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I just had coffee, so please double-check the workings of my brain. Doesn't the author mean "consistent?" > Banning noncompetes would be inconsistent with Texa

I just had coffee, so please double-check the workings of my brain. Doesn't the author mean "consistent?" > Banning noncompetes would be inconsistent with Texas’ principles and reputation as a defender of free markets. Noncompete agreements are restrictions on the free movement of labor; they gum up markets.

voisin 6y ago
Regulating non-competes is not consistent with a free market where individual actors are expected to negotiate on their own behalf. “Inconsistent” is correct usage here.
- neogodless 6y ago
  I should've included this sentence that follows. Essentially the market freedom is more important than individual companies, but noncompete agreements put companies above the market. > Ultimately, the market is more important than the prerogatives of any particular company.
  - sokoloff 6y ago
    I do not like non-competes, but I don’t think they put companies who use them above the market. In a multi-turn game, company A which uses non-competes would have to offer something else in exchange to be preferred (or equal) to company B which does not. Employees who then accept whatever that was are indeed bound by it when they want to consider moving to companies B, C, or D, but I see all of those as market actions. If some employees take jobs without thinking about their future position, I’m not convinced that’s a widespread market failure. I’ve asked about and read IP and non-compete clauses at every role I’ve ever taken before accepting the position. Only once has it affected my choice; several times I had to negotiate redlines in the documents (which went smoothly as both sides were being reasonable).
    - neogodless 6y ago
      This got me to thinking about the possible shift to a much more remote work force triggered by the pandemic. Obviously information workers are largely remote right now, but we still don't know how many companies will insist on going back to physical offices when they can. The reason I'm thinking about this is because unless another comment above, I've seen non-competes pretty often. And I also had to negotiate redlines. I didn't think about this early in my career, but then I changed employers... and ended up sued. The new employer paid for a lawyer and it was largely non-issue, though at my age, I found it a very harrowing experience (and an education.) Many hopefully won't get that same experience, but they may also lack the education or wisdom to negotiate around non-competes. In the physical world, some non-competes would essentially require you to pack up and move if you want to remain in the same line of work. That's great for a company, and terrible for talent. Remote work would eliminate that particular effect - assuming non-competes were still worded around physical geography. But a well-worded non-compete that applies universally could very well tie someones hands - either leave your line of work, or stay with the employer that now owns you. All "free market" theories emphasize individual choice, and they all rely on individuals having the ability and information to make those choices. But non-compete (basically the exact phrase meaning to eliminate competition and therefore choice) agreements tend to be giving companies the power to remove choice from individual employees. So while theoretically a "perfect" market would result in all employees mindfully rejecting non-compete and choosing incentives wisely, this would seem to fall into a similar category as other "big business, big lawyer team" situations, where the advantage lies clearly with those in power, not individuals trying to have and make choices. Laws against monopolies, and attempts to prevent propaganda and misinformation that take choice away from individuals exist as a check against power imbalances that remove freedom from markets.
    - deleted 6y ago
      [deleted]
- jcims 6y ago
  I agree with your take but if you read the second quoted sentence there is something that is out of alignment in the whole.
  - ghaff 6y ago
    I agree. There's probably a free market argument (though I wouldn't make it) that banning non-competes prevents two parties from willingly coming to a mutual agreement. But there are obviously limitations to the agreements we allow parties to make. And there are significant power asymmetries with respect to employment agreements.
vidarh 6y ago
Yes, it's pretty clear from context it should be "consistent".
mywittyname 6y ago
Allowing non-competes or forbidding them is zero-sum when it comes to how free the market is because of them. People have taken a mechanism for pricing goods in an economy and perverted it into some aspirational metric for economic correctness. So people on both sides try of an argument try to claim their idea is more "free market." Non-compete enforcement is largely pro- or anti-labor, but even that is a little disingenuous because non-competes also prevent companies from hiring labor with specific expertise. Whether they are enforced or not, the labor market will gradually shift to accommodate either position. If the market can adjust prices in response to some event, then it is a free market.
MrMorden 6y ago
To the extent that Texas has such a reputation, it's entirely unearned. The state loves sticking its nose into pretty much every area where it doesn't belong; they want to tell you on what days and from whom you can buy groceries; in many fields you're not allowed to start a business without permission from competitors; their gun laws are about as restrictive as they come while still being shall-issue; marijuana and gambling (except for the state-run numbers racket) are still illegal. The city governments of any political leaning aren't any better; Austin still hasn't legalized building housing other than detached single-family in the overwhelming majority of residential-zoned land. It may have low taxes, but Texas is the furthest thing imaginable from a small-government state.

voisin 6y ago

Regulating non-competes is not consistent with a free market where individual actors are expected to negotiate on their own behalf. “Inconsistent” is correct usage here.

neogodless 6y ago
I should've included this sentence that follows. Essentially the market freedom is more important than individual companies, but noncompete agreements put companies above the market. > Ultimately, the market is more important than the prerogatives of any particular company.
- sokoloff 6y ago
  I do not like non-competes, but I don’t think they put companies who use them above the market. In a multi-turn game, company A which uses non-competes would have to offer something else in exchange to be preferred (or equal) to company B which does not. Employees who then accept whatever that was are indeed bound by it when they want to consider moving to companies B, C, or D, but I see all of those as market actions. If some employees take jobs without thinking about their future position, I’m not convinced that’s a widespread market failure. I’ve asked about and read IP and non-compete clauses at every role I’ve ever taken before accepting the position. Only once has it affected my choice; several times I had to negotiate redlines in the documents (which went smoothly as both sides were being reasonable).
  - neogodless 6y ago
    This got me to thinking about the possible shift to a much more remote work force triggered by the pandemic. Obviously information workers are largely remote right now, but we still don't know how many companies will insist on going back to physical offices when they can. The reason I'm thinking about this is because unless another comment above, I've seen non-competes pretty often. And I also had to negotiate redlines. I didn't think about this early in my career, but then I changed employers... and ended up sued. The new employer paid for a lawyer and it was largely non-issue, though at my age, I found it a very harrowing experience (and an education.) Many hopefully won't get that same experience, but they may also lack the education or wisdom to negotiate around non-competes. In the physical world, some non-competes would essentially require you to pack up and move if you want to remain in the same line of work. That's great for a company, and terrible for talent. Remote work would eliminate that particular effect - assuming non-competes were still worded around physical geography. But a well-worded non-compete that applies universally could very well tie someones hands - either leave your line of work, or stay with the employer that now owns you. All "free market" theories emphasize individual choice, and they all rely on individuals having the ability and information to make those choices. But non-compete (basically the exact phrase meaning to eliminate competition and therefore choice) agreements tend to be giving companies the power to remove choice from individual employees. So while theoretically a "perfect" market would result in all employees mindfully rejecting non-compete and choosing incentives wisely, this would seem to fall into a similar category as other "big business, big lawyer team" situations, where the advantage lies clearly with those in power, not individuals trying to have and make choices. Laws against monopolies, and attempts to prevent propaganda and misinformation that take choice away from individuals exist as a check against power imbalances that remove freedom from markets.
  - deleted 6y ago
    [deleted]
jcims 6y ago
I agree with your take but if you read the second quoted sentence there is something that is out of alignment in the whole.
- ghaff 6y ago
  I agree. There's probably a free market argument (though I wouldn't make it) that banning non-competes prevents two parties from willingly coming to a mutual agreement. But there are obviously limitations to the agreements we allow parties to make. And there are significant power asymmetries with respect to employment agreements.

vidarh 6y ago

Yes, it's pretty clear from context it should be "consistent".

mywittyname 6y ago

Allowing non-competes or forbidding them is zero-sum when it comes to how free the market is because of them. People have taken a mechanism for pricing goods in an economy and perverted it into some aspirational metric for economic correctness. So people on both sides try of an argument try to claim their idea is more "free market." Non-compete enforcement is largely pro- or anti-labor, but even that is a little disingenuous because non-competes also prevent companies from hiring labor with specific expertise. Whether they are enforced or not, the labor market will gradually shift to accommodate either position. If the market can adjust prices in response to some event, then it is a free market.

MrMorden 6y ago

To the extent that Texas has such a reputation, it's entirely unearned. The state loves sticking its nose into pretty much every area where it doesn't belong; they want to tell you on what days and from whom you can buy groceries; in many fields you're not allowed to start a business without permission from competitors; their gun laws are about as restrictive as they come while still being shall-issue; marijuana and gambling (except for the state-run numbers racket) are still illegal. The city governments of any political leaning aren't any better; Austin still hasn't legalized building housing other than detached single-family in the overwhelming majority of residential-zoned land. It may have low taxes, but Texas is the furthest thing imaginable from a small-government state.