviser's Rolodex is not a trade secret in most circumstances and a public list of a firm's past/current clients never is (by definition), but all can be very valuable for a warm-introduction/client-poaching scenario.
- acveilleux 11y ago
  Clients often follow their old account executive they like when that person leaves. Nothing illegal in that... Sometimes someone figures out a better solution to a problem than their current employer and they sucessfully go out and implement it. That's not a trade secret... The solution is wholly different. A good example of the later case can be seen in the healthcare field. The same person architected the Cloverleaf interface engine (which uses TCL as glue language) and then went on to implement the highly popular Corepoint interface engine (which generally tries to avoid the use of programming/scripting language). Corepoint is eating cloverleaf's lunch in the marketplace, the main similarity between them is what they do, how they do it is very different.

cmdkeen 11y ago

The UK's approach is generally to have "gardening leave" - if you want to be able to ensure I can't work for a competitor for 6 months after leaving you agree to pay me my full salary for 6 months after I leave in return for me not working anywhere else. It's fairly common in the client facing world of finance for instance to stop someone walking off with all of their clients to a new firm. For me at least it seems a fairly sensible compromise - 6 months in that example is really at the top end of the spectrum, usually it is 1-3 months. That's plenty of time to have a holiday, learn some new skills and arrive at your new job refreshed and ready to go. The length and scope of UK non-competes is fairly heavily restricted by the courts and the onus is on the employer to justify the business need. An example like in the article would be unthinkable.

acveilleux 11y ago
Non competes in Canada are also enforced very selectively. The standard legal advice is to structure the agreement such as it still stands (severability) even if specific parts of it are struck down because of how likely that is. For non compete to work, the affected person has to have specific knowledge to protect (usually client accounts) and the restriction needs to be narrow to specific industry ("software" is not good enough, "Point of Sales software for Bars and Restaurants" probably is), duration needs to be only as short as it needs to be and geographically bounded. The only time broad non-compete really hold up is for things like sales of a business where the founders are barred from immediately competing with the company they just sold.
- cookiecaper 11y ago
  It should be noted that in the U.S., there are really 50 individual jurisdictions. Contract law is a state matter. Some states may be better or worse at upholding non-competes. California in particular is known for disregarding non-competes. Also, many non-competes go totally unenforced. It's rare that a suit over a non-compete is actually filed for low-level employees. In the linked article, the writer wasn't fired because her old company sued her for competing, she was fired simply because the new company found out she had signed a non-compete and presumably wanted to avoid any potential lawsuit-related shenanigans. It's also possible that the company is trying to establish a precedent for voluntary, pro-active enforcement of competitors' non-competes within the industry specifically because they know the courts are unlikely to uphold them. If all the employers just agree not to hire someone who worked at a competitor within the last 2 years, then they don't need to worry about what the court thinks (though they may have to face the DOJ in a wage-fixing scandal, like the computer animation industry has).