10 ms·

Non-competes, the most anti-innovation, anti-skilled worker, anti-free market, anti-business and anti-American thing in working today. Non-competes are protecti

Non-competes, the most anti-innovation, anti-skilled worker, anti-free market, anti-business and anti-American thing in working today. Non-competes are protectionism for larger businesses over small/medium businesses. As a freelancer, contractor and self-employed business owner/worker, please make these illegal, tired of these. The worst part about non-competes is they are blanket protectionism usually and up to 2+ years of non-compete, this sometimes happens on a job that is only 1-3 months. You have to laugh at those types of situations. Usually the client will push them aside or lower the time to the job plus some time, but both non-competes and arbitration agreements are horrible for workers in today's economy where people change jobs frequently and many are self-employed/freelancing/contracting. The non-compete should not exist, at the core removing competition from skilled workers in our economy is bad all around, unless you are one of the current big fish.

jomamaxx 10y ago
From your comments I gather you might not understand the problem. Were Soft Engs simply to do 'work' then you would be absolutely right. But in a world of IP ... it's a different story. Company ABC brings you in, trains you on their know-how and core IP, which took a lot of struggle, $, and R&D to create - then you leave, go to a competitor, and effectively communicate and give away ABC Corps. most valuable asset. Non-competes can certainly applied far too aggressively, esp. in situations where there is not merit ... but there are definitely cases wherein I think it does make sense. I'm thinking companies like DWAVE in Vancouver that built the 'first' qubit/quantum computer. The guy spent his whole life developing that tech. It's feasible that Google just grabs up some of the team and internalizes all that work and effort for the price of a few headcount. It's a real problem in some cases, but worse - very difficult to parameterize.
- bsder 10y ago
  > Company ABC brings you in, trains you on their know-how and core IP, which took a lot of struggle, $, and R&D to create - then you leave, go to a competitor, and effectively communicate and give away ABC Corps. most valuable asset. Um, that's covered by an NDA--Non-Disclosure Agreement. Those are generally QUITE enforceable, even in California and often last for 3 to 5 years. Non-compete is quite different.
  - jomamaxx 10y ago
    Your comments about NDA's are not quite right. NDA's do not capture a lot of the essential issue. Pragmatically speaking, it's nary impossible to work in some fields, and then move to a competing firm without passing on know how or trade secrets. Even the 'manner of approach' to a problem, while it may not be a trade secret, is basically a core part of the 'true IP' that is developed by a company. Using DWAVE as an example - there are thousands of 'little things' that they will have had to figure out along the way - from which parts to use, which vendors work well, material types, tooling, physical test units, support gear (like cooling etc.) - all of this is IP. Any number of small issues can be the 'key ingredients' that make or break a project. When DWAVE spends a year trying to figure out how to keep some material at a steady temperature in order to bind it to another ... then that's IP. It's a paradox when nearly one's entire skill set is tantamount to 'trade secrets' but it's feasible. An NDA - in the broadest sense - in this case would be a de-facto 'non compete' - because there's hardly a thing this Eng could do for Google that wouldn't involve giving away important information. In case you guys are not aware: hiring people to steal away trade secrets and know-how is very common in the Valley, often by major players and firms. If you haven't noticed - the biggest and most successful tech companies all have either natural monopolies (i.e. Facebook/Twitter with network externalities), or insurmountable massive barriers to entry keeping others out (i.e. Apple having MacOS/iOS, a retail distribution chain, massive leverage over supply chain, and market share). In business scenarios it happens as well, in less 'protectable' scenarios. Apple snared away tons of BlackBerry sales/BD execs - not because they were necessarily skilled or talented - but because of their established relationships within carrier channels. Apple was buying access to Verizon and AT&T - not random sales guys abilities.
    - Hondor 10y ago
      That's certainly a problem about salesmen taking their clients and other relationships with them. For small sales-only companies anyway, where the company doesn't provide much infrastructure beyond a desk and a phone. But in those cases, maybe the company really is a bit worthless and it's the salesmen that created the value mostly independently and should be able to keep it. Don't forget that not only do companies lose their "IP" with outgoing workers, but they also get more free with incoming ones. Perhaps it balances out but with a net positive effect since effective skills get spread around the industry instead of being locked up whereever they were discovered. I think this is part of a bigger argument about how much IP protection is enough to encourage innovation but not so much that it stifles the market. You seem to be advocating protecting every last little bit of knowledge but perhaps that's stifling for the economy overall even if it is more fair for individual members.
- drawkbox 10y ago
  An NDA would suffice in that case. Not being able to work work in the same field for up to 2 years (non-compete) and not disclosing internal ip, processes, etc when you go work at another company (NDA) in the field are much different. Preventing someone from working in a field and not disclosing or sharing secrets/ip are two different animals. NDAs are useful and I use them myself when contractors work with us, but non-competes create a very master/slave type of relationship, ownership of someone's skill that they need to work. Paid non-competes are something that isn't as bad but non paid non-competes are horrible for the little guy and really a form of ownership that really goes against 'pro-business' ideals for smaller companies trying to compete while seemingly being 'pro-business' for the company doling out non-competes (big fish). Contractors can't be told where to work, how to work or times to work, why are we allowing companies to tell skilled workers what they can and can't work on after the contract is up aside from what is under NDA?
  - Gibbon1 10y ago
    My first exposure to non-competes was from a guy I did some work for. He was a network firmware/driver guy back in the 80's/90's. Took a six month contract with a European company. After the contract ended his recruiter got him another gig. When the original company found out they threatened to sue him. Because they said he had signed a five year non-compete.
    - walshemj 10y ago
      5 years lol no way is that enforceable
- elmigranto 10y ago
  On the other hand, you work at a company for most of your professional life, and become an expert in a field you love. One day you are no longer employed for some reason, but due to non-compete there is no way to get a job you want, since your expertise is somewhat niche. So you are forced to build websites or sell coffee for two years. Or drop your life in US and work some other place. If the person from your quantum computer example gets fired with non-compete, it would mean being forced out of he field with 100% certainty. Quite a leverage for a company. In my opinion, there is still enough stuff out there benefiting corps over employees even if non-competes go away.
  - greglindahl 10y ago
    Well, the counter-example is that the tech industry in California completely collapsed because... oh, wait, we're doing OK.
    - pmontra 10y ago
      According to other posts here, CA banned non competes some 150 years ago.
      - throw_away_777 10y ago
        The post you were replying to was sarcastic. The point is that if non-competes really were essential to companies, you would expect to see that reflected in CA. Instead the most notable thing is CA has higher salaries.
  - sjg007 10y ago
    Take the job and let them sue. Scotus won't enforce a noncompete.
    - greglindahl 10y ago
      Non-competes are successfully enforced (outside CA) all of the time. Just take a look at the tech press, there are quite a few articles about it.
- aikah 10y ago
  > But in a world of IP ... it's a different story. If the employee violates the IP then sue him for that. No need for non-compete agreements. If you're worried the employee will steal your clients then you're not giving your clients a good deal at first place, and the employee shouldn't be prevented from working with your clients. This is a free market. Non compete agreements are completely anti-freedom of both enterprise and work. > Company ABC brings you in, trains you on their know-how and core IP, which took a lot of struggle, $, and R&D to create - then you leave, go to a competitor, and effectively communicate and give away ABC Corps. most valuable asset. Then the burden of proof should lie with the previous company, there shouldn't be any possibility of preemptive clause within the former contract. If it's clear corporate secrets were leaked then sue. If you don't want your employee go work somewhere else then compensate him, that's the problem here , most of the time there is no compensation. It doesn't matter how much R&D was created. That's the role of patents to deal with that thing.
  - jomamaxx 10y ago
    "It doesn't matter how much R&D was created. That's the role of patents to deal with that thing." I'm beginning to think none of you have ever worked in companies that actually produce IP. First off - that's not what patents are for. Patents protect publicly known information - not trade secrets. And they don't do it very well. There are very few things you can defend with a patent. What companies are concerned with is 'trade secrets' and 'know how' - and it's a serious thing. "Then the burden of proof should lie with the previous company, there shouldn't be any possibility of preemptive clause within the former contract." If you work at DWAVE for 5 years and learn everything you know about Quantum Computing there - and go to Google to work on Quantum Computing - then there is basically a 100% chance that you are passing on 'know how' and 'trade secrets' - otherwise - Google would not hire you. Your comments about customers etc. are irrelevant with respect to IP issues. If you work for ABC corp and they make a 'sales automation tool' - and you go off and build your own 'sales automation tool' - then fine. It's not about IP or trade secrets. You can do as you like. But for other types of things, no way. You work at Nuance on Speech recognition - then you leave and build a nearly identical speech recognition system? That's probably IP theft. There would not be any technology if IP could not be protected in some reasonable way. I'm not suggesting that many of these contracts are crazy - and that there can be absurd limitations and weird corner cases - of course it's very tricky - but companies deserve the right to protect their IP in some manner.
nickff 10y ago
I agree that non-competes can be inconvenient for some, depending on their business model or career plans, but I am not sure how they are anti-innovation or anti-worker. Is there some evidence that they reduce overall productivity, or any other quantifiable metric? I am not particularly in favor of or against non-competes as a whole, (though I would be reluctant to sign one,) but they strike me as less invasive than other marketplace restrictions (such as government regulations).
- dredmorbius 10y ago
  Anything that stands in the way of a worker finding and securing their best employment, in terms of both productivity and play, is both anti-competitive and anti-worker. The fact that noncompetes also prevent effective technology transfer between companies (which is how innovation happens) means they're also anti-innovation. On the last point, see generally J. Doyne Farmer and John C. Holland who've done significant work on innovation and the processes by which it occurs. You'll find presentations from both on YouTube, as well as publications. Both are/were associated with the Santa Fe Institute (Holland died in 2015).
  - nickff 10y ago
    What if the prospective employee is presented with two offers: 1) No non-compete, long hours, and low salary 2) Non-compete agreement, short and flexible hours, and high salary If this is a possible scenario, would the ban on non-competes be anti-worker?
    - taneq 10y ago
      Non-sequitur, unless banning non-competes would make the hours longer and less flexible or the salary lower on the second job.
      - nickff 10y ago
        You are assuming that no employer would ever pay more and be more flexible in exchange for a non-compete; I can imagine many employers in highly competitive industries who would.
elcct 10y ago
Non compete is fine if you were paid full salary for the entire time.
- masklinn 10y ago
  For the entire extent of the non-compete or for the entire time of your job? If it's the former then maybe (Germany requires at least 50% gross for the extent of the non-compete, and it can still be struck down by courts if it unreasonably hampers the former employee's ability to find a new job)
- Silhouette 10y ago
  Which full salary, the one you got before, or the one you could make as a skilled software developer moving to a much better gig with a rival employer willing to offer a more attractive deal?
  - elcct 10y ago
    This is a good question. I think if you were offered better salary, the former company should either match it or let you take new contract.
    - michaelmrose 10y ago
      This is sensible but its a lot easier just to make non competes go away entirely.
      - elcct 10y ago
        In the end if there is no compete clause in your contract, you can just not take it...
        abjorn 10y ago
        That might be okay for a software engineer who can likely find a different offer somewhere else without much trouble, but that's not going to be realistic for everybody.
AnonymousFan9 10y ago
I posted this above, but it applies here too: Non-competes allow employees to get training they otherwise would not get. A non-compete allows a company to make an investment in you (in the form of training) with some assurance that you will not immediately turn around post-training and go work for a direct competitor. NDAs/IP assignment agreements do not address this need. If it weren't for non-competes, that investment would be infeasible and we would all be paying our employers for the training we get – either directly, in the form of course fees, or indirectly, in the form of depressed wages during the course of the training. For a deeper dive on this, see Paul H. Rubin and Peter Shedd, "Human Capital and Covenants Not to Compete," available at https://www.jstor.org/stable/724227?seq=1#page_scan_tab_cont... https://www.jstor.org/stable/724227?seq=1#page_scan_tab_cont....
- RIMR 10y ago
  >Non-competes allow employees to get training they otherwise would not get. Yeah, because employers refuse to train employees unless they sign a non-compete. It's not that they are unable to provide training, it is that they are unwilling. If Non-competes are banned, then they can start providing better training to more workers because there's no more needless red tape... >A non-compete allows a company to make an investment in you (in the form of training) with some assurance that you will not immediately turn around post-training and go work for a direct competitor. Then why to most non-competes extend 2 years after you leave a company, and why do they get applied to workers who have been with a company for years? You, like many others in this thread, seem to be confusing "experience", a thing the employee owns, with "training" and "know-how", things the employer owns.

jomamaxx 10y ago

From your comments I gather you might not understand the problem. Were Soft Engs simply to do 'work' then you would be absolutely right. But in a world of IP ... it's a different story. Company ABC brings you in, trains you on their know-how and core IP, which took a lot of struggle, $, and R&D to create - then you leave, go to a competitor, and effectively communicate and give away ABC Corps. most valuable asset. Non-competes can certainly applied far too aggressively, esp. in situations where there is not merit ... but there are definitely cases wherein I think it does make sense. I'm thinking companies like DWAVE in Vancouver that built the 'first' qubit/quantum computer. The guy spent his whole life developing that tech. It's feasible that Google just grabs up some of the team and internalizes all that work and effort for the price of a few headcount. It's a real problem in some cases, but worse - very difficult to parameterize.

bsder 10y ago
> Company ABC brings you in, trains you on their know-how and core IP, which took a lot of struggle, $, and R&D to create - then you leave, go to a competitor, and effectively communicate and give away ABC Corps. most valuable asset. Um, that's covered by an NDA--Non-Disclosure Agreement. Those are generally QUITE enforceable, even in California and often last for 3 to 5 years. Non-compete is quite different.
- jomamaxx 10y ago
  Your comments about NDA's are not quite right. NDA's do not capture a lot of the essential issue. Pragmatically speaking, it's nary impossible to work in some fields, and then move to a competing firm without passing on know how or trade secrets. Even the 'manner of approach' to a problem, while it may not be a trade secret, is basically a core part of the 'true IP' that is developed by a company. Using DWAVE as an example - there are thousands of 'little things' that they will have had to figure out along the way - from which parts to use, which vendors work well, material types, tooling, physical test units, support gear (like cooling etc.) - all of this is IP. Any number of small issues can be the 'key ingredients' that make or break a project. When DWAVE spends a year trying to figure out how to keep some material at a steady temperature in order to bind it to another ... then that's IP. It's a paradox when nearly one's entire skill set is tantamount to 'trade secrets' but it's feasible. An NDA - in the broadest sense - in this case would be a de-facto 'non compete' - because there's hardly a thing this Eng could do for Google that wouldn't involve giving away important information. In case you guys are not aware: hiring people to steal away trade secrets and know-how is very common in the Valley, often by major players and firms. If you haven't noticed - the biggest and most successful tech companies all have either natural monopolies (i.e. Facebook/Twitter with network externalities), or insurmountable massive barriers to entry keeping others out (i.e. Apple having MacOS/iOS, a retail distribution chain, massive leverage over supply chain, and market share). In business scenarios it happens as well, in less 'protectable' scenarios. Apple snared away tons of BlackBerry sales/BD execs - not because they were necessarily skilled or talented - but because of their established relationships within carrier channels. Apple was buying access to Verizon and AT&T - not random sales guys abilities.
  - Hondor 10y ago
    That's certainly a problem about salesmen taking their clients and other relationships with them. For small sales-only companies anyway, where the company doesn't provide much infrastructure beyond a desk and a phone. But in those cases, maybe the company really is a bit worthless and it's the salesmen that created the value mostly independently and should be able to keep it. Don't forget that not only do companies lose their "IP" with outgoing workers, but they also get more free with incoming ones. Perhaps it balances out but with a net positive effect since effective skills get spread around the industry instead of being locked up whereever they were discovered. I think this is part of a bigger argument about how much IP protection is enough to encourage innovation but not so much that it stifles the market. You seem to be advocating protecting every last little bit of knowledge but perhaps that's stifling for the economy overall even if it is more fair for individual members.
drawkbox 10y ago
An NDA would suffice in that case. Not being able to work work in the same field for up to 2 years (non-compete) and not disclosing internal ip, processes, etc when you go work at another company (NDA) in the field are much different. Preventing someone from working in a field and not disclosing or sharing secrets/ip are two different animals. NDAs are useful and I use them myself when contractors work with us, but non-competes create a very master/slave type of relationship, ownership of someone's skill that they need to work. Paid non-competes are something that isn't as bad but non paid non-competes are horrible for the little guy and really a form of ownership that really goes against 'pro-business' ideals for smaller companies trying to compete while seemingly being 'pro-business' for the company doling out non-competes (big fish). Contractors can't be told where to work, how to work or times to work, why are we allowing companies to tell skilled workers what they can and can't work on after the contract is up aside from what is under NDA?
- Gibbon1 10y ago
  My first exposure to non-competes was from a guy I did some work for. He was a network firmware/driver guy back in the 80's/90's. Took a six month contract with a European company. After the contract ended his recruiter got him another gig. When the original company found out they threatened to sue him. Because they said he had signed a five year non-compete.
  - walshemj 10y ago
    5 years lol no way is that enforceable
elmigranto 10y ago
On the other hand, you work at a company for most of your professional life, and become an expert in a field you love. One day you are no longer employed for some reason, but due to non-compete there is no way to get a job you want, since your expertise is somewhat niche. So you are forced to build websites or sell coffee for two years. Or drop your life in US and work some other place. If the person from your quantum computer example gets fired with non-compete, it would mean being forced out of he field with 100% certainty. Quite a leverage for a company. In my opinion, there is still enough stuff out there benefiting corps over employees even if non-competes go away.
- greglindahl 10y ago
  Well, the counter-example is that the tech industry in California completely collapsed because... oh, wait, we're doing OK.
  - pmontra 10y ago
    According to other posts here, CA banned non competes some 150 years ago.
    - throw_away_777 10y ago
      The post you were replying to was sarcastic. The point is that if non-competes really were essential to companies, you would expect to see that reflected in CA. Instead the most notable thing is CA has higher salaries.
- sjg007 10y ago
  Take the job and let them sue. Scotus won't enforce a noncompete.
  - greglindahl 10y ago
    Non-competes are successfully enforced (outside CA) all of the time. Just take a look at the tech press, there are quite a few articles about it.
aikah 10y ago
> But in a world of IP ... it's a different story. If the employee violates the IP then sue him for that. No need for non-compete agreements. If you're worried the employee will steal your clients then you're not giving your clients a good deal at first place, and the employee shouldn't be prevented from working with your clients. This is a free market. Non compete agreements are completely anti-freedom of both enterprise and work. > Company ABC brings you in, trains you on their know-how and core IP, which took a lot of struggle, $, and R&D to create - then you leave, go to a competitor, and effectively communicate and give away ABC Corps. most valuable asset. Then the burden of proof should lie with the previous company, there shouldn't be any possibility of preemptive clause within the former contract. If it's clear corporate secrets were leaked then sue. If you don't want your employee go work somewhere else then compensate him, that's the problem here , most of the time there is no compensation. It doesn't matter how much R&D was created. That's the role of patents to deal with that thing.
- jomamaxx 10y ago
  "It doesn't matter how much R&D was created. That's the role of patents to deal with that thing." I'm beginning to think none of you have ever worked in companies that actually produce IP. First off - that's not what patents are for. Patents protect publicly known information - not trade secrets. And they don't do it very well. There are very few things you can defend with a patent. What companies are concerned with is 'trade secrets' and 'know how' - and it's a serious thing. "Then the burden of proof should lie with the previous company, there shouldn't be any possibility of preemptive clause within the former contract." If you work at DWAVE for 5 years and learn everything you know about Quantum Computing there - and go to Google to work on Quantum Computing - then there is basically a 100% chance that you are passing on 'know how' and 'trade secrets' - otherwise - Google would not hire you. Your comments about customers etc. are irrelevant with respect to IP issues. If you work for ABC corp and they make a 'sales automation tool' - and you go off and build your own 'sales automation tool' - then fine. It's not about IP or trade secrets. You can do as you like. But for other types of things, no way. You work at Nuance on Speech recognition - then you leave and build a nearly identical speech recognition system? That's probably IP theft. There would not be any technology if IP could not be protected in some reasonable way. I'm not suggesting that many of these contracts are crazy - and that there can be absurd limitations and weird corner cases - of course it's very tricky - but companies deserve the right to protect their IP in some manner.

nickff 10y ago

I agree that non-competes can be inconvenient for some, depending on their business model or career plans, but I am not sure how they are anti-innovation or anti-worker. Is there some evidence that they reduce overall productivity, or any other quantifiable metric? I am not particularly in favor of or against non-competes as a whole, (though I would be reluctant to sign one,) but they strike me as less invasive than other marketplace restrictions (such as government regulations).

dredmorbius 10y ago
Anything that stands in the way of a worker finding and securing their best employment, in terms of both productivity and play, is both anti-competitive and anti-worker. The fact that noncompetes also prevent effective technology transfer between companies (which is how innovation happens) means they're also anti-innovation. On the last point, see generally J. Doyne Farmer and John C. Holland who've done significant work on innovation and the processes by which it occurs. You'll find presentations from both on YouTube, as well as publications. Both are/were associated with the Santa Fe Institute (Holland died in 2015).
- nickff 10y ago
  What if the prospective employee is presented with two offers: 1) No non-compete, long hours, and low salary 2) Non-compete agreement, short and flexible hours, and high salary If this is a possible scenario, would the ban on non-competes be anti-worker?
  - taneq 10y ago
    Non-sequitur, unless banning non-competes would make the hours longer and less flexible or the salary lower on the second job.
    - nickff 10y ago
      You are assuming that no employer would ever pay more and be more flexible in exchange for a non-compete; I can imagine many employers in highly competitive industries who would.

elcct 10y ago

Non compete is fine if you were paid full salary for the entire time.

masklinn 10y ago
For the entire extent of the non-compete or for the entire time of your job? If it's the former then maybe (Germany requires at least 50% gross for the extent of the non-compete, and it can still be struck down by courts if it unreasonably hampers the former employee's ability to find a new job)
Silhouette 10y ago
Which full salary, the one you got before, or the one you could make as a skilled software developer moving to a much better gig with a rival employer willing to offer a more attractive deal?
- elcct 10y ago
  This is a good question. I think if you were offered better salary, the former company should either match it or let you take new contract.
  - michaelmrose 10y ago
    This is sensible but its a lot easier just to make non competes go away entirely.
    - elcct 10y ago
      In the end if there is no compete clause in your contract, you can just not take it...
      - abjorn 10y ago
        That might be okay for a software engineer who can likely find a different offer somewhere else without much trouble, but that's not going to be realistic for everybody.

AnonymousFan9 10y ago

I posted this above, but it applies here too: Non-competes allow employees to get training they otherwise would not get. A non-compete allows a company to make an investment in you (in the form of training) with some assurance that you will not immediately turn around post-training and go work for a direct competitor. NDAs/IP assignment agreements do not address this need. If it weren't for non-competes, that investment would be infeasible and we would all be paying our employers for the training we get – either directly, in the form of course fees, or indirectly, in the form of depressed wages during the course of the training. For a deeper dive on this, see Paul H. Rubin and Peter Shedd, "Human Capital and Covenants Not to Compete," available at https://www.jstor.org/stable/724227?seq=1#page_scan_tab_cont... https://www.jstor.org/stable/724227?seq=1#page_scan_tab_cont....

RIMR 10y ago
>Non-competes allow employees to get training they otherwise would not get. Yeah, because employers refuse to train employees unless they sign a non-compete. It's not that they are unable to provide training, it is that they are unwilling. If Non-competes are banned, then they can start providing better training to more workers because there's no more needless red tape... >A non-compete allows a company to make an investment in you (in the form of training) with some assurance that you will not immediately turn around post-training and go work for a direct competitor. Then why to most non-competes extend 2 years after you leave a company, and why do they get applied to workers who have been with a company for years? You, like many others in this thread, seem to be confusing "experience", a thing the employee owns, with "training" and "know-how", things the employer owns.