7 ms·

> "When I'm off the clock, my time is my own, up to and including doing paid work for anyone else I want." At least one of the reasons for a non-compete clause

> "When I'm off the clock, my time is my own, up to and including doing paid work for anyone else I want." At least one of the reasons for a non-compete clause is to make sure you're not doing stuff on the clock for your employer, and then getting double-paid by a competitor for essentially the same end result but without the competitor having to pay for the whole process of getting that result. Like, if they're paying you to spend 40 hours a week learning about the key problems in their industry and designing and implementing solutions, and then a competitor hires you for 10 hours a week to re-implement those solutions (not paying for the learning/designing phases). So the competitor is getting the benefit of work you're doing that in some sense should belong to your main employer. There might be something better than a non-compete clause for that sort of scenario, I just don't know what it is.

etjossem 9y ago
Generally this is covered under a confidentiality agreement, which forbids the disclosure of the company's intellectual property. The designs you mention in your example would be considered work-for-hire, and (depending on how specific/proprietary they were) if you sold them to a competitor on the sly, you might be in violation of such an agreement. So no, a noncompete - even one that only applies to the time you are employed by the company - isn't typically necessary.
- hammock 9y ago
  Extremely difficult to enforce, depending on the nature of the designs. Cf. the Waymo case for an example of an easier-than-average, but still difficult, case to enforce.
  - etjossem 9y ago
    Agreed. It's all a negotiation, though, and from the perspective of the employee you're going to want to present the confidentiality agreement (and possibly a term-of-employment noncompete) as sufficient to ensure your loyalty. You should under no circumstances agree to anything that restricts your options after term of employment.
- smallnamespace 9y ago
  Noncompetes are very common in finance because employees will gain access to proprietary knowledge (trading algorithms, signals, clients, strategies) that by definition have very high short-term (months to a year) value to a competitor. Confidentiality doesn't work that well because proving that a former employee disclosed proprietary information is very difficult. However, the ex-employee is generally paid at full salary for the time that they're unemployed, which seems like a very fair arrangement all around.
  - Spooky23 9y ago
    Usually when they really give a shit about the non-compete in finance, there's a term contract. My friend did commercial banking. He had a one year non-compete, but it was geographically scoped, and he also had multi-year contracts that protected him from layoff. They needed to release him for specific causes, buy out the contract, release his contractual obligations, or some combo.
    - smallnamespace 9y ago
      Another model I've seen is that everyone gets a blanket noncompete, but when the employee leaves, the business and legal folks get together and decide whether they really want to pay for the person to be unemployed. Usually it depends on the exact new position, whether it's at a direct competitor, how senior the person was, etc.
avmich 9y ago
However that's an insufficient argument for non-compete. The non-compete would prevent that, but also would prevent something much more reasonable.
mikeash 9y ago
If I'm implementing literally the same stuff at the same time then I bet that's a massive copyright violation. You have to take pains to avoid contamination when reverse engineering a product, for example, and that doesn't even involve the original staff. Seems that your argument could also be used to justify lifetime noncompetes. If I work for a company, gain experience, then go work for another company, they're getting the benefit of all of that experience without having to pay for the years it took to obtain it.
- lotharbot 9y ago
  But your next company is getting your prior experience, which becomes more out-of-date every day, not your up-to-the-minute experience on what might be an actively competing project.
  - thecrazyone 9y ago
    doesn't negate the problem stated as whatever the experience is, it's value is non-zero. Hence the benefit to later employers is also non-zero (could be argued) at the cost of earlier employers
    - lotharbot 9y ago
      the problem is more specific than the second employer getting non-zero value. It's getting ongoing value, under the table, direct from a present competitor -- harming the relative competitiveness of the first employer. The value of this, of course, depends very much on the specific industry and project. It doesn't really matter if your guy who builds generic websites for your clients also builds generic websites for a competitor's clients. That doesn't materially hurt the first employer. But it can matter a lot if your guy who you are paying to develop cutting-edge algorithms is deploying those algorithms to the competitor you're trying to beat. Instead of gaining an edge worth $X per year, your company instead gains only part of that advantage because at least one competitor is cutting into it.
Joeri 9y ago
However, many software firms have no issue with selling the development of a feature to customer A, and then selling a license for said feature to customer B. This is the same situation as selling the skills acquired at employer A to employer B. Why is it ok for employers to do this, but not for employees?
- dragonwriter 9y ago
  > Why is it ok for employers to do this, but not for employees? Why is the politico-economic system called "capitalism" and not "laborism"?
- hamstergene 9y ago
  It is much more than that. An employee sells not skills, but time of his life, the only one he's got. A company can make million sales, an employee can't work a million jobs.
mcv 9y ago
There's a huge difference between double dipping and signing away your right to work. Why is common sense in such short supply?

etjossem 9y ago

Generally this is covered under a confidentiality agreement, which forbids the disclosure of the company's intellectual property. The designs you mention in your example would be considered work-for-hire, and (depending on how specific/proprietary they were) if you sold them to a competitor on the sly, you might be in violation of such an agreement. So no, a noncompete - even one that only applies to the time you are employed by the company - isn't typically necessary.

hammock 9y ago
Extremely difficult to enforce, depending on the nature of the designs. Cf. the Waymo case for an example of an easier-than-average, but still difficult, case to enforce.
- etjossem 9y ago
  Agreed. It's all a negotiation, though, and from the perspective of the employee you're going to want to present the confidentiality agreement (and possibly a term-of-employment noncompete) as sufficient to ensure your loyalty. You should under no circumstances agree to anything that restricts your options after term of employment.
smallnamespace 9y ago
Noncompetes are very common in finance because employees will gain access to proprietary knowledge (trading algorithms, signals, clients, strategies) that by definition have very high short-term (months to a year) value to a competitor. Confidentiality doesn't work that well because proving that a former employee disclosed proprietary information is very difficult. However, the ex-employee is generally paid at full salary for the time that they're unemployed, which seems like a very fair arrangement all around.
- Spooky23 9y ago
  Usually when they really give a shit about the non-compete in finance, there's a term contract. My friend did commercial banking. He had a one year non-compete, but it was geographically scoped, and he also had multi-year contracts that protected him from layoff. They needed to release him for specific causes, buy out the contract, release his contractual obligations, or some combo.
  - smallnamespace 9y ago
    Another model I've seen is that everyone gets a blanket noncompete, but when the employee leaves, the business and legal folks get together and decide whether they really want to pay for the person to be unemployed. Usually it depends on the exact new position, whether it's at a direct competitor, how senior the person was, etc.

avmich 9y ago

However that's an insufficient argument for non-compete. The non-compete would prevent that, but also would prevent something much more reasonable.

mikeash 9y ago

If I'm implementing literally the same stuff at the same time then I bet that's a massive copyright violation. You have to take pains to avoid contamination when reverse engineering a product, for example, and that doesn't even involve the original staff. Seems that your argument could also be used to justify lifetime noncompetes. If I work for a company, gain experience, then go work for another company, they're getting the benefit of all of that experience without having to pay for the years it took to obtain it.

lotharbot 9y ago
But your next company is getting your prior experience, which becomes more out-of-date every day, not your up-to-the-minute experience on what might be an actively competing project.
- thecrazyone 9y ago
  doesn't negate the problem stated as whatever the experience is, it's value is non-zero. Hence the benefit to later employers is also non-zero (could be argued) at the cost of earlier employers
  - lotharbot 9y ago
    the problem is more specific than the second employer getting non-zero value. It's getting ongoing value, under the table, direct from a present competitor -- harming the relative competitiveness of the first employer. The value of this, of course, depends very much on the specific industry and project. It doesn't really matter if your guy who builds generic websites for your clients also builds generic websites for a competitor's clients. That doesn't materially hurt the first employer. But it can matter a lot if your guy who you are paying to develop cutting-edge algorithms is deploying those algorithms to the competitor you're trying to beat. Instead of gaining an edge worth $X per year, your company instead gains only part of that advantage because at least one competitor is cutting into it.

Joeri 9y ago

However, many software firms have no issue with selling the development of a feature to customer A, and then selling a license for said feature to customer B. This is the same situation as selling the skills acquired at employer A to employer B. Why is it ok for employers to do this, but not for employees?

dragonwriter 9y ago
> Why is it ok for employers to do this, but not for employees? Why is the politico-economic system called "capitalism" and not "laborism"?
hamstergene 9y ago
It is much more than that. An employee sells not skills, but time of his life, the only one he's got. A company can make million sales, an employee can't work a million jobs.

mcv 9y ago

There's a huge difference between double dipping and signing away your right to work. Why is common sense in such short supply?