3 ms·

How is coming up with regulation around non-compete clauses (and then further regulation attempting to close loopholes such as the ones mentioned by sibling com

How is coming up with regulation around non-compete clauses (and then further regulation attempting to close loopholes such as the ones mentioned by sibling comments) simpler than just outlawing them?

fiblye 8y ago
Most people don’t know whether they’re enforceable. Businesses will do anything they can to intimidate people and simple unenforcement doesn’t really do much.
olliej 8y ago
How many low wage workers are aware that a non-compete clause is not enforceable in CA? Many contracts have it present, and businesses like to call attention to them, making it perhaps non-obvious that they are meaningless?
- jakelazaroff 8y ago
  Sure. But how do your regulations solve that? Presumably businesses would still be free to not mention the pay requirement in the contract. And even though they'd be obligated to actually pay if it came down to it, many people wouldn't be aware of that — bringing us back to square one. You could require them to mention it, but that's just a more complicated version of banning it outright.
  - chongli 8y ago
    But how do your regulations solve that? The difference is the matter of liability. In the regulation case, a business found to be in arrears could be hit with a very large judgement. On the other hand, if non-competes were simply banned and employees were unaware of the law, they could still suffer under the chilling effect of an unenforceable clause in their contract. To then discover the problem later and show damages in court would be much more difficult.
  - olliej 8y ago
    Until you get a class action law suit on the grounds, also (in light of your comment - companies that are intentionally screwing people are going to continue to screw them hoping to be ahead on balance) I'd add significant penalties for delayed payments.
Broken_Hippo 8y ago
There are a few positions where non-competes are understandable. It is easier to carve out strict guidelines for having a none-compete than it is to exempt low-wage workers or have a comprehensive list of things that qualify for a non-compete. So instead, make non-compete clauses really unattractive for your average employee. This would include things like paying the average wage over the last year, including any bonuses (or paying the average bonuses or prorating them another way), continuing to pay benefits such as health insurance contributions so the employee doesn't pay more, and things like that. I'd even be willing to put a penalty so the company would have to pay a bit more if their pay rate doesn't meet the industry standard in the area.

fiblye 8y ago

Most people don’t know whether they’re enforceable. Businesses will do anything they can to intimidate people and simple unenforcement doesn’t really do much.

olliej 8y ago

How many low wage workers are aware that a non-compete clause is not enforceable in CA? Many contracts have it present, and businesses like to call attention to them, making it perhaps non-obvious that they are meaningless?

jakelazaroff 8y ago
Sure. But how do your regulations solve that? Presumably businesses would still be free to not mention the pay requirement in the contract. And even though they'd be obligated to actually pay if it came down to it, many people wouldn't be aware of that — bringing us back to square one. You could require them to mention it, but that's just a more complicated version of banning it outright.
- chongli 8y ago
  But how do your regulations solve that? The difference is the matter of liability. In the regulation case, a business found to be in arrears could be hit with a very large judgement. On the other hand, if non-competes were simply banned and employees were unaware of the law, they could still suffer under the chilling effect of an unenforceable clause in their contract. To then discover the problem later and show damages in court would be much more difficult.
- olliej 8y ago
  Until you get a class action law suit on the grounds, also (in light of your comment - companies that are intentionally screwing people are going to continue to screw them hoping to be ahead on balance) I'd add significant penalties for delayed payments.

Broken_Hippo 8y ago

There are a few positions where non-competes are understandable. It is easier to carve out strict guidelines for having a none-compete than it is to exempt low-wage workers or have a comprehensive list of things that qualify for a non-compete. So instead, make non-compete clauses really unattractive for your average employee. This would include things like paying the average wage over the last year, including any bonuses (or paying the average bonuses or prorating them another way), continuing to pay benefits such as health insurance contributions so the employee doesn't pay more, and things like that. I'd even be willing to put a penalty so the company would have to pay a bit more if their pay rate doesn't meet the industry standard in the area.