3 ms·

I'd just like to point out that there is a case to be made for noncompetes, they're not just a terrible thing that companies do because they can. I recommend re

by edanm 9y ago

I'd just like to point out that there is a case to be made for noncompetes, they're not just a terrible thing that companies do because they can. I recommend reading "The Case for Non-Competes" by David Henderson (http://econlog.econlib.org/archives/2016/11/the_case_for_no.html http://econlog.econlib.org/archives/2016/11/the_case_for_no....). Here's a relevant quote (in which the author is actually quoting Aaron McNay): " Both employers and employees would like to be able to train the employees if the cost of doing so is less than the gains in productivity. However, there is a potential collective action problem here. What happens if the employer provides the training, but the employee then moves onto another job? The employer bears the burden of the training costs, but does not receive any of the benefits. As a result, the employer does not provide the training, and a mutually beneficial trade is not made. By preventing the employee from being able to move, a non-compete agreement eliminates the collective action problem." I'm not saying that non-competes are necessarily good, or necessarily bad. It depends on the circumstances. But I do think that a lot of other commenters in this thread do think that non-competes are necessarily bad, and I think that's incorrect.

Macha 9y ago
In the example you gave, you could make an argument like that but it'd still only feel any way fair iff: * It started from the start of the contract/end of the initial training. * It was for a period much shorter than 2 years * It was voided if the employer terminated the contract
- edanm 9y ago
  Why would it only feel fair based on some "arbitrary" rules you intuitively feel are right? Why not let people negotiate based on their personal situations, and let the market eventually sort out what combination works best? After all, for high enough salaries, I'd probably agree to very onerous terms. Specfically about your list, I think the reason the period doesn't usually start from the end of training, but rather the end of employment, is that it is assumed you continue to have access to more training / more confidential information, even if you work for a company for longer than the few months of training. And I certainly hope most people work in a job in which they continue to grow/learn. As for voiding if the contract if the employee is fired, why make that a condition? Wouldn't that just mean the bar for hiring new employees would be even higher, because if they don't work out, you're both wasting lots of investment, and also running the risk of them taking your methods to a new company?
  - Macha 9y ago
    > Why would it only feel fair based on some "arbitrary" rules you intuitively feel are right? Why not let people negotiate based on their personal situations, and let the market eventually sort out what combination works best? Because the best solution from an economic position can involve screwing over people in more vulnerable positions? From TFA we have manual labourers and QC workers in a factory being forced into non-competes. These are not people with much power in the free market. > Wouldn't that just mean the bar for hiring new employees would be even higher, because if they don't work out, you're both wasting lots of investment, and also running the risk of them taking your methods to a new company? I mean, if they sucked at following the methods to the point you let them go, surely their attempt at bringing them to a new company would likely backfire
bb611 9y ago
A contract can already account for training costs if an employee leaves - simply have a clause indicating a charge to the employee for the company's cost of training them if they leave before [date when training is paid for by employment]. This is actually very common in US employment contracts, and supported by case law in many states, including CA: http://www.thelelawblog.com/2016/02/articles/new-legislation-and-regulations/employers-can-demand-departing-employees-repay-training-costs/ http://www.thelelawblog.com/2016/02/articles/new-legislation... I don't see how non-competes are a desirable alternative, because they're orthogonal to the training costs problem.

by edanm 9y ago

Macha 9y ago

In the example you gave, you could make an argument like that but it'd still only feel any way fair iff: * It started from the start of the contract/end of the initial training. * It was for a period much shorter than 2 years * It was voided if the employer terminated the contract

edanm 9y ago
Why would it only feel fair based on some "arbitrary" rules you intuitively feel are right? Why not let people negotiate based on their personal situations, and let the market eventually sort out what combination works best? After all, for high enough salaries, I'd probably agree to very onerous terms. Specfically about your list, I think the reason the period doesn't usually start from the end of training, but rather the end of employment, is that it is assumed you continue to have access to more training / more confidential information, even if you work for a company for longer than the few months of training. And I certainly hope most people work in a job in which they continue to grow/learn. As for voiding if the contract if the employee is fired, why make that a condition? Wouldn't that just mean the bar for hiring new employees would be even higher, because if they don't work out, you're both wasting lots of investment, and also running the risk of them taking your methods to a new company?
- Macha 9y ago
  > Why would it only feel fair based on some "arbitrary" rules you intuitively feel are right? Why not let people negotiate based on their personal situations, and let the market eventually sort out what combination works best? Because the best solution from an economic position can involve screwing over people in more vulnerable positions? From TFA we have manual labourers and QC workers in a factory being forced into non-competes. These are not people with much power in the free market. > Wouldn't that just mean the bar for hiring new employees would be even higher, because if they don't work out, you're both wasting lots of investment, and also running the risk of them taking your methods to a new company? I mean, if they sucked at following the methods to the point you let them go, surely their attempt at bringing them to a new company would likely backfire

bb611 9y ago

A contract can already account for training costs if an employee leaves - simply have a clause indicating a charge to the employee for the company's cost of training them if they leave before [date when training is paid for by employment]. This is actually very common in US employment contracts, and supported by case law in many states, including CA: http://www.thelelawblog.com/2016/02/articles/new-legislation-and-regulations/employers-can-demand-departing-employees-repay-training-costs/ http://www.thelelawblog.com/2016/02/articles/new-legislation... I don't see how non-competes are a desirable alternative, because they're orthogonal to the training costs problem.