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From one law class I took the way it was explained is this. The original purpose of non-competes was for people like C-Suite executives, and sales people. The
by hemloc_io 5y ago
From one law class I took the way it was explained is this.
The original purpose of non-competes was for people like C-Suite executives, and sales people. The point being that you don't want sales people walking out the door and taking a whole client list with them etc. This makes sense because you want to protect things like IP, strategy etc. The theory goes that companies wouldn't want to build up long term strategies or technologies if those people can just walk out the door and bring those things with them. It's also unfair to the company that a salesperson can walk out the door with a client list.
For your standard employee it shouldn't be used, but in 2008 when the recession happened companies got away with it and now it's standard even if they're unenforceable. They get "blue penned" a lot, where the terms of the non-compete get changed in court. IANAL but non-competes have been around forever and I doubt they would violate things like the 13th amendment or something like that.
Tbh I think the best of both worlds would be that you force companies to do the thing Wall Street Traders get. If you want to sign a non-compete the company has to pay out the employee's salary for X amount of years the company wants them off the market. Provides a nice balance where the company can't just non-compete everyone b/c now they have skin in the game.
- dragonwriter 5y ago> From one law class I took the way it was explained is this > The original purpose of non-competes was for people like C-Suite executives, and sales people It wasn't; the original purpose of noncompetes was for lower-rank guildsmen employed by guildmasters; we know this because there are British cases adjudicating them back to at least the early 15th Century and statutes restricting them back to at least the mid 16th. So, take any explanation that starts with the “C-suite and salespeople” origin story as suspect.
- petermcneeley 5y agoIts interesting because I am guessing that this might be done today as educational debt. There were probably laws against debt back in the 15th century which prohibited this solution.