17 ms·

There are two kinds of non-competes, and both have problems. First, there's the really nasty ones saying "If you ever work here, you can't work for any competi

by mabbo 5y ago

There are two kinds of non-competes, and both have problems. First, there's the really nasty ones saying "If you ever work here, you can't work for any competitor for X years", and they're clearly abusing of employees, labor, etc. I hope there is a straight up ban on that. The second kind is "You can't compete with us while you work here". And that is a much more complex beast. Obviously, if I work as a developer making a stock trading app, I shouldn't be making a competing stock trading app after hours. But my employer does everything. There is no field that my employer is not involved in, somehow. You can guess who they are, probably, or just read my profile. And they say "You cannot do anything that competes with anything we do". Which is everything. Want to make a Sudoku app? That's a game, we do games. Want to do some open source ML library work? We do ML, you can't do ML outside of work (I asked legal that one). And that's ignoring the who-knows-how-many secret un-released projects that might relate. They don't even tell us "no" anymore. They just say "read the non-compete agreement and do what it says". Basically "do what you like, but if we ever feel like it wasn't right, you're fired and maybe sued". And when I apply to other companies, they ask "do you have a github account?". No, I've been highly motivated not to. Edit: eesh, this was a bit of a rant, wasn't it? Apologies for that. But maybe folks have ideas on what to do about it, apart from the obvious.

tshaddox 5y ago
> Obviously, if I work as a developer making a stock trading app, I shouldn't be making a competing stock trading app after hours. Why is that obvious? If I work as a studio musician can I also be working on my own album after hours?
- an_opabinia 5y ago
  > If I work as a studio musician can I also be working on my own album after hours? Yes. > Why is that obvious? Just because there's a law somewhere that covers both a part of making music and part of making software, and just because some programmers make music and some musicians write software, and both are sometimes creative, doesn't mean they have much in common.
- lifeformed 5y ago
  If you're using melodies and samples from work hours, then maybe not. And it would be tough to argue that your at-home trading app code is completely uninfluenced by ideas you have at work.
  - tshaddox 5y ago
    True, but you can’t use the studio’s IP regardless of whether you work for the studio.
  - masklinn 5y ago
    > If you're using melodies and samples from work hours, then maybe not. That would not be a question of competition, but of IP theft. > And it would be tough to argue that your at-home trading app code is completely uninfluenced by ideas you have at work. How is that of any relevance? I can have ideas about a better way to wipe my ass at work, is my novel ass-wiping implement competing with the company? And even if it were, mere competition should not be enough for NCCs to trigger. NCCs should be about unfair advantage owing to the exploitation of sensitive or confidential information.
    - MajorBee 5y ago
      Well, if your company is in the ass-wiping business...
      - masklinn 5y ago
        Even then I don't think so. Not unless the novel implement is straight up IP theft in which case… there's no need for an NCC, IP theft is already a crime.
    - joshuamorton 5y ago
      This depends. You're drawing a very restricted form of noncompete, one which is that a noncompete is only valid if for example I walk away with, say information about customer priorities and take them to a competitor. But there is a broader though still imo legitimate view that a company, paying a knowledge worker to solve a particular class of problems, has a right to the result of that work. An extreme example would be a company giving you a lab and research assistants, you working there a year and then parenting the results yourself and licensing them to a different company. It might not have required any insider info, and all the IP is ostensibly yours, but that feels abusive. Granted we're overlapping into IP assignment and moonlighting clauses, but they're all closely related.
- k__ 5y ago
  Many employers see their markets as zero sum game.
  - s1artibartfast 5y ago
    Many markets are zero sum
- rich_sasha 5y ago
  You have a good idea for improving the product at 10 am. You think about it between 10 am and 4 pm. At 4 pm you discard the idea, not gonna work or sth. At 6 pm you type it into your app at home. Of course most people wouldn’t, but this is one narrow area where I think it is reasonable to limit employees.
- CPLX 5y ago
  For the most part artists signed to songwriting or publishing deals as well as run if the mill record deals sign over the rights to everything they produce during the covered period.
- mabbo 5y ago
  You know, you're right? I've been so indoctrinated in how non-competes work that I didn't even see that this wasn't obvious. Gah.
- orangecat 5y ago
  Why is that obvious? Because it creates a clear conflict of interest; stock trading apps compete with each other much more directly than do music albums.
  - masklinn 5y ago
    > Because it creates a clear conflict of interest If you're not doing your job anymore, or are sabotaging your dayjob, then it's an employment issue. NCCs have no reason whatsoever to enter the equation before or after.
- walshemj 5y ago
  Yes that's a totally different employment relationship - you could be sued for plagiarism though.
- jedimastert 5y ago
  The implication isn't that you can't work in the same field, but that you could use inside knowledge trusted to you as an employee to get a leg up, which would be more analogues to taking licks and ideas from a hit album and using them in your own.
  - II2II 5y ago
    What if that recording studio considered inside knowledge of the publishing industry gained from your employment with them as getting a leg up? That is more-or-less analogous to what a family member was told when asked to sign a non-compete for a job as a grocery store clerk. (To be specific, the company viewed knowing who their supplies were as reason for a non-compete.)
deleted 5y ago
[deleted]
an_opabinia 5y ago
> And that's ignoring the who-knows-how-many secret un-released projects that might relate. Most software businesses exist on a tenuous information asymmetry turbocharged by capital (dumping, to reduce prices). The noncompete is about protecting well-capitalized customers from doing the stuff they're buying from Amazon themselves - not because they poach an employee who knows how, but because they find out that a piece of free, open source software is the secret to it all.
masklinn 5y ago
> There are two kinds of non-competes, and both have problems. There are more kinds of non-competes. Neither of the kinds you're listing is blanket-legal anywhere in Europe, as far as I can tell, but there are still NCC/NCAs. Generally speaking, in Europe, NCC/NCAs must: * show a reasonable business interest, mere competition does not ever qualify * be geographically limited * be temporally limited (rarely more than two years) * be financially compensated (significantly, usually on the order of 50% gross salary for the entire period) > Obviously, if I work as a developer making a stock trading app, I shouldn't be making a competing stock trading app after hours. No it's not obvious at all. In fact I'd say that on its face it's obviously not true. Unless the employer can justify of a super secret sauce which would be endangered by this there's no reason why you could not. You could work as a dev of a stock trading app, be passionate about stock trading applications, disagree with the company's ideas on the subject, and want to realise your own ideas.
- rich_sasha 5y ago
  As another comment said, and I can confirm from personal experience, just the fact that you need these to enforce a non-compete is no panacea. There is usually enough probable cause, or whatever legalese name it has, to take an employee to court and cause them enormous havoc and expense (UK anyway, but the rest of your post reads consistent with UK laws). Additionally, if you think you are small fry for a firm to sue you, not necessarily. Enforcement of non-competes is just as much aimed at deterring others from trying as it is at affecting you personally, if you spread the cost for the company over the 10-20 employees who are deterred, it suddenly looks cheap. Even if against the odds of going against a large corporation with deep pockets you eke out a win in court, you are almost certainly not getting all your money back, and none of your time and stress either.
- Symmetry 5y ago
  Honestly I think that just requiring that NCAs be financially compensated like that would be enough to prevent them from being a problem.
- laGrenouille 5y ago
  > be financially compensated (significantly, usually on the order of 50% gross salary for the entire period) I think this is the most important protection that's needed in the US. NCCs for high-level executives with golden parachute clauses actually makes a lot of sense. If their former company is essentially paying them (usually a lot!) after they leave during the NCC period, that is unlikely to get abused and overused. For anyone who's knowledge and connections is not important enough to those kinds of payouts offered to C-suite execs, NCCs are just a way to bully employees into not leaving.
elliekelly 5y ago
> We do ML, you can't do ML outside of work (I asked legal that one). Keep in mind the legal department represents your company, not you. They will tell you the interpretation of the non-compete most favorable to their client. It doesn’t mean it is correct or even enforceable.
- masklinn 5y ago
  Problematically though, in most of the US ridiculously broad NCCs are enforceable. The only place where you're safe is California, where the only way for an NCC to stick is related to business (co)-ownership (selling the business, dissolving a partnership, or dissolving an LLC). Out-of-state NCCs are also un-enforceable in California.
  - grepfru_it 5y ago
    You made a very general statement! They are enforceable because usually the violator is doing something ridiculously broad. Like going to work for McDonalds R&D after leaving Burger King as the VP of product design. My anecdotal experience: I once worked for a major bank and someone who left another major bank held a meeting with developers of a next-gen platform where he basically explained, in explicit detail, his old employer's entire platform. I would argue a non-compete would be 100% enforceable here. Another time, I was threatened to not use any IP from a startup I helped start. I specifically asked early on for an agreement to share the rights to my code. On my last day this agreement was terminated and the non-compete took precedence. Consulting with several lawyers (not in california) told me that it would be an uphill battle for the business to win against me as the optics of a large corp suing an individual doesn't bode well for the plantiff. Unless you started a multi-million dollar revenue generating project, which in that case I was advised to settle as a peace offering.
    - masklinn 5y ago
      > Like going to work for McDonalds R&D after leaving Burger King as the VP of product design. Don't rightly see why there would be any issue with that. If you bring McD IP to BK, then that's an IP theft issue. > I once worked for a major bank and someone who left another major bank held a meeting with developers of a next-gen platform where he basically explained, in explicit detail, his old employer's entire platform. I would argue a non-compete would be 100% enforceable here. And I would argue a non-compete should be 100% non-enforceable here. "I learned shit on my previous job" doesn't mean you should not be able to work in the field anymore.
yebyen 5y ago
> "do you have a github account?". No, I've been highly motivated not to. That is a shame, and given the extent to which most businesses and groups are built on Open Source, the fact that your situation is not in any way unique (to your employer or at large) is what makes it IMHO much worse. I ran into technical limitations with my testing framework at one point where I realized that it was going to make my work 10x more complicated if I couldn't simply take some of the common libraries that I had factored out of my apps, and make them public. You know what I'm saying, the CI machine can't run without a machine account if "bundle install" requires a valid SSH account. Getting the SSH account inside of a Docker container was an exercise of Rube Goldberg proportions, I eventually did it, but doubt strongly I would have ever been able to get anyone else to understand how or why that solution worked. So I did the rational thing and published a few libraries to simplify the stack. 6 months later, we received a message from the head of InfoSec who was "very disappointed" after looking at our GitHub account. Nobody competes with us. There was no risk of helping the competition. We're not in the business of software development (though we had an entire department of folks whose job title was Application Developer, so figure that one out...) Their concern wasn't that it was against an NDA or that we hadn't gotten it approved, it was that threat-actors will take any signal they can about our internal stuff and turn it into an attack vector. Given what specifically it was that we had published, this was beyond irrational. I told them "it's 2020 and this is a backwards position to be holding in 2020." Shine a light, get more eyes on it. There is no danger and I'm glad that someone looked at my code, I said, even if only for a few minutes – which I know would not have happened at all if we kept the repo internal. Yeah, I don't work there anymore (not specifically because of this incident, but it was a contributing factor to me leaving voluntarily, without a doubt.)
trentnix 5y ago
But my employer does everything. There is no field that my employer is not involved in, somehow. You can guess who they are, probably, or just read my profile. And they say "You cannot do anything that competes with anything we do". Which is everything. Want to make a Sudoku app? That's a game, we do games. Want to do some open source ML library work? We do ML, you can't do ML outside of work (I asked legal that one). And that's ignoring the who-knows-how-many secret un-released projects that might relate. I'm in a US state that allows non-competes. I recently turned down a job because I wasn't comfortable with the non-compete I was compelled to sign expressly because the company's opinion of its own market was so broad. They implored me to trust that they had "never sued anyone" and "have no intentions to", and I think they honestly believe that. But then why have the non-compete at all? And even if they are true to their word, what happens when they sell the company to someone else that exploits the leverage the non-compete provides? A friend of mine was sued by their ex-employer over the violation of a non-compete. He lawyered up and fought it. And he won! But it was a Pyrrhic victory that resulted in a significant expensive of time (the judge granted an injunction that forced him out of business until the case was resolved - which was around 18 months) and money (he was granted no financial judgement). I am convinced the plaintiff's lawyer knew they'd lose, but to the suing party the process was punishment and that became their goal. His should be a cautionary tale - even if you're advised that the non-compete isn't enforceable, it can still hurt you.
- wolverine876 5y ago
  > They implored me to trust that they had "never sued anyone" and "have no intentions to", and I think they honestly believe that. But then why have the non-compete at all? Exactly. 'That's great; we can resolve that issue easily. Let's just skip the non-compete - you're not using it anyway and I'm not comfortable with it.' EDIT: A non-lawyer's suggestion (talk to a lawyer before you do this): Skip signing or edit documents (cross out and initial sections you don't like, add words - and initial each change) and then sign and send it back. Don't say a thing; leave it to them to bring it up - most people won't bother disputing it with you.
  - ozim 5y ago
k__ 5y ago
There are more. I have some that state, I can't work directly with clients of my clients.
mathattack 5y ago
It’s a good reason to keep quiet. :-) What’s interesting about the first case you cite is those types of NDAs help individual companies but hurt the ecosystem. Wherever there’s a large grouping of world class firms, they benefit in aggregate from cross-pollination. Think NYC for banking and advertising, CA and Seattle for tech, Houston for energy, Etc. One reason people can chase the best ideas in CA is non-competes aren’t enforceable. But in any individual case someone leaving hurts the firm they were previous employed at. So firms still push for non-competes.
Hitgub 5y ago
> they ask "do you have a github account?". No, I've been highly motivated not to. I release all my projects under a fake name and fake Github for this reason. Ethically dubious, but I still get to contribute code and I have something to send a prospective employer. When they ask why it's pseudonymous, I say "non-competes" and they nod in understanding.
gumby 5y ago
I share your concern but modulate the concern with two factors (you may not agree): 1 - if you work at a company like that (faang, basically) you probably have a choice of working elsewhere and they are paying you handsomely to give up the ability to have almost any software or electronics side projects (my gf wants me to go work at one of them and I have decided it’s not worth the money, though I can understand why others can reasonably think otherwise). The first section of the article talks about this: US labor law is pretty firmly rooted in freedom of contract doctrine even though for most people there’s such extreme asymmetry of power that any “freedom” in this area is illusory. But if you’re a FAANG developer you aren’t one of those people — you have a choice. 2 - every such agreement I have signed has had a “carve out” clause: you can list things you’ve been working on (which is vague, I have listed areas I’m interested in and have looked into and counted that as ”work”) and exclude the stuff listed there from the agreement. Of course the new employer can disagree with the choices (“ARM CPU designs? That’s what we’re hiring you to do!”) but again, if that were you, you pretty much would have freedom to negotiate. I think such an objection would be pretty fair for an employer to have in that situation. Also if you decide later you want to write a stock app but hadn’t listed it, well, c’est la vie.
- throwawaygh 5y ago
  > if you work at a company like that (faang, basically) you probably have a choice of working elsewhere Heh. I advise early career students from my alma mater. One of them took a job with a mom-and-pop web dev + IT firm. Super mom and pop. Like, maintaining word press and similar installs for maybe a few hundred clients and then bundling that with generic IT services (computer repair, maintenance, blah blah blah). Basically, as boring as you could possibly get. That employer told my advisee that because the company develops software, their non-compete covers all software. Are they correctly interpreting state law? Absolutely not. Does that matter to a 2x-year-old making 80K worried about losing their job, being sued, being blackballed in their small regional labor market (which they don't want to leave for family reasons)? Also no. > 2 - every such agreement I have signed has had a “carve out” clause: you can list things you’ve been working on (which is vague, I have listed areas I’m interested in and have looked into and counted that as ”work”) and exclude the stuff listed there from the agreement. Wait, are you sure that list works how you think it does? The vast majority of employers won't even talk to you about the scope of their non-compete. At the outset, you are supposed to white-list things when you start employment. But then anything non on that white-list (which includes every idea you have after the moment you fill it out!!!) has to be assumed to be covered under the NDA, unless you're willing to risk a court battle and an enemy.
blippage 5y ago
In the UK, there's Unfair Contracts.The US is the same, I would imagine. Here's what https://www.lawdepot.co.uk/contracts/non-compete-agreement/ https://www.lawdepot.co.uk/contracts/non-compete-agreement/ says: "Employers can create a Non-Compete Agreement for as long as they wish. Having said that, if a Non-Compete Agreement limits a former employee for too long, it’s unlikely that a court will enforce the document. Judges will likely consider a period of six months to a year to be a reasonable amount of time. The time period you choose should reasonably protect your company and make sense in your industry. As a result, there isn’t a standard time period for a Non-Compete Agreement." So, tricky, but anything longer than a year is likely to be deemed unreasonable. There may be exceptions, such as when a business owner sells a business, and the sale contains a non-compete. In that case, a non-compete is likely to hold up. The article goes on: "Courts may not enforce a non-compete clause in the UK if: * The effect could be harmful to the public (if it restricts commerce and depresses the local economy) * The scope is broader than necessary to protect the employer * The restriction would cause undue hardship on the employee (too difficult for the employee to find a new job) * The agreement has unreasonable time or geographic restrictions" In late 2020, the UK gov't sought feedback on "Measures to reform post-termination non-compete clauses in contracts of employment " here: https://www.gov.uk/government/consultations/measures-to-reform-post-termination-non-compete-clauses-in-contracts-of-employment https://www.gov.uk/government/consultations/measures-to-refo... The outcome has not yet been published. "The purpose of the consultation is to seek views on: * proposals to make non-compete clauses enforceable only when the employer provides compensation during the term of the clause, and whether this could be complemented by additional transparency measures and statutory limits on the length of non-compete clauses * an alternative proposal to make post-termination, non-compete clauses in contracts of employment unenforceable" This seems to be heading in the right direction. I am against non-competes in general.
achenatx 5y ago
There is a third kind which bars people working for professional services companies from taking clients directly or going to another company and taking clients.
skohan 5y ago
I just assumed that was a big part of what big tech is paying for when they over-pay developers. They are buying you off so you don't work for competitors, or someday become a competitor. It's a bit of a gilded cage.
tobmlt 5y ago
Wow, yeah thanks for this. I never have time to study for code challenges... (I am a math/physics/optimization programmer - no code challenge prep background) looks like an order of magnitude more reason not to bother.
lacker 5y ago
The second kind is "You can't compete with us while you work here". It's just semantics, but these restrictions are usually not covered by "non-compete agreements". They are more often called something like an "IP assignment agreement", where you agree that anything you produce in your employer's area of work while you are employed there, the IP belongs to your employer. In practice, many employees simply ignore these agreements, and it usually works out fine. The FAANG companies aren't in the business of suing small companies started by ex-employees. Asking legal is pointless, they will just tell you that everything is forbidden. So just ignore your legal department and work on your side project.
- lamontcg 5y ago
  Yeah that would be solved by NDAs and trade secrets. Then if you write a stock trading app... Did you have any contact with the team that was writing the companies stock trading app, did you sign any NDAs about that, did you receive any information about that, did you have any trade secrets? No? Then they shouldn't have any claim. IP assignment and non-competes should be eliminated for non-managerial employees. Or for IP assignment it needs to be whittled down to narrowly apply only to what the employee actually worked on, not anything the business does.
  - s1artibartfast 5y ago
    NDAs and trade secrets are difficult to enforce in practice for many types of ip that can't go in a patent, like market and product strategy.
    - lamontcg 5y ago
      That is not a good reason for every software engineer at the company to be under overly-broad non-competes.
- ncallaway 5y ago
  > So just ignore your legal department and work on your side project. Nah, I just quit, and in my exit interview I told them why.
caconym_ 5y ago
> Obviously, if I work as a developer making a stock trading app, I shouldn't be making a competing stock trading app after hours. For rank-and-file employees, I don't think this is so obvious. It presents a potential conflict of interest, sure, but if I'm fulfilling my job responsibilities and not holding anything back or stealing nonpublic info/trade secrets/whatever then what's the problem? It shouldn't be the mere possibility of competition--we like competition, remember? In America we default to the corporation's rights taking precedence over the individual's rights. We say the mere risk that an employee's side projects might step on their employer's (poorly defined) rights in some way is enough to preemptively assign ownership of all the employee's work to their employer, just in case. From the viewpoint of the corporate masters and the lifelong-conditioned wage-slave masses, that seems good and right; in a vacuum, IMO, it seems completely backwards. We should be trying to nucleate innovation, not stifle it. Why should an employee with a good idea, who is not paid to have ideas in that scope, jump through whatever hoops it takes to get their employer to notice it--probably at the cost of their own time, uncompensated--and let said employer reap the lion's share of the rewards? Even for employees who are literally paid to generate ideas, for product design or strategy or whatever else, the onus should be on the employer to provide a good value proposition for employees to share their ideas (the original contents of their own minds) rather than hold onto them. In reality I see plenty of cases where this does happen, so while the "shower idea" argument is compelling enough, I don't think it's an effect that stands to substantially threaten corporate success regardless of whatever rote legalese appears in employment agreements. At the very least, even if (the general) you don't agree with me, you should take a step back and consider whether your personal ethic of capitalism is giving employers more moral weight than they are really due.
- orangecat 5y ago
  It presents a potential conflict of interest, sure, but if I'm fulfilling my job responsibilities and not holding anything back or stealing nonpublic info/trade secrets/whatever then what's the problem? This is a bit like "sure I'm dating one of my direct reports, but as long as I don't show them any special treatment what's the problem?". In both cases even if you genuinely believe what you're saying, it causes your incentives to be very much misaligned with your employer's.
cgb223 5y ago
I know the former are illegal in California, but are the latter illegal as well?
intricatedetail 5y ago
Shouldn't be a problem if they paid adequately. Employee that has 10x salary unlikely is going to look for his or hers own way. When I was on a low pay I always had side projects.
deleted 5y ago
[deleted]
dpweb 5y ago
Had a non-compete (consulting). Employer was cool at my old workplace. We didn't have any super-proprietary knowledge or book of business to walk off with - so generally they weren't enforced. But they needed it to protect the business and I can understand that. In my state, by law the contract can't cause 'undue difficulties'. You could prob make the case that were I to leave, it prevents me from working in my industry - I'd call that a good enough argument to go before a judge with, esp in a blue state.
jtsiskin 5y ago
Go ahead and make a Sudoku app. No one at Amazon will care. Contribute to the ML library. The worst that will happen in practice is they ask you to stop, but even that seems unlikely.
gpderetta 5y ago
It was a good rant
dv_dt 5y ago
I think not competing with any area in which the company works is a convenient test. But I suspect the ultimate legal test is actually more constrained. One more like: do not compete with an area for which you directly work in or are exposed to information about for the company.
adrr 5y ago
The second one is worse than that. You’re a line cook and due to businesses not wanting to pay benefits. You can only find part time gigs. Forced to sign a non compete now limits your options for a second job. Line cook is an extreme example but it happens to other professions like personal trainers. There has been cases where non competes were forced on restaurant workers.
- mabbo 5y ago
  > but it happens to other professions like personal trainers Funny enough, this exact issue caused me to lose a personal trainer. See, he opened a gym that competed with the gym he trained me at. Like, he was the owner and manager of that other gym. While also being an employed personal trainer at my gym. And did not hide this fact from anyone. When the gym told him he had to quit or be fired, even he was of the "I'm surprised it took this long" perspective and understood their reasoning.
ownagefool 5y ago
Actually. Why shouldn't you be able to make a stock trading app after hours?
lordnacho 5y ago
The problem is that if there's any chance an employer will win, there's a cost that the employee needs to consider. If it's not clear that non competes are going to fail immediately, people are going to get bullied by letigious employers, and less letigious employers will actually benefit from the will-he-won't-he of it too. Also note that there's a fair bit of legal myths floating around society, so if it's not made clear some people will end up backing out when they would have won.
macksd 5y ago
The first one is absolutely problematic, and I've been personally negatively affected by other people's non-competes a couple of times, but there's some nuance there, I think. I would like to live in a world where companies invest heavily in educating and training their employees and where there's a lot of transparency within companies. One of the reasons you don't get that is because of the fear of an employee getting seduced by a tiny pay increase and losing a bunch of competitive edge / trade secrets / investment. There are other ways to address that than non-competes, granted, but we're not doing those things either. In place of more nuanced non-competes you just get more companies expecting you to take on the risk of buying your own education to be trained in a job, bureaucracy and lack of trust in employees, etc.
akomtu 5y ago
If your side project is at least a two man operation, say that all the work is done by your buddy, while you only have ownership rights. Or say your buddy hired a cheap noname outsourcing firm or even a freelancer who did the work and vanished. At the end of the day, software is too complex and it's unprovable that you did any of it.
smichel17 5y ago
Agreed on the first kind. It kind of sort of makes sense in the original context: say I run a bakery. I put it up for sale. You think it's a pretty good deal, so we agree and I sell the bakery to you. Then I take the money you paid me to renovate the building across the street, hire your employees out from under you. Customers quickly learn that the "original" moved across the street, and I'm laughing all the way to the bank. A noncompete that says, "I promise not to open a bakery within 40 miles in in the next 3 years" is pretty reasonable. However, the concept deteriorates with the internet, where there's no reasonable equivalent of a 40 mile radius, so the terms become "just don't use your expertise for X years". Noncompetes for employees are much more dubious. If my head chef wants to try and pull the same trick on me, it's his investment at risk... If he's really that motivated to undercut me, maybe I should think long and hard about why. The only variant I could see being okay with is if the term starts at the start of the employment. That is, if you leave after 2 months, you can't compete for 22 months, but if you stay the full 2 years, nothing stops you. (I still don't like that, but it's tolerable). I'm not sure about the second type of noncompete. Is it the problem, or is the problem that your employer does everything? I suspect both, and a fairer version would restrict the noncompete to "stuff that you work on directly". Or maybe the noncompete should have to specify the bounds and wouldn't be enforceable if they're too broad, similar to patents... on second thought, never mind. In any case, I'd first like to see whether it's still overly restrictive if companies were capped to some reasonable size.
- tartoran 5y ago
  But the NCC would be for the baker to not work for another bakery within a 40 miles radius and that is terrible, they would not be able to exercise their profession.
lucideer 5y ago
> Obviously, if I work as a developer making a stock trading app, I shouldn't be making a competing stock trading app after hours. A lot of siblings have pointed out that this isn't the case (I'd agree), so it's maybe worth digging into why you (and likely many people) think this should be the case. My guess is it's to do with IP and trade-secrets, but that's clearly already covered by IP law and absolutely doesn't need extra provisions in employment contracts to protect company interests there. If I create a competing stock app, I need to be able to demonstrate novelty. If I can do that, I don't see an issue. My employer still has a lot of advantages in the market (first-to-market network effect, funding, etc.) so if I'm able to compete with them without stealing IP, I must have (tangible/intangible) assets unique to me as an individual to do so: my employment contract should not sign over those assets outside of my working hours. If I'm actively weakening my employer's product during my working hours to benefit my own that's easily a firing offence without the need for non-competes. What other reasons are there?
- 946789987649 5y ago
  I suppose enforcability? It's easier to tell when someone has created a completing application vs whether they were purposely doing bad work (or are just incompetent)
heavyset_go 5y ago
> Obviously, if I work as a developer making a stock trading app, I shouldn't be making a competing stock trading app after hours. As long as you're not using resources from your employer, including things like IP or trade secrets, then it's not so obvious to me. What you do on your own time with your own resources is your own business. If that's seen as competition, then that's just too bad. This is how free markets work.
nobody_at_all 5y ago
> Obviously, if I work as a developer making a stock trading app, I shouldn't be making a competing stock trading app after hours. How is that obvious? If a single person, regardless of where they work, can produce a stock trading app that would actually compete against what a company is producing, why shouldn't they do it? People are starting to learn how much power they really have (see the current low wage revolt), perhaps programmers will realize it someday and stop allowing companies to steamroll them.
lostlogin 5y ago
> Edit: eesh, this was a bit of a rant, wasn't it? Not at all. I'm slightly surprised at the quality of the comments here as a whole, as many show a sentiment that employers would like.
cannabis_sam 5y ago
> The second kind is "You can't compete with us while you work here". And that is a much more complex beast. Obviously, if I work as a developer making a stock trading app, I shouldn't be making a competing stock trading app after hours. Why not? If a single developer can compete with the company that employs them, by only using their spare time, it sounds like that company could really use some competition..

by mabbo 5y ago

tshaddox 5y ago

> Obviously, if I work as a developer making a stock trading app, I shouldn't be making a competing stock trading app after hours. Why is that obvious? If I work as a studio musician can I also be working on my own album after hours?

an_opabinia 5y ago
> If I work as a studio musician can I also be working on my own album after hours? Yes. > Why is that obvious? Just because there's a law somewhere that covers both a part of making music and part of making software, and just because some programmers make music and some musicians write software, and both are sometimes creative, doesn't mean they have much in common.
lifeformed 5y ago
If you're using melodies and samples from work hours, then maybe not. And it would be tough to argue that your at-home trading app code is completely uninfluenced by ideas you have at work.
- tshaddox 5y ago
  True, but you can’t use the studio’s IP regardless of whether you work for the studio.
- masklinn 5y ago
  > If you're using melodies and samples from work hours, then maybe not. That would not be a question of competition, but of IP theft. > And it would be tough to argue that your at-home trading app code is completely uninfluenced by ideas you have at work. How is that of any relevance? I can have ideas about a better way to wipe my ass at work, is my novel ass-wiping implement competing with the company? And even if it were, mere competition should not be enough for NCCs to trigger. NCCs should be about unfair advantage owing to the exploitation of sensitive or confidential information.
  - MajorBee 5y ago
    Well, if your company is in the ass-wiping business...
    - masklinn 5y ago
      Even then I don't think so. Not unless the novel implement is straight up IP theft in which case… there's no need for an NCC, IP theft is already a crime.
  - joshuamorton 5y ago
    This depends. You're drawing a very restricted form of noncompete, one which is that a noncompete is only valid if for example I walk away with, say information about customer priorities and take them to a competitor. But there is a broader though still imo legitimate view that a company, paying a knowledge worker to solve a particular class of problems, has a right to the result of that work. An extreme example would be a company giving you a lab and research assistants, you working there a year and then parenting the results yourself and licensing them to a different company. It might not have required any insider info, and all the IP is ostensibly yours, but that feels abusive. Granted we're overlapping into IP assignment and moonlighting clauses, but they're all closely related.
k__ 5y ago
Many employers see their markets as zero sum game.
- s1artibartfast 5y ago
  Many markets are zero sum
rich_sasha 5y ago
You have a good idea for improving the product at 10 am. You think about it between 10 am and 4 pm. At 4 pm you discard the idea, not gonna work or sth. At 6 pm you type it into your app at home. Of course most people wouldn’t, but this is one narrow area where I think it is reasonable to limit employees.
CPLX 5y ago
For the most part artists signed to songwriting or publishing deals as well as run if the mill record deals sign over the rights to everything they produce during the covered period.
mabbo 5y ago
You know, you're right? I've been so indoctrinated in how non-competes work that I didn't even see that this wasn't obvious. Gah.
orangecat 5y ago
Why is that obvious? Because it creates a clear conflict of interest; stock trading apps compete with each other much more directly than do music albums.
- masklinn 5y ago
  > Because it creates a clear conflict of interest If you're not doing your job anymore, or are sabotaging your dayjob, then it's an employment issue. NCCs have no reason whatsoever to enter the equation before or after.
walshemj 5y ago
Yes that's a totally different employment relationship - you could be sued for plagiarism though.
jedimastert 5y ago
The implication isn't that you can't work in the same field, but that you could use inside knowledge trusted to you as an employee to get a leg up, which would be more analogues to taking licks and ideas from a hit album and using them in your own.
- II2II 5y ago
  What if that recording studio considered inside knowledge of the publishing industry gained from your employment with them as getting a leg up? That is more-or-less analogous to what a family member was told when asked to sign a non-compete for a job as a grocery store clerk. (To be specific, the company viewed knowing who their supplies were as reason for a non-compete.)

deleted 5y ago

[deleted]

an_opabinia 5y ago

> And that's ignoring the who-knows-how-many secret un-released projects that might relate. Most software businesses exist on a tenuous information asymmetry turbocharged by capital (dumping, to reduce prices). The noncompete is about protecting well-capitalized customers from doing the stuff they're buying from Amazon themselves - not because they poach an employee who knows how, but because they find out that a piece of free, open source software is the secret to it all.

masklinn 5y ago

> There are two kinds of non-competes, and both have problems. There are more kinds of non-competes. Neither of the kinds you're listing is blanket-legal anywhere in Europe, as far as I can tell, but there are still NCC/NCAs. Generally speaking, in Europe, NCC/NCAs must: * show a reasonable business interest, mere competition does not ever qualify * be geographically limited * be temporally limited (rarely more than two years) * be financially compensated (significantly, usually on the order of 50% gross salary for the entire period) > Obviously, if I work as a developer making a stock trading app, I shouldn't be making a competing stock trading app after hours. No it's not obvious at all. In fact I'd say that on its face it's obviously not true. Unless the employer can justify of a super secret sauce which would be endangered by this there's no reason why you could not. You could work as a dev of a stock trading app, be passionate about stock trading applications, disagree with the company's ideas on the subject, and want to realise your own ideas.

rich_sasha 5y ago
As another comment said, and I can confirm from personal experience, just the fact that you need these to enforce a non-compete is no panacea. There is usually enough probable cause, or whatever legalese name it has, to take an employee to court and cause them enormous havoc and expense (UK anyway, but the rest of your post reads consistent with UK laws). Additionally, if you think you are small fry for a firm to sue you, not necessarily. Enforcement of non-competes is just as much aimed at deterring others from trying as it is at affecting you personally, if you spread the cost for the company over the 10-20 employees who are deterred, it suddenly looks cheap. Even if against the odds of going against a large corporation with deep pockets you eke out a win in court, you are almost certainly not getting all your money back, and none of your time and stress either.
Symmetry 5y ago
Honestly I think that just requiring that NCAs be financially compensated like that would be enough to prevent them from being a problem.
laGrenouille 5y ago
> be financially compensated (significantly, usually on the order of 50% gross salary for the entire period) I think this is the most important protection that's needed in the US. NCCs for high-level executives with golden parachute clauses actually makes a lot of sense. If their former company is essentially paying them (usually a lot!) after they leave during the NCC period, that is unlikely to get abused and overused. For anyone who's knowledge and connections is not important enough to those kinds of payouts offered to C-suite execs, NCCs are just a way to bully employees into not leaving.

elliekelly 5y ago

> We do ML, you can't do ML outside of work (I asked legal that one). Keep in mind the legal department represents your company, not you. They will tell you the interpretation of the non-compete most favorable to their client. It doesn’t mean it is correct or even enforceable.

masklinn 5y ago
Problematically though, in most of the US ridiculously broad NCCs are enforceable. The only place where you're safe is California, where the only way for an NCC to stick is related to business (co)-ownership (selling the business, dissolving a partnership, or dissolving an LLC). Out-of-state NCCs are also un-enforceable in California.
- grepfru_it 5y ago
  You made a very general statement! They are enforceable because usually the violator is doing something ridiculously broad. Like going to work for McDonalds R&D after leaving Burger King as the VP of product design. My anecdotal experience: I once worked for a major bank and someone who left another major bank held a meeting with developers of a next-gen platform where he basically explained, in explicit detail, his old employer's entire platform. I would argue a non-compete would be 100% enforceable here. Another time, I was threatened to not use any IP from a startup I helped start. I specifically asked early on for an agreement to share the rights to my code. On my last day this agreement was terminated and the non-compete took precedence. Consulting with several lawyers (not in california) told me that it would be an uphill battle for the business to win against me as the optics of a large corp suing an individual doesn't bode well for the plantiff. Unless you started a multi-million dollar revenue generating project, which in that case I was advised to settle as a peace offering.
  - masklinn 5y ago
    > Like going to work for McDonalds R&D after leaving Burger King as the VP of product design. Don't rightly see why there would be any issue with that. If you bring McD IP to BK, then that's an IP theft issue. > I once worked for a major bank and someone who left another major bank held a meeting with developers of a next-gen platform where he basically explained, in explicit detail, his old employer's entire platform. I would argue a non-compete would be 100% enforceable here. And I would argue a non-compete should be 100% non-enforceable here. "I learned shit on my previous job" doesn't mean you should not be able to work in the field anymore.

yebyen 5y ago

> "do you have a github account?". No, I've been highly motivated not to. That is a shame, and given the extent to which most businesses and groups are built on Open Source, the fact that your situation is not in any way unique (to your employer or at large) is what makes it IMHO much worse. I ran into technical limitations with my testing framework at one point where I realized that it was going to make my work 10x more complicated if I couldn't simply take some of the common libraries that I had factored out of my apps, and make them public. You know what I'm saying, the CI machine can't run without a machine account if "bundle install" requires a valid SSH account. Getting the SSH account inside of a Docker container was an exercise of Rube Goldberg proportions, I eventually did it, but doubt strongly I would have ever been able to get anyone else to understand how or why that solution worked. So I did the rational thing and published a few libraries to simplify the stack. 6 months later, we received a message from the head of InfoSec who was "very disappointed" after looking at our GitHub account. Nobody competes with us. There was no risk of helping the competition. We're not in the business of software development (though we had an entire department of folks whose job title was Application Developer, so figure that one out...) Their concern wasn't that it was against an NDA or that we hadn't gotten it approved, it was that threat-actors will take any signal they can about our internal stuff and turn it into an attack vector. Given what specifically it was that we had published, this was beyond irrational. I told them "it's 2020 and this is a backwards position to be holding in 2020." Shine a light, get more eyes on it. There is no danger and I'm glad that someone looked at my code, I said, even if only for a few minutes – which I know would not have happened at all if we kept the repo internal. Yeah, I don't work there anymore (not specifically because of this incident, but it was a contributing factor to me leaving voluntarily, without a doubt.)

trentnix 5y ago

But my employer does everything. There is no field that my employer is not involved in, somehow. You can guess who they are, probably, or just read my profile. And they say "You cannot do anything that competes with anything we do". Which is everything. Want to make a Sudoku app? That's a game, we do games. Want to do some open source ML library work? We do ML, you can't do ML outside of work (I asked legal that one). And that's ignoring the who-knows-how-many secret un-released projects that might relate. I'm in a US state that allows non-competes. I recently turned down a job because I wasn't comfortable with the non-compete I was compelled to sign expressly because the company's opinion of its own market was so broad. They implored me to trust that they had "never sued anyone" and "have no intentions to", and I think they honestly believe that. But then why have the non-compete at all? And even if they are true to their word, what happens when they sell the company to someone else that exploits the leverage the non-compete provides? A friend of mine was sued by their ex-employer over the violation of a non-compete. He lawyered up and fought it. And he won! But it was a Pyrrhic victory that resulted in a significant expensive of time (the judge granted an injunction that forced him out of business until the case was resolved - which was around 18 months) and money (he was granted no financial judgement). I am convinced the plaintiff's lawyer knew they'd lose, but to the suing party the process was punishment and that became their goal. His should be a cautionary tale - even if you're advised that the non-compete isn't enforceable, it can still hurt you.

wolverine876 5y ago
> They implored me to trust that they had "never sued anyone" and "have no intentions to", and I think they honestly believe that. But then why have the non-compete at all? Exactly. 'That's great; we can resolve that issue easily. Let's just skip the non-compete - you're not using it anyway and I'm not comfortable with it.' EDIT: A non-lawyer's suggestion (talk to a lawyer before you do this): Skip signing or edit documents (cross out and initial sections you don't like, add words - and initial each change) and then sign and send it back. Don't say a thing; leave it to them to bring it up - most people won't bother disputing it with you.
- ozim 5y ago

k__ 5y ago

There are more. I have some that state, I can't work directly with clients of my clients.

mathattack 5y ago

It’s a good reason to keep quiet. :-) What’s interesting about the first case you cite is those types of NDAs help individual companies but hurt the ecosystem. Wherever there’s a large grouping of world class firms, they benefit in aggregate from cross-pollination. Think NYC for banking and advertising, CA and Seattle for tech, Houston for energy, Etc. One reason people can chase the best ideas in CA is non-competes aren’t enforceable. But in any individual case someone leaving hurts the firm they were previous employed at. So firms still push for non-competes.

Hitgub 5y ago

> they ask "do you have a github account?". No, I've been highly motivated not to. I release all my projects under a fake name and fake Github for this reason. Ethically dubious, but I still get to contribute code and I have something to send a prospective employer. When they ask why it's pseudonymous, I say "non-competes" and they nod in understanding.

gumby 5y ago

I share your concern but modulate the concern with two factors (you may not agree): 1 - if you work at a company like that (faang, basically) you probably have a choice of working elsewhere and they are paying you handsomely to give up the ability to have almost any software or electronics side projects (my gf wants me to go work at one of them and I have decided it’s not worth the money, though I can understand why others can reasonably think otherwise). The first section of the article talks about this: US labor law is pretty firmly rooted in freedom of contract doctrine even though for most people there’s such extreme asymmetry of power that any “freedom” in this area is illusory. But if you’re a FAANG developer you aren’t one of those people — you have a choice. 2 - every such agreement I have signed has had a “carve out” clause: you can list things you’ve been working on (which is vague, I have listed areas I’m interested in and have looked into and counted that as ”work”) and exclude the stuff listed there from the agreement. Of course the new employer can disagree with the choices (“ARM CPU designs? That’s what we’re hiring you to do!”) but again, if that were you, you pretty much would have freedom to negotiate. I think such an objection would be pretty fair for an employer to have in that situation. Also if you decide later you want to write a stock app but hadn’t listed it, well, c’est la vie.

throwawaygh 5y ago
> if you work at a company like that (faang, basically) you probably have a choice of working elsewhere Heh. I advise early career students from my alma mater. One of them took a job with a mom-and-pop web dev + IT firm. Super mom and pop. Like, maintaining word press and similar installs for maybe a few hundred clients and then bundling that with generic IT services (computer repair, maintenance, blah blah blah). Basically, as boring as you could possibly get. That employer told my advisee that because the company develops software, their non-compete covers all software. Are they correctly interpreting state law? Absolutely not. Does that matter to a 2x-year-old making 80K worried about losing their job, being sued, being blackballed in their small regional labor market (which they don't want to leave for family reasons)? Also no. > 2 - every such agreement I have signed has had a “carve out” clause: you can list things you’ve been working on (which is vague, I have listed areas I’m interested in and have looked into and counted that as ”work”) and exclude the stuff listed there from the agreement. Wait, are you sure that list works how you think it does? The vast majority of employers won't even talk to you about the scope of their non-compete. At the outset, you are supposed to white-list things when you start employment. But then anything non on that white-list (which includes every idea you have after the moment you fill it out!!!) has to be assumed to be covered under the NDA, unless you're willing to risk a court battle and an enemy.

blippage 5y ago

In the UK, there's Unfair Contracts.The US is the same, I would imagine. Here's what https://www.lawdepot.co.uk/contracts/non-compete-agreement/ https://www.lawdepot.co.uk/contracts/non-compete-agreement/ says: "Employers can create a Non-Compete Agreement for as long as they wish. Having said that, if a Non-Compete Agreement limits a former employee for too long, it’s unlikely that a court will enforce the document. Judges will likely consider a period of six months to a year to be a reasonable amount of time. The time period you choose should reasonably protect your company and make sense in your industry. As a result, there isn’t a standard time period for a Non-Compete Agreement." So, tricky, but anything longer than a year is likely to be deemed unreasonable. There may be exceptions, such as when a business owner sells a business, and the sale contains a non-compete. In that case, a non-compete is likely to hold up. The article goes on: "Courts may not enforce a non-compete clause in the UK if: * The effect could be harmful to the public (if it restricts commerce and depresses the local economy) * The scope is broader than necessary to protect the employer * The restriction would cause undue hardship on the employee (too difficult for the employee to find a new job) * The agreement has unreasonable time or geographic restrictions" In late 2020, the UK gov't sought feedback on "Measures to reform post-termination non-compete clauses in contracts of employment " here: https://www.gov.uk/government/consultations/measures-to-reform-post-termination-non-compete-clauses-in-contracts-of-employment https://www.gov.uk/government/consultations/measures-to-refo... The outcome has not yet been published. "The purpose of the consultation is to seek views on: * proposals to make non-compete clauses enforceable only when the employer provides compensation during the term of the clause, and whether this could be complemented by additional transparency measures and statutory limits on the length of non-compete clauses * an alternative proposal to make post-termination, non-compete clauses in contracts of employment unenforceable" This seems to be heading in the right direction. I am against non-competes in general.

achenatx 5y ago

There is a third kind which bars people working for professional services companies from taking clients directly or going to another company and taking clients.

skohan 5y ago

I just assumed that was a big part of what big tech is paying for when they over-pay developers. They are buying you off so you don't work for competitors, or someday become a competitor. It's a bit of a gilded cage.

tobmlt 5y ago

Wow, yeah thanks for this. I never have time to study for code challenges... (I am a math/physics/optimization programmer - no code challenge prep background) looks like an order of magnitude more reason not to bother.

lacker 5y ago

The second kind is "You can't compete with us while you work here". It's just semantics, but these restrictions are usually not covered by "non-compete agreements". They are more often called something like an "IP assignment agreement", where you agree that anything you produce in your employer's area of work while you are employed there, the IP belongs to your employer. In practice, many employees simply ignore these agreements, and it usually works out fine. The FAANG companies aren't in the business of suing small companies started by ex-employees. Asking legal is pointless, they will just tell you that everything is forbidden. So just ignore your legal department and work on your side project.

lamontcg 5y ago
Yeah that would be solved by NDAs and trade secrets. Then if you write a stock trading app... Did you have any contact with the team that was writing the companies stock trading app, did you sign any NDAs about that, did you receive any information about that, did you have any trade secrets? No? Then they shouldn't have any claim. IP assignment and non-competes should be eliminated for non-managerial employees. Or for IP assignment it needs to be whittled down to narrowly apply only to what the employee actually worked on, not anything the business does.
- s1artibartfast 5y ago
  NDAs and trade secrets are difficult to enforce in practice for many types of ip that can't go in a patent, like market and product strategy.
  - lamontcg 5y ago
    That is not a good reason for every software engineer at the company to be under overly-broad non-competes.
ncallaway 5y ago
> So just ignore your legal department and work on your side project. Nah, I just quit, and in my exit interview I told them why.

caconym_ 5y ago

> Obviously, if I work as a developer making a stock trading app, I shouldn't be making a competing stock trading app after hours. For rank-and-file employees, I don't think this is so obvious. It presents a potential conflict of interest, sure, but if I'm fulfilling my job responsibilities and not holding anything back or stealing nonpublic info/trade secrets/whatever then what's the problem? It shouldn't be the mere possibility of competition--we like competition, remember? In America we default to the corporation's rights taking precedence over the individual's rights. We say the mere risk that an employee's side projects might step on their employer's (poorly defined) rights in some way is enough to preemptively assign ownership of all the employee's work to their employer, just in case. From the viewpoint of the corporate masters and the lifelong-conditioned wage-slave masses, that seems good and right; in a vacuum, IMO, it seems completely backwards. We should be trying to nucleate innovation, not stifle it. Why should an employee with a good idea, who is not paid to have ideas in that scope, jump through whatever hoops it takes to get their employer to notice it--probably at the cost of their own time, uncompensated--and let said employer reap the lion's share of the rewards? Even for employees who are literally paid to generate ideas, for product design or strategy or whatever else, the onus should be on the employer to provide a good value proposition for employees to share their ideas (the original contents of their own minds) rather than hold onto them. In reality I see plenty of cases where this does happen, so while the "shower idea" argument is compelling enough, I don't think it's an effect that stands to substantially threaten corporate success regardless of whatever rote legalese appears in employment agreements. At the very least, even if (the general) you don't agree with me, you should take a step back and consider whether your personal ethic of capitalism is giving employers more moral weight than they are really due.

orangecat 5y ago
It presents a potential conflict of interest, sure, but if I'm fulfilling my job responsibilities and not holding anything back or stealing nonpublic info/trade secrets/whatever then what's the problem? This is a bit like "sure I'm dating one of my direct reports, but as long as I don't show them any special treatment what's the problem?". In both cases even if you genuinely believe what you're saying, it causes your incentives to be very much misaligned with your employer's.

cgb223 5y ago

I know the former are illegal in California, but are the latter illegal as well?

intricatedetail 5y ago

Shouldn't be a problem if they paid adequately. Employee that has 10x salary unlikely is going to look for his or hers own way. When I was on a low pay I always had side projects.

deleted 5y ago

[deleted]

dpweb 5y ago

Had a non-compete (consulting). Employer was cool at my old workplace. We didn't have any super-proprietary knowledge or book of business to walk off with - so generally they weren't enforced. But they needed it to protect the business and I can understand that. In my state, by law the contract can't cause 'undue difficulties'. You could prob make the case that were I to leave, it prevents me from working in my industry - I'd call that a good enough argument to go before a judge with, esp in a blue state.

jtsiskin 5y ago

Go ahead and make a Sudoku app. No one at Amazon will care. Contribute to the ML library. The worst that will happen in practice is they ask you to stop, but even that seems unlikely.

gpderetta 5y ago

It was a good rant

dv_dt 5y ago

I think not competing with any area in which the company works is a convenient test. But I suspect the ultimate legal test is actually more constrained. One more like: do not compete with an area for which you directly work in or are exposed to information about for the company.

adrr 5y ago

The second one is worse than that. You’re a line cook and due to businesses not wanting to pay benefits. You can only find part time gigs. Forced to sign a non compete now limits your options for a second job. Line cook is an extreme example but it happens to other professions like personal trainers. There has been cases where non competes were forced on restaurant workers.

mabbo 5y ago
> but it happens to other professions like personal trainers Funny enough, this exact issue caused me to lose a personal trainer. See, he opened a gym that competed with the gym he trained me at. Like, he was the owner and manager of that other gym. While also being an employed personal trainer at my gym. And did not hide this fact from anyone. When the gym told him he had to quit or be fired, even he was of the "I'm surprised it took this long" perspective and understood their reasoning.

ownagefool 5y ago

Actually. Why shouldn't you be able to make a stock trading app after hours?

lordnacho 5y ago

The problem is that if there's any chance an employer will win, there's a cost that the employee needs to consider. If it's not clear that non competes are going to fail immediately, people are going to get bullied by letigious employers, and less letigious employers will actually benefit from the will-he-won't-he of it too. Also note that there's a fair bit of legal myths floating around society, so if it's not made clear some people will end up backing out when they would have won.

macksd 5y ago

The first one is absolutely problematic, and I've been personally negatively affected by other people's non-competes a couple of times, but there's some nuance there, I think. I would like to live in a world where companies invest heavily in educating and training their employees and where there's a lot of transparency within companies. One of the reasons you don't get that is because of the fear of an employee getting seduced by a tiny pay increase and losing a bunch of competitive edge / trade secrets / investment. There are other ways to address that than non-competes, granted, but we're not doing those things either. In place of more nuanced non-competes you just get more companies expecting you to take on the risk of buying your own education to be trained in a job, bureaucracy and lack of trust in employees, etc.

akomtu 5y ago

If your side project is at least a two man operation, say that all the work is done by your buddy, while you only have ownership rights. Or say your buddy hired a cheap noname outsourcing firm or even a freelancer who did the work and vanished. At the end of the day, software is too complex and it's unprovable that you did any of it.

smichel17 5y ago

Agreed on the first kind. It kind of sort of makes sense in the original context: say I run a bakery. I put it up for sale. You think it's a pretty good deal, so we agree and I sell the bakery to you. Then I take the money you paid me to renovate the building across the street, hire your employees out from under you. Customers quickly learn that the "original" moved across the street, and I'm laughing all the way to the bank. A noncompete that says, "I promise not to open a bakery within 40 miles in in the next 3 years" is pretty reasonable. However, the concept deteriorates with the internet, where there's no reasonable equivalent of a 40 mile radius, so the terms become "just don't use your expertise for X years". Noncompetes for employees are much more dubious. If my head chef wants to try and pull the same trick on me, it's his investment at risk... If he's really that motivated to undercut me, maybe I should think long and hard about why. The only variant I could see being okay with is if the term starts at the start of the employment. That is, if you leave after 2 months, you can't compete for 22 months, but if you stay the full 2 years, nothing stops you. (I still don't like that, but it's tolerable). I'm not sure about the second type of noncompete. Is it the problem, or is the problem that your employer does everything? I suspect both, and a fairer version would restrict the noncompete to "stuff that you work on directly". Or maybe the noncompete should have to specify the bounds and wouldn't be enforceable if they're too broad, similar to patents... on second thought, never mind. In any case, I'd first like to see whether it's still overly restrictive if companies were capped to some reasonable size.

tartoran 5y ago
But the NCC would be for the baker to not work for another bakery within a 40 miles radius and that is terrible, they would not be able to exercise their profession.

lucideer 5y ago

> Obviously, if I work as a developer making a stock trading app, I shouldn't be making a competing stock trading app after hours. A lot of siblings have pointed out that this isn't the case (I'd agree), so it's maybe worth digging into why you (and likely many people) think this should be the case. My guess is it's to do with IP and trade-secrets, but that's clearly already covered by IP law and absolutely doesn't need extra provisions in employment contracts to protect company interests there. If I create a competing stock app, I need to be able to demonstrate novelty. If I can do that, I don't see an issue. My employer still has a lot of advantages in the market (first-to-market network effect, funding, etc.) so if I'm able to compete with them without stealing IP, I must have (tangible/intangible) assets unique to me as an individual to do so: my employment contract should not sign over those assets outside of my working hours. If I'm actively weakening my employer's product during my working hours to benefit my own that's easily a firing offence without the need for non-competes. What other reasons are there?

946789987649 5y ago
I suppose enforcability? It's easier to tell when someone has created a completing application vs whether they were purposely doing bad work (or are just incompetent)

heavyset_go 5y ago

> Obviously, if I work as a developer making a stock trading app, I shouldn't be making a competing stock trading app after hours. As long as you're not using resources from your employer, including things like IP or trade secrets, then it's not so obvious to me. What you do on your own time with your own resources is your own business. If that's seen as competition, then that's just too bad. This is how free markets work.

nobody_at_all 5y ago

> Obviously, if I work as a developer making a stock trading app, I shouldn't be making a competing stock trading app after hours. How is that obvious? If a single person, regardless of where they work, can produce a stock trading app that would actually compete against what a company is producing, why shouldn't they do it? People are starting to learn how much power they really have (see the current low wage revolt), perhaps programmers will realize it someday and stop allowing companies to steamroll them.

lostlogin 5y ago

> Edit: eesh, this was a bit of a rant, wasn't it? Not at all. I'm slightly surprised at the quality of the comments here as a whole, as many show a sentiment that employers would like.

cannabis_sam 5y ago

> The second kind is "You can't compete with us while you work here". And that is a much more complex beast. Obviously, if I work as a developer making a stock trading app, I shouldn't be making a competing stock trading app after hours. Why not? If a single developer can compete with the company that employs them, by only using their spare time, it sounds like that company could really use some competition..