4 ms·

Biden Moves to Restrict Non-Compete Agreements, Saying They're Bad for Workers

32 points by boulos 5y ago

cf100clunk 5y ago
This new Executive Order seems to be an omnibus tackling of many issues dear to HN readers/members as well as U.S. consumers. More here: https://news.ycombinator.com/item?id=27785964 https://news.ycombinator.com/item?id=27785964
- rsj_hn 5y ago
  Not really sure what can be accomplished with an EO in this arena. Perhaps tell the executive branch not to require any non-competes in their own hiring practices? Ask them to not do business with contractors that use non-competes? The latter is tougher as it is already subject to a number of laws. It would be nice if someone more knowledgeable on this site can let us know how an EO can nullify a non-compete that someone has agreed to, or prevent a company from requiring non-competes in the future.
  - perl4ever 5y ago
    Not being a lawyer, I would think that an EO can be used in any case where there is a long standing policy to ignore existing law or interpret it in a particular way. So what laws might apply? The FTC says: "The Sherman Act outlaws "every contract, combination, or conspiracy in restraint of trade," and any "monopolization, attempted monopolization, or conspiracy or combination to monopolize." Long ago, the Supreme Court decided that the Sherman Act does not prohibit every restraint of trade, only those that are unreasonable." https://www.ftc.gov/tips-advice/competition-guidance/guide-antitrust-laws/antitrust-laws https://www.ftc.gov/tips-advice/competition-guidance/guide-a... So maybe enormous power could be found in the executive branch by simply declaring that non-competes are "unreasonable" and defending that in court.
    - yeuxardents 5y ago
      I think the larger issue of accomplishing this, and many other actions, via EO, is that the nexts administration can simply turn around and revoke or alter at-will. We saw that from Obama->Trump->Biden administrations pretty swiftly in first few months of each successive administration.
      - rsj_hn 5y ago
        Right, this is why EOs don't have the force or law or are able to change how courts interpret existing law. They are rules for the federal administration only, but they can have an effect by the power of the purse, for example not purchasing goods from vendors that don't adopt a policy.
    - rsj_hn 5y ago
      An EO is not going to change precedent or case law about what is considered a restraint of trade by the supreme court. Executive orders are instructions by the President to the executive branch, not to the legislature or courts.
      - perl4ever 5y ago
        >An EO is not going to change precedent or case law about what is considered a restraint of trade by the supreme court Based on the quote from the FTC, it doesn't need to. The Supreme Court said that something must be "unreasonable" to be a restraint of trade. Declaring something to be unreasonable is not modifying the criterion set forth by the courts one iota. If the door is open, drive a truck through it.
vsskanth 5y ago
I'm actually impressed that the government has taken note of this issue. IMO non-compete agreements should not be allowed for anyone. It really drives down wages, especially in highly specialized fields. Double whammy if the worker is also on an H1B visa where they have to work in a field relevant to their experience or degree, and simply can't be without a job and maintain legal status. You now have a captive employee who knows they can't leave easily. NDAs exist to protect trade secrets and they do the job just fine.
NotSammyHagar 5y ago
Non-competes are terrible for workers and arguably bad for lots of other new companies trying to hire. Don't forget that lawyers decided to exclude themselves from them, when they made the laws in most states.

32 points by boulos 5y ago

This new Executive Order seems to be an omnibus tackling of many issues dear to HN readers/members as well as U.S. consumers. More here: https://news.ycombinator.com/item?id=27785964 https://news.ycombinator.com/item?id=27785964

rsj_hn 5y ago
Not really sure what can be accomplished with an EO in this arena. Perhaps tell the executive branch not to require any non-competes in their own hiring practices? Ask them to not do business with contractors that use non-competes? The latter is tougher as it is already subject to a number of laws. It would be nice if someone more knowledgeable on this site can let us know how an EO can nullify a non-compete that someone has agreed to, or prevent a company from requiring non-competes in the future.
- perl4ever 5y ago
  Not being a lawyer, I would think that an EO can be used in any case where there is a long standing policy to ignore existing law or interpret it in a particular way. So what laws might apply? The FTC says: "The Sherman Act outlaws "every contract, combination, or conspiracy in restraint of trade," and any "monopolization, attempted monopolization, or conspiracy or combination to monopolize." Long ago, the Supreme Court decided that the Sherman Act does not prohibit every restraint of trade, only those that are unreasonable." https://www.ftc.gov/tips-advice/competition-guidance/guide-antitrust-laws/antitrust-laws https://www.ftc.gov/tips-advice/competition-guidance/guide-a... So maybe enormous power could be found in the executive branch by simply declaring that non-competes are "unreasonable" and defending that in court.
  - yeuxardents 5y ago
    I think the larger issue of accomplishing this, and many other actions, via EO, is that the nexts administration can simply turn around and revoke or alter at-will. We saw that from Obama->Trump->Biden administrations pretty swiftly in first few months of each successive administration.
    - rsj_hn 5y ago
      Right, this is why EOs don't have the force or law or are able to change how courts interpret existing law. They are rules for the federal administration only, but they can have an effect by the power of the purse, for example not purchasing goods from vendors that don't adopt a policy.
  - rsj_hn 5y ago
    An EO is not going to change precedent or case law about what is considered a restraint of trade by the supreme court. Executive orders are instructions by the President to the executive branch, not to the legislature or courts.
    - perl4ever 5y ago
      >An EO is not going to change precedent or case law about what is considered a restraint of trade by the supreme court Based on the quote from the FTC, it doesn't need to. The Supreme Court said that something must be "unreasonable" to be a restraint of trade. Declaring something to be unreasonable is not modifying the criterion set forth by the courts one iota. If the door is open, drive a truck through it.

vsskanth 5y ago

I'm actually impressed that the government has taken note of this issue. IMO non-compete agreements should not be allowed for anyone. It really drives down wages, especially in highly specialized fields. Double whammy if the worker is also on an H1B visa where they have to work in a field relevant to their experience or degree, and simply can't be without a job and maintain legal status. You now have a captive employee who knows they can't leave easily. NDAs exist to protect trade secrets and they do the job just fine.

NotSammyHagar 5y ago

Non-competes are terrible for workers and arguably bad for lots of other new companies trying to hire. Don't forget that lawyers decided to exclude themselves from them, when they made the laws in most states.