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One of the major assumptions of market economics is a competitive environment. Here is a study on the policy of non-competes from the Office of Economic Policy

One of the major assumptions of market economics is a competitive environment. Here is a study on the policy of non-competes from the Office of Economic Policy in the US treasury. https://home.treasury.gov/system/files/226/Non_Compete_Contracts_Econimic_Effects_and_Policy_Implications_MAR2016.pdf https://home.treasury.gov/system/files/226/Non_Compete_Contr... First I had no idea how prolific non-competes are. > Non-competes are a central labor market institution, with nearly one fifth of all American workers currently bound by such a contract. After the policy recommendations, here is the conclusion from that paper. > Though non-compete contracts can have important social benefits, principally related to the protection of trade secrets, a growing body of evidence suggests that they are frequently used in ways that are inimical to the interests of workers and the broader economy. Enhancing the transparency of non-competes, better aligning them with legitimate social purposes like protection of trade secrets, and instituting minimal worker protections can all help to ensure that non-compete contracts contribute to economic growth without unduly burdening workers.

olliej 5y ago
Yes, the ability to prohibit an employee from choosing who to work for, while costing the company nothing at all does indeed lead to worse outcomes for the worker. Any non-compete clause must come with a requirement to pay that employee to not compete. That will quickly get rid of non-competes that aren't actually their for the purpose of protecting trade secrets.
- pottertheotter 5y ago
  On Wall Street we often have Garden Leave, where an employee continues to receive salary and benefits for a period of time after resigning to go to a competitor. Seems pretty fair to me.
  - david38 5y ago
    Only if the pay is what he would be getting elsewhere and if the garden leave isn’t so long his skills will be considered old.
- lsaferite 5y ago
  Companies like to frame this as "you were duly compensated via the pay you received while employed". I disagree with that sentiment.
matheusmoreira 5y ago
It bothers me that they needed a study to figure this out. It's almost a law of the universe that businesses will attempt to accumulate as much advantage and leverage as possible. Simply put, why would a business choose not to have a non-compete? It costs them nothing and reduces employee leverage and options which will obviously lead to them accepting poorer working conditions and inferior compensation. The only reasons not to have this standard legal boilerplate on every contract are: it's literally illegal or otherwise unenforceable, or the employee already has so much leverage they can negotiate terms of the contract.

olliej 5y ago

Yes, the ability to prohibit an employee from choosing who to work for, while costing the company nothing at all does indeed lead to worse outcomes for the worker. Any non-compete clause must come with a requirement to pay that employee to not compete. That will quickly get rid of non-competes that aren't actually their for the purpose of protecting trade secrets.

pottertheotter 5y ago
On Wall Street we often have Garden Leave, where an employee continues to receive salary and benefits for a period of time after resigning to go to a competitor. Seems pretty fair to me.
- david38 5y ago
  Only if the pay is what he would be getting elsewhere and if the garden leave isn’t so long his skills will be considered old.
lsaferite 5y ago
Companies like to frame this as "you were duly compensated via the pay you received while employed". I disagree with that sentiment.

matheusmoreira 5y ago

It bothers me that they needed a study to figure this out. It's almost a law of the universe that businesses will attempt to accumulate as much advantage and leverage as possible. Simply put, why would a business choose not to have a non-compete? It costs them nothing and reduces employee leverage and options which will obviously lead to them accepting poorer working conditions and inferior compensation. The only reasons not to have this standard legal boilerplate on every contract are: it's literally illegal or otherwise unenforceable, or the employee already has so much leverage they can negotiate terms of the contract.