5 ms·

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 ant

by 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.
      - greglindahl 10y ago
        You can imagine many things, but can you point to any evidence? Many people write blog postings about non-competes; I can't recall a single one where extra money was attached.
        nickff 10y ago
        If you agree with my supposition that forcing an employee to choose the lower-paying job with bad hours would make the agreement anti-employee, we should look at evidence of whether non-competes are paid for by employers. If you disagree with my supposition, we should address that first, as the rest of the argument depends entirely on that. My first piece of evidence for the proposition that employers pay for non-competes is that some of them prefer to hire employees with non-competes. Companies pay for everything they require of employees, as all unnecessary conditions reduce their options (for employees), and the only reason they ever offer money is to increase their options (from 0-1 or 100-200). In addition, it is very common for employers to value non-competes as assets (for accounting purposes). There are many other points in favor of the idea that companies do pay for non-competes, but we can start here.
        greglindahl 10y ago
        Sorry, I don't agree with how you approach the entire problem. Labor law exists mainly because there's information asymmetry between companies and employees. You seem to be presuming that there's a free market for labor; that's not the case when there's information asymmetry. Your "evidence" falls apart when there's information asymmetry.
        nickff 10y ago
        I think it is well known that there is information asymmetry in every transaction/deal/agreement involving more than one individual; saying that there is information asymmetry proves nothing. There is a highly regulated market for employees, and for employers. I didn't provide any evidence at all; I just asked if you agreed that in certain situations, it was possible for a non-compete ban to be anti-employee.
  - dredmorbius 10y ago
    You're raising the spectre of artificially nonfungible conditions, and ignoring power differentials between employers and employees, as well as game theory leading to non-optimal equilibria.
    - nickff 10y ago
      I don't understand what you mean when you say that I am "raising the spectre of artificially nonfungible conditions"; I described a possible situation, and asked whether you agreed that it was possible that non-compete bans could be 'anti-employee' per your definitions. I agree that I am ignoring many things, as this is a limited discussion, and I am only addressing the impact of a law on a single employee, and its ethical ramifications.
      - michaelmrose 10y ago
        Its possible in theory for employers to offer additional pay to work in conditions wherein the employee will be slowly poisoned where such additional pay is cheaper than proper safety equipment. Its even possible that the employer will find people dumb/ignorant enough to take this it doesn't mean its reasonable economically for the society to allow this sort of transaction. Your earlier scenario made no sense as their would be no reason to suspect that the 2 employers respective pay and conditions were related you have just presented it as such. Imagine the law were changed tomorrow? Would the high paying non compete using employer suddenly start paying smaller wages? Would they have any employees tomorrow if they did? A freer labor market would be MORE competitive not less there is no reason to suspect that they wouldn't have to pay more not less to retain the same talent.
      - dredmorbius 10y ago
        First, you're moving goalposts (the initial question was about how or why noncompetes are anti-worker, anti-competitive, and/or anti-innovative), and doing so without acknowledging the point. Chalk it up to my own history of arguing on the intartubes, but I find that tedious and generally a Bad Sign of things to come. Secondly: my second point answers my first. Markets don't manifest in individual transactions, they manifest as the emergent behaviour of multiple transactions. As others have noted, setting bounds to what can be traded away has proven necessary, empirically, to avoid winding up in a highly non-optimal equilibrium point. If you're interested in ethical ramifications, I recommend two excellent works on the topic: A Theory of Moral Sentiments and An Inquiry into the Nature and Causes of the Wealth of Nations. Even that treatment is unsatisfactory as it neglects considerations of short-term vs. long-term trade-offs. Your example is contrived in that it essentially poses a Sophie's Choice: give up condition of long-term viability A or because of my superior position in establishing and enforcing terms, give up condition of long-term viability B. The optimum condition would be for no artificial constraint on A or B imposed by the employer.
drawkbox 10y ago
I know this, when I get a non-compete it makes me not want to work on that project. It is like a reverse market regulation against workers that are bringing the productivity and skills to the company. Company: "Hey come here and build us this thing that makes us capable in this area, and when you are done you can't go on building things for other people". It almost seems like a fatal attraction or overly obsessed/attached owner/girlfriend. Non-competes are a kick in the nuts really to put it bluntly. You'll know the feeling when you get one. It is closer to a company trying to own a skilled worker rather than a partnership.
- nickff 10y ago
  You are speaking to emotions, which means I have no way of addressing your concerns, but I will try to highlight why I do not share your conclusions: >"makes me not want" I do not want to agree to many terms, so I do not agree to them; this does not make me want to ban those terms. >"It is like a reverse market regulation" Non-competes are 'like' any other business agreement to me. In any case, I am not sure what a 'reverse market regulation' is. >"seems like a fatal attraction or overly obsessed/attached owner/girlfriend" If you were analogizing an employer/employee relationship to a sexual one, they would seem most similar to a pimp or john; I do not think this is a useful analogy. >"are a kick in the nuts... You'll know the feeling" Many agreements feel unpleasant; I dislike any deal which obligates me to pay a large sum of money. This is interesting, but not very important to anyone else.
  - Gibbon1 10y ago
    The way I look at a job is you get paid three ways. 1. Money. 2. Skills and Knowledge. 3. Career Contacts. With non-competes a company is trying to screw you out of #2 and 3.
    - nickff 10y ago
      If you think non-compete agreements 'screw you out of #2 and 3", but still want the job (probably) because it is your best chance to get #1, it seems that you are being paid 1 in exchange for 2 and 3. The non-compete ban simply blinds you to the opportunity of selling 2 and 3.

by nickff 10y ago

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.
    - greglindahl 10y ago
      You can imagine many things, but can you point to any evidence? Many people write blog postings about non-competes; I can't recall a single one where extra money was attached.
      - nickff 10y ago
        If you agree with my supposition that forcing an employee to choose the lower-paying job with bad hours would make the agreement anti-employee, we should look at evidence of whether non-competes are paid for by employers. If you disagree with my supposition, we should address that first, as the rest of the argument depends entirely on that. My first piece of evidence for the proposition that employers pay for non-competes is that some of them prefer to hire employees with non-competes. Companies pay for everything they require of employees, as all unnecessary conditions reduce their options (for employees), and the only reason they ever offer money is to increase their options (from 0-1 or 100-200). In addition, it is very common for employers to value non-competes as assets (for accounting purposes). There are many other points in favor of the idea that companies do pay for non-competes, but we can start here.
        greglindahl 10y ago
        Sorry, I don't agree with how you approach the entire problem. Labor law exists mainly because there's information asymmetry between companies and employees. You seem to be presuming that there's a free market for labor; that's not the case when there's information asymmetry. Your "evidence" falls apart when there's information asymmetry.
        nickff 10y ago
        I think it is well known that there is information asymmetry in every transaction/deal/agreement involving more than one individual; saying that there is information asymmetry proves nothing. There is a highly regulated market for employees, and for employers. I didn't provide any evidence at all; I just asked if you agreed that in certain situations, it was possible for a non-compete ban to be anti-employee.
- dredmorbius 10y ago
  You're raising the spectre of artificially nonfungible conditions, and ignoring power differentials between employers and employees, as well as game theory leading to non-optimal equilibria.
  - nickff 10y ago
    I don't understand what you mean when you say that I am "raising the spectre of artificially nonfungible conditions"; I described a possible situation, and asked whether you agreed that it was possible that non-compete bans could be 'anti-employee' per your definitions. I agree that I am ignoring many things, as this is a limited discussion, and I am only addressing the impact of a law on a single employee, and its ethical ramifications.
    - michaelmrose 10y ago
      Its possible in theory for employers to offer additional pay to work in conditions wherein the employee will be slowly poisoned where such additional pay is cheaper than proper safety equipment. Its even possible that the employer will find people dumb/ignorant enough to take this it doesn't mean its reasonable economically for the society to allow this sort of transaction. Your earlier scenario made no sense as their would be no reason to suspect that the 2 employers respective pay and conditions were related you have just presented it as such. Imagine the law were changed tomorrow? Would the high paying non compete using employer suddenly start paying smaller wages? Would they have any employees tomorrow if they did? A freer labor market would be MORE competitive not less there is no reason to suspect that they wouldn't have to pay more not less to retain the same talent.
    - dredmorbius 10y ago
      First, you're moving goalposts (the initial question was about how or why noncompetes are anti-worker, anti-competitive, and/or anti-innovative), and doing so without acknowledging the point. Chalk it up to my own history of arguing on the intartubes, but I find that tedious and generally a Bad Sign of things to come. Secondly: my second point answers my first. Markets don't manifest in individual transactions, they manifest as the emergent behaviour of multiple transactions. As others have noted, setting bounds to what can be traded away has proven necessary, empirically, to avoid winding up in a highly non-optimal equilibrium point. If you're interested in ethical ramifications, I recommend two excellent works on the topic: A Theory of Moral Sentiments and An Inquiry into the Nature and Causes of the Wealth of Nations. Even that treatment is unsatisfactory as it neglects considerations of short-term vs. long-term trade-offs. Your example is contrived in that it essentially poses a Sophie's Choice: give up condition of long-term viability A or because of my superior position in establishing and enforcing terms, give up condition of long-term viability B. The optimum condition would be for no artificial constraint on A or B imposed by the employer.

drawkbox 10y ago

I know this, when I get a non-compete it makes me not want to work on that project. It is like a reverse market regulation against workers that are bringing the productivity and skills to the company. Company: "Hey come here and build us this thing that makes us capable in this area, and when you are done you can't go on building things for other people". It almost seems like a fatal attraction or overly obsessed/attached owner/girlfriend. Non-competes are a kick in the nuts really to put it bluntly. You'll know the feeling when you get one. It is closer to a company trying to own a skilled worker rather than a partnership.

nickff 10y ago
You are speaking to emotions, which means I have no way of addressing your concerns, but I will try to highlight why I do not share your conclusions: >"makes me not want" I do not want to agree to many terms, so I do not agree to them; this does not make me want to ban those terms. >"It is like a reverse market regulation" Non-competes are 'like' any other business agreement to me. In any case, I am not sure what a 'reverse market regulation' is. >"seems like a fatal attraction or overly obsessed/attached owner/girlfriend" If you were analogizing an employer/employee relationship to a sexual one, they would seem most similar to a pimp or john; I do not think this is a useful analogy. >"are a kick in the nuts... You'll know the feeling" Many agreements feel unpleasant; I dislike any deal which obligates me to pay a large sum of money. This is interesting, but not very important to anyone else.
- Gibbon1 10y ago
  The way I look at a job is you get paid three ways. 1. Money. 2. Skills and Knowledge. 3. Career Contacts. With non-competes a company is trying to screw you out of #2 and 3.
  - nickff 10y ago
    If you think non-compete agreements 'screw you out of #2 and 3", but still want the job (probably) because it is your best chance to get #1, it seems that you are being paid 1 in exchange for 2 and 3. The non-compete ban simply blinds you to the opportunity of selling 2 and 3.