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I think your lense of "free market" needs to be supplemented with a little game theory here. If you're an employer, what's your disincentive for tucking in a li

I think your lense of "free market" needs to be supplemented with a little game theory here. If you're an employer, what's your disincentive for tucking in a little non-compete in your contract? None at all[1], especially since many of your prospective employees won't read it or potentially (if you're a low-wage employee) understand it's implications. Then what's the disincentive for an entire industry to do this? None at all. And suddenly, there is no free market for job seekers anymore. There's a reason why in the US, overwhelmingly contracts are read against the one who drafts them for example. There's an inherent power imbalance here. That's where laws and courts come into balance things out. [1] To point, it's not uncommon for California-based tech companies to insert non-compete clauses into their contracts, even though they cannot possibly be enforced unless there is some special compensation.

DannyBee 10y ago
" especially since many of your prospective employees won't read it" Why is this on the employers, exactly?
- Gustomaximus 10y ago
  Both parties have to understand a contract for it to agreed upon. For example those massive T&C that go with a website sign-up largely mean nothing if the company hasn't ensured you read and understood them.
  - DannyBee 10y ago
    This is an interesting, but completely incorrect view :) "However, the awareness of a legal obligation is established, not through each party's subjective understanding of the terms, but on "objective indicators," based on what each party said and did" Your T&C examples are adhesion contracts, subject to a different set of rules. Here, you have an opportunity to bargain like any other party.
stretchwithme 10y ago
There is a disincentive, at least when employees recognize what they are signing and how it limits their options. Informed workers that think ahead would see it as a more restrictive job. Of course, its usually slapped in front of them AFTER they've accepted a job. Having accepted a straightforward offer in good faith, the terms are then altered, slightly. Perhaps it should be more clearly stated in a written offer that must be considered before accepting. And perhaps that's why its better to not allow these. It makes it easier for employer and employees to deal with each other. And it makes companies compete more on merit, rather than manipulation. It doesn't hurt the companies ability to compete with each other, as long as they all live under the same rules.
- mdpopescu 10y ago
  Having accepted me as an employee, the company also has invested some resources and is reluctant to lose me. As such, I never had problems removing any annoying clauses in contracts. (True, being from a former communist country my tolerance to restrictive clauses is much higher than that of US citizens, so maybe that accounts for the difference.)
stuaxo 10y ago
Though of course a non compete is lessening the freeness of the market. Of course the market runs because of rules we set in the first place.

DannyBee 10y ago

" especially since many of your prospective employees won't read it" Why is this on the employers, exactly?

Gustomaximus 10y ago
Both parties have to understand a contract for it to agreed upon. For example those massive T&C that go with a website sign-up largely mean nothing if the company hasn't ensured you read and understood them.
- DannyBee 10y ago
  This is an interesting, but completely incorrect view :) "However, the awareness of a legal obligation is established, not through each party's subjective understanding of the terms, but on "objective indicators," based on what each party said and did" Your T&C examples are adhesion contracts, subject to a different set of rules. Here, you have an opportunity to bargain like any other party.

stretchwithme 10y ago

There is a disincentive, at least when employees recognize what they are signing and how it limits their options. Informed workers that think ahead would see it as a more restrictive job. Of course, its usually slapped in front of them AFTER they've accepted a job. Having accepted a straightforward offer in good faith, the terms are then altered, slightly. Perhaps it should be more clearly stated in a written offer that must be considered before accepting. And perhaps that's why its better to not allow these. It makes it easier for employer and employees to deal with each other. And it makes companies compete more on merit, rather than manipulation. It doesn't hurt the companies ability to compete with each other, as long as they all live under the same rules.

mdpopescu 10y ago
Having accepted me as an employee, the company also has invested some resources and is reluctant to lose me. As such, I never had problems removing any annoying clauses in contracts. (True, being from a former communist country my tolerance to restrictive clauses is much higher than that of US citizens, so maybe that accounts for the difference.)

stuaxo 10y ago

Though of course a non compete is lessening the freeness of the market. Of course the market runs because of rules we set in the first place.