4 ms·

> Make them fair, not unenforceable. Nice idea. How do you do that in practice? How does the judicial system decide what NCA is "fair"? The cost of the NCA t

> Make them fair, not unenforceable. Nice idea. How do you do that in practice? How does the judicial system decide what NCA is "fair"? The cost of the NCA to the employee can be heavy. How do you "fairly" value it? In reality you'll get what you have right now, where entire industries (and certainly entire companies) simply mandate NCAs in all their contracts and there's no way to remove it or get compensated for it. Don't like it? Decline the offer. Oh, and good luck getting an offer that doesn't require it - they all do.

woolvalley 8y ago
Full pay for the length of the non-compete + insurance to cover the company going insolvent. Otherwise it's illegal to even put it in the contract
- dunpeal 8y ago
  Not a bad attempt, but what's "full pay"? For most senior engineers, the base salary is just a part of the compensation package. What about bonus? Also, most employees move for a better opportunity, which often means a much better base comp + potential for much higher bonus. If I'm not going to be compensated for that, how is that "fair"? Finally, my resume and likely my skillset will take a hit for sitting 1-2 years at home. Where's the compensation for that?
  - woolvalley 8y ago
    Full pay would be your tax return saying what the full amount of compensation you got from the employer. Stock rewards, bonuses, etc are all reported from specific employers. Your highest year in your previous years of employment with the employer is the year I would chose. And add other benefits like health insurance and such. Basically your still 'employed' on garden leave with the company until the non-compete period runs out. By making table stakes very expensive, the likelihood of companies even putting them into contracts will reduce to a small minority. The problem with non-competes right now is they are free and easy to put into contracts, and in practice the vast majority of employees do not refuse employment over it due to power asymmetry. They further more create chilling effects for employees to switch companies and thus make employees cheaper to hire due to the liquidity reduction. The other objections you bring up you can negotiate for yourself :) . If they were willing to put up the table stakes, you're probably an important hire to put that in for and thus probably have negotiation power.
    - dunpeal 8y ago
      OK, I think full taxable income is a nice suggestion. But it will require legislation, i.e. probably will never happen. Moreover, the point of the article is that NCAs are a long-term drag on the economy. If the main reason there's SV in California and not near Boston, is the lack of NCAs, then that seems like a huge cost and a drag on the economy as a whole.
      - ryandrake 8y ago
        It’s not a huge cost because if “full taxable income” became law, every non compete would instantly disappear overnight.
        anticensor 8y ago
        No, they (the parliament) would make noncompetes mandatory like they made arbiters mandatory (as in, courts will statutorily turn you down if you skip the arbiter; this is way worse than, for example, alienable right to sue in the US, as you cannot contractually leave this out) in Turkey (OK, not in all cases; but employment, insolvency and customer issues are not small problems). Expect way worse in liberal jurisdictions such as US. And no one would object even if it were obviously unconstitutional (right to sue is inalienable here).
- InitialLastName 8y ago
  Real question: if the company one has an NCA with goes insolvent, does the NCA matter? Who would enforce it? Presumably, if somebody picks up the employees in a buyout, those would now be said company's employees and the company would be on the hook for the "Pay for the length of the non-compete" bit.
  - dragonwriter 8y ago
    > Real question: if the company one has an NCA with goes insolvent, does the NCA matter? Yes, an insolvent company still exists. If it is dissolved and it's interest in the NCA wasn't transferred (either because noone wanted it or it wasn't legally transferrable), then it doesn't matter, but mere insolvency isn't the same (in fact, if it can collect money for violations, insolvency may lead it to be more aggressive.) > Who would enforce it? The insolvent firm itself, which may be effectively run by (or for the benefit of) its creditors.
  - woolvalley 8y ago
    You could put that too, the non-compete goes away if the firm goes insolvent / can't pay in liu of insurance.
geebee 8y ago
IANAL, is there a legal distinction between unenforceable and not enforced as a matter of policy? The second could encompass a contract clause that is enforceable as a practical matter, but not considered desirable. The first could include things that are desirable, but impossible for a court to enforce as a practical matter. I'm inclined to think that non-competes are both undesirable and unenforceable as a practical matter, though I understand many states to enforce them. The reason I focus on the unenforceable as a practical matter is 1) that jobs so often aren't what they are advertised to be, and 2) courts, as a practical concern, don't see a realistic role for themselves as long term regulators over who is allowed to work where on a practical level. I can see this working perhaps in extremely limited conditions, but that goes into undesirable - to enforce these, you're asking the courts to rule that the employer upheld its side of the contract where it came to a job, determine specifically that the new job falls within the contract, becomes an enforcer over some worker's life determining where and how he/she is allowed to work... and all for what?
dragonwriter 8y ago
> > Make them fair, not unenforceable. > Nice idea. How do you do that in practice? Require them to be reciprocal; if I am prohibited from working for anyone else but you in some kind of work for a set term, without your sign-off, then you are also prohibited from employing anyone else in that field, directly or indirectly, for the same term, without my sign-off.
- kiriakasis 8y ago
  As the saying goes, two wrongs don't make a right.

woolvalley 8y ago

Full pay for the length of the non-compete + insurance to cover the company going insolvent. Otherwise it's illegal to even put it in the contract

dunpeal 8y ago
Not a bad attempt, but what's "full pay"? For most senior engineers, the base salary is just a part of the compensation package. What about bonus? Also, most employees move for a better opportunity, which often means a much better base comp + potential for much higher bonus. If I'm not going to be compensated for that, how is that "fair"? Finally, my resume and likely my skillset will take a hit for sitting 1-2 years at home. Where's the compensation for that?
- woolvalley 8y ago
  Full pay would be your tax return saying what the full amount of compensation you got from the employer. Stock rewards, bonuses, etc are all reported from specific employers. Your highest year in your previous years of employment with the employer is the year I would chose. And add other benefits like health insurance and such. Basically your still 'employed' on garden leave with the company until the non-compete period runs out. By making table stakes very expensive, the likelihood of companies even putting them into contracts will reduce to a small minority. The problem with non-competes right now is they are free and easy to put into contracts, and in practice the vast majority of employees do not refuse employment over it due to power asymmetry. They further more create chilling effects for employees to switch companies and thus make employees cheaper to hire due to the liquidity reduction. The other objections you bring up you can negotiate for yourself :) . If they were willing to put up the table stakes, you're probably an important hire to put that in for and thus probably have negotiation power.
  - dunpeal 8y ago
    OK, I think full taxable income is a nice suggestion. But it will require legislation, i.e. probably will never happen. Moreover, the point of the article is that NCAs are a long-term drag on the economy. If the main reason there's SV in California and not near Boston, is the lack of NCAs, then that seems like a huge cost and a drag on the economy as a whole.
    - ryandrake 8y ago
      It’s not a huge cost because if “full taxable income” became law, every non compete would instantly disappear overnight.
      - anticensor 8y ago
        No, they (the parliament) would make noncompetes mandatory like they made arbiters mandatory (as in, courts will statutorily turn you down if you skip the arbiter; this is way worse than, for example, alienable right to sue in the US, as you cannot contractually leave this out) in Turkey (OK, not in all cases; but employment, insolvency and customer issues are not small problems). Expect way worse in liberal jurisdictions such as US. And no one would object even if it were obviously unconstitutional (right to sue is inalienable here).
InitialLastName 8y ago
Real question: if the company one has an NCA with goes insolvent, does the NCA matter? Who would enforce it? Presumably, if somebody picks up the employees in a buyout, those would now be said company's employees and the company would be on the hook for the "Pay for the length of the non-compete" bit.
- dragonwriter 8y ago
  > Real question: if the company one has an NCA with goes insolvent, does the NCA matter? Yes, an insolvent company still exists. If it is dissolved and it's interest in the NCA wasn't transferred (either because noone wanted it or it wasn't legally transferrable), then it doesn't matter, but mere insolvency isn't the same (in fact, if it can collect money for violations, insolvency may lead it to be more aggressive.) > Who would enforce it? The insolvent firm itself, which may be effectively run by (or for the benefit of) its creditors.
- woolvalley 8y ago
  You could put that too, the non-compete goes away if the firm goes insolvent / can't pay in liu of insurance.

geebee 8y ago

IANAL, is there a legal distinction between unenforceable and not enforced as a matter of policy? The second could encompass a contract clause that is enforceable as a practical matter, but not considered desirable. The first could include things that are desirable, but impossible for a court to enforce as a practical matter. I'm inclined to think that non-competes are both undesirable and unenforceable as a practical matter, though I understand many states to enforce them. The reason I focus on the unenforceable as a practical matter is 1) that jobs so often aren't what they are advertised to be, and 2) courts, as a practical concern, don't see a realistic role for themselves as long term regulators over who is allowed to work where on a practical level. I can see this working perhaps in extremely limited conditions, but that goes into undesirable - to enforce these, you're asking the courts to rule that the employer upheld its side of the contract where it came to a job, determine specifically that the new job falls within the contract, becomes an enforcer over some worker's life determining where and how he/she is allowed to work... and all for what?

dragonwriter 8y ago

> > Make them fair, not unenforceable. > Nice idea. How do you do that in practice? Require them to be reciprocal; if I am prohibited from working for anyone else but you in some kind of work for a set term, without your sign-off, then you are also prohibited from employing anyone else in that field, directly or indirectly, for the same term, without my sign-off.

kiriakasis 8y ago
As the saying goes, two wrongs don't make a right.