4 ms·

More people need to challenge non-compete agreements. In the majority of cases (especially for non-management employees) they're illegal and don't hold up.

vkou 7y ago
No, a majority of the time, they are not illegal outside of California. State legislatures have been doing a great job in preventing non-competes from being banned, because they aren't scared of organized political action by labour.
- Mikeb85 7y ago
  I said in a majority of cases. The legality doesn't have to do with whether or not they're allowed by the state (they're allowed everywhere, even in California), but whether or not they can apply to the person signing the agreement. Courts uphold non-competes against managers moving to a competitor, workers taking client lists, former equity stakeholders, etc..., but almost never against low-level employees.
- Nasrudith 7y ago
  It is also interesting game-theory wise that we see countless towns and states trying to be 'the next Silicon Valley' but that is one thing that they never do that could put them in some degree of competition. Especially places with other assets such as having many prominent universities.
  - doctorpangloss 7y ago
    Businesses so successful that they have no need to do anything weird to their employees are super rare. And non-competes are one of those things that very weakly impact a bottom line. So some Darwinian process with cities and companies or whatever is never going to select for, "No noncompetes." The bigger question is if you really believe that the "laboratories" / Darwinian process of cities and regulations and states and whatever idea in the first place. It's a conjecture by some credible, mainstream public intellectuals. The biggest evidence for it is cities/states accommodating tax avoidance, which so directly affects the bottom line that it's basically an apples-to-oranges comparison with anything less concrete like non-competes.
    - whatshisface 7y ago
      Why would it select for no non-competes when people are willing to sign them and a culture of legal "take anything you can get"-ism among employers pays off in other areas?
shims 7y ago
That's time consuming and expensive. If you found yourself in a situation where you're signing a non-compete out of desperation, you're lacking in both time and resources.
- a3n 7y ago
  I was desperate for work and signed a non-compete for a security guard job, one of the easiest jobs to get. If I got a job at a competitor within N miles I would have had to pay $Xtimes1000 to my current employer. Sheesh.
  - pbhjpbhj 7y ago
    Presumably you'd just not pay, and the non-compete, being illegal, would never make it to court?
  - Mikeb85 7y ago
    No way it makes it to court. Not to mention, what damages would they claim? Punitive damages for an employee leaving aren't a thing.
    - simple_phrases 7y ago
      Doesn't have to make it to court for them to strongarm you into a settlement. The threat of a lawsuit is enough for many to agree on a settlement just so it doesn't go to court, even if you'd likely win as a defendant. Lawyers are expensive and so is the appeals process.
      - Mikeb85 7y ago
        > Doesn't have to make it to court for them to strongarm you into a settlement. And what would they threaten you with? Bring that lawsuit before a judge and they'd laugh you out of the building. They'd probably have their corporate lawyer write a mean sounding letter, you'd ignore, no way anything happens beyond that.
harimau777 7y ago
The issue could be that the potential employer is not willing to hire someone under a non-compete even if the person under the non-compete is willing to challenge it.
thomasahle 7y ago
That's another case where a union is very useful. For the individual, challenging a non-compete agreement is probably not worth it. But amortising the cost over everyone who benefits it becomes a very reasonable thing to do.
- odyssey7 7y ago
  Just tack on a mandatory individual arbitration agreement and this option is gone, too.

vkou 7y ago

No, a majority of the time, they are not illegal outside of California. State legislatures have been doing a great job in preventing non-competes from being banned, because they aren't scared of organized political action by labour.

Mikeb85 7y ago
I said in a majority of cases. The legality doesn't have to do with whether or not they're allowed by the state (they're allowed everywhere, even in California), but whether or not they can apply to the person signing the agreement. Courts uphold non-competes against managers moving to a competitor, workers taking client lists, former equity stakeholders, etc..., but almost never against low-level employees.
Nasrudith 7y ago
It is also interesting game-theory wise that we see countless towns and states trying to be 'the next Silicon Valley' but that is one thing that they never do that could put them in some degree of competition. Especially places with other assets such as having many prominent universities.
- doctorpangloss 7y ago
  Businesses so successful that they have no need to do anything weird to their employees are super rare. And non-competes are one of those things that very weakly impact a bottom line. So some Darwinian process with cities and companies or whatever is never going to select for, "No noncompetes." The bigger question is if you really believe that the "laboratories" / Darwinian process of cities and regulations and states and whatever idea in the first place. It's a conjecture by some credible, mainstream public intellectuals. The biggest evidence for it is cities/states accommodating tax avoidance, which so directly affects the bottom line that it's basically an apples-to-oranges comparison with anything less concrete like non-competes.
  - whatshisface 7y ago
    Why would it select for no non-competes when people are willing to sign them and a culture of legal "take anything you can get"-ism among employers pays off in other areas?

shims 7y ago

That's time consuming and expensive. If you found yourself in a situation where you're signing a non-compete out of desperation, you're lacking in both time and resources.

a3n 7y ago
I was desperate for work and signed a non-compete for a security guard job, one of the easiest jobs to get. If I got a job at a competitor within N miles I would have had to pay $Xtimes1000 to my current employer. Sheesh.
- pbhjpbhj 7y ago
  Presumably you'd just not pay, and the non-compete, being illegal, would never make it to court?
- Mikeb85 7y ago
  No way it makes it to court. Not to mention, what damages would they claim? Punitive damages for an employee leaving aren't a thing.
  - simple_phrases 7y ago
    Doesn't have to make it to court for them to strongarm you into a settlement. The threat of a lawsuit is enough for many to agree on a settlement just so it doesn't go to court, even if you'd likely win as a defendant. Lawyers are expensive and so is the appeals process.
    - Mikeb85 7y ago
      > Doesn't have to make it to court for them to strongarm you into a settlement. And what would they threaten you with? Bring that lawsuit before a judge and they'd laugh you out of the building. They'd probably have their corporate lawyer write a mean sounding letter, you'd ignore, no way anything happens beyond that.

harimau777 7y ago

The issue could be that the potential employer is not willing to hire someone under a non-compete even if the person under the non-compete is willing to challenge it.

thomasahle 7y ago

That's another case where a union is very useful. For the individual, challenging a non-compete agreement is probably not worth it. But amortising the cost over everyone who benefits it becomes a very reasonable thing to do.

odyssey7 7y ago
Just tack on a mandatory individual arbitration agreement and this option is gone, too.