12 ms·

Laws barring noncompete clauses spreading

372 points by hhs 4y ago

ptudan 4y ago
Makes a ton of sense. Completely absurd for security guards and administrative assistants to have non-compete clauses. Just another way businesses were trying to reduce the willingness of employees to quit so that they can suppress wages.
- DebtDeflation 4y ago
  It jumped the shark a few years back when Jimmy Johns tried to force their "sandwich artists" to sign non-competes.
  - Sohcahtoa82 4y ago
    Does JJ refer to their employees as sandwich artists too? I thought that was just a Subway thing. But yeah, beyond ridiculous, as if a JJ employee is going to leak some crazy trade secret to Subway or whoever.
    - justinpombrio 4y ago
      That's the most hilarious double speak. I can only imagine the repressed artists getting told off for putting 5 slices of cheese on a foot-long instead of 4. "I was just trying to express myself, you said I was an artist."
      - deleted 4y ago
        [deleted]
    - aliqot 4y ago
      Everyone knows you spread mustard from right to left. We aren't knaves.
    - munk-a 4y ago
      I assume the "sandwich artist" title is an allusion to that old saying - y'know because they pay their employees so little that they're starving.
  - omginternets 4y ago
    Jesus, “sandwich artist” is borderline insulting one’s intelligence. In France, the official term for a janitor was “surface technician”, which I previously considered to be the most condescending name for a job, but it has been violently dethroned by “sandwich artist”.
- lazide 4y ago
  Admin assistants (like actual admin assistants) usually have access to full customer contact lists, and exposure to rather intimate details of the business and executives lives. They’re definitely not comparable to security guards in that sense.
  - toomuchtodo 4y ago
    This is not enough of an excuse to encumber someone from earning a living elsewhere. > “Employers need to get creative about how to impose restrictions to protect themselves against individuals” in whom they have made significant investments, or who have been allowed access to trade secrets, to protect themselves against such employees leaving, said Maxwell N. Shaffer, a partner with Holland & Knight LLP in Denver. The sort of healthy employee-employer relationship that retains talent.
    - lazide 4y ago
      What is being banned are non-competes that don’t pay someone to not compete. There are legitimate reasons for actual non-competes in many of these cases, and CAlifornia for instance just requires you pay them for it. Which in such a situation seems justified.
      - toomuchtodo 4y ago
        I agree. If you want to pay someone to sit on the bench because that has value to you ("Garden Leave"), I support that. If you want to twist their arm because you have power as an employer, nope. That's what labor law and regulation are for. Lots of examples of malicious employers doing the latter, as you'll note the sentiment throughout the thread comments and laws intending to patch this bug in statute.
        michaelmrose 4y ago
        Why let them have that at all. The honest true is instead of worrying what strategy most balances the interests of 99.9% of people and a few whiny rich people we could spend that time creating actual value. Whereas if you want to continue on with the Rube Goldberg device we ought to force them to pay not employers present rate but market rate and cost of foregone opportunity. You might say that's incredibly unaffordable but that is the point. Otherwise the employer is robbing society of the value created in addition to stealing the difference between present rate and market rate + foregone opportunities.
- jasonwatkinspdx 4y ago
  Believe it or not they're now being used for fast food employees.
  - nraynaud 4y ago
    What is a bit hilarious is the idea that the new guy will change any procedure at his new place because of his experience somewhere else. “Thank you, but it’s the franchise HQ who makes the rules, not the rank and file”
    - jasonwatkinspdx 4y ago
      It's just a retention tool, a shitty abusive one.
  - msrenee 4y ago
    Petsmart makes you sign one or at least used to. For the groomers that they sent to training, it makes sense. For the cashiers, it ought to be illegal to have them sign it even though it's mostly unenforceable. It's an intimidation tactic. There's nothing that a damn pet store employee learns in training or in 5 years on the floor that could even begin to be considered a trade secret. Reminds me of how Gallup made everyone sign a 6-month contract in an at-will state. If you want folks to stay for at least 6 months, then don't suck so much to work for. One of the cultiest places I've ever had the misfortune to work at.
Natsu 4y ago
IMHO, companies should have to compensate the employee for the period of the non-compete since they're still effectively working for them. Salary limits are okay, but don't really go far enough. If they want this it has a value and should be compensated for fairly.
- biomcgary 4y ago
  I agree. Rather than having legislators get into the weeds of defining "compete", "trade secrets", "customer poaching", etc., laws should simply require that enforcing ANY post-employment terms require the former employer to pay the former employee the greater of the employee's maximum salary plus 10% (to cover opportunity cost) or 110% of any offer by a prospective new employer. Who better than the company to price the value of what the former employee knows? Maybe cap enforcement to 2-3 years.
  - cma 4y ago
    Why even allow this? Just makes things less competitive and pays people to be unproductive.
    - NegativeK 4y ago
      No business would do this; non-competes would be de facto banned. It's not a sincere suggestion.
      - biomcgary 4y ago
        I think rare situations can exist where a company would reasonably conclude that paying the employee not to compete is worth a lot more to the company than their salary. However, they should pay for it, not the employee (or the market, for that matter). I think open source, the internet, and Stable Diffusion have shown that the diffusion of knowledge is generally in the public interest. I really think judges made a serious mistake when they stopped treating non-compete clauses as unlawful prior restraints on trade. They are not remotely in the public interest.
      - 4y ago
mkl95 4y ago
My current contract has a lot of oddly specific noncompete stuff. Fortunately those clauses are mostly non enforceable in my country, unless your former employer still pays you a bunch of money every month. Those clauses are there to please investors.
loceng 4y ago
Isn't this ethos similar to being counter to monopolistic patents? Could this trend lead to the abolishment of patents - and perhaps should an effort be made to help people understand the comparison?
- weberer 4y ago
  Lol, no.
- blep_ 4y ago
  > and perhaps should an effort be made to help people understand the comparison? I would recommend that, because the connection isn't obvious to me.
- julienreszka 4y ago
  I don't think this is comparable.
matsemann 4y ago
Where I live (Norway), these laws came thanks to unions. When I graduated, all developer jobs I was offered had a noncompete clause in the contract. These were wide and potentially career-altering if enforced, barring you from doing basically any kind of work for long stretches of time. All companies when pushed basically said "ohh, we seldom enforce them, only for upper management", but still they insisted on them being there. Luckily my union, Tekna, helped squish most of these in 2015. They can no longer be general, they have to name specific companies and areas you can't work for if you ask. And pay full salary while enforced. So now they're basically non-existent for individual contributors / devs, except for maybe naming the main competitor if you work for a niche company.
- shadowgovt 4y ago
  I had a chance to visit Norway recently, and this was something that a tour guide impressed upon us about the culture; she gave an example of a restaurant in town that was caught skimming pay, and it wasn't just a union representing restaurant workers they heard from; they found themselves unable to find someone to repair plumbing or their storefront (the plumbers and glaziers wouldn't work with them), and their ingredient supply chain suffered (truck drivers told them to make their own 3AM trip to stock up).
  - neon_electro 4y ago
    https://en.wikipedia.org/wiki/Solidarity https://en.wikipedia.org/wiki/Solidarity
    - HPsquared 4y ago
      And its complement, https://en.wikipedia.org/wiki/Ostracism https://en.wikipedia.org/wiki/Ostracism
  - whimsicalism 4y ago
    This also happens in the US, it just isn't reported on heavily by the media. When the dining workers at my university in the US were campaigning for a contract, teamsters blocked most truck deliveries to the university
bhaney 4y ago
> Nobody likes being told when they’re about to hire someone that that person does not make enough to be eligible for a noncompete Am I supposed to feel sorry because a business has to choose between either paying an employee more, or not restricting what that employee does after they leave? Let me get my tiny violin.
- rdiddly 4y ago
  Yeah it's a weird thing to say. Nobody likes being told they're going too fast to be eligible for immunity from speeding tickets either, and yet they chose what speed to travel in that jurisdiction didn't they. Also the law isn't really about enforcing what people "like," otherwise you wouldn't need a law.
exabrial 4y ago
I think a better system is an up-front repayable bonus: "We'll pay you $2k on sign-on, but you have to stay for 2 years" or something. This benefits job applicants (extra money!), employers (retention), and protects applicants (employers abusing non-compete agreements for everything), and is a far easier legal process to execute.
- bhaney 4y ago
  This seems like the equivalent of a predatory loan with the interest paid in opportunity cost, and doesn't even properly address the same problem that noncompetes do.
  - gruez 4y ago
    >This seems like the equivalent of a predatory loan with the interest paid in opportunity cost I don't see the issue. If you feel like you might bail later, you're free to keep the money in an interest bearing account so you can pay it back.
  - ghaff 4y ago
    I agree with the second part but otherwise seems like an RSU schedule for a public company.
- shagie 4y ago
  That's attempting to solve a different problem (employee retention) than non-competes attempt to address in their original form. For example, how does a company prevent (setting aside the "should they" debate) an employee from: 1) leaving and starting up a consultancy for installing former employer's software (competing with company professional services) 2) leaving and starting up a new company that is a competitor to the former company
  - exabrial 4y ago
    1) That would be IP theft, and is already covered by other laws. 2) That is the problem I think this solves: retain your key employees. Maybe pay them a bit better than that 2% annual raise.
deathanatos 4y ago
Good riddance to this form of wage suppression. Let's do forced arbitration next.
- deleted 4y ago
  [deleted]
- bigmattystyles 4y ago
  For some reason (I never dug deeper), my friend who is an attorney said she prefers arbitration. Maybe because she already is an attorney? The only thing I can think of is that it is more expedient and having seen behind the curtain the talk of biased arbiters (biased towards the Goliath) are exaggerated. But if anyone can opine I'm all ears.
  - pyuser583 4y ago
    I’ve heard this from attorneys. The gist is: arbitration/mediation make sure the case is settled quickly. Big corporations can afford attorneys to appeal and appeal and appeal. With arbitration that does happen.
    - omginternets 4y ago
      The flip side, as I understand it, is that arbitration firms are clients of the company.
  - shemnon42 4y ago
    Forced arbitration is bad for employees, based on empirical evidence * It has a chilling effect: less disputes are filed * employees prevail less often * when employees do win the employee portion of the award is less than standard litigation https://facesofforcedarbitration.com/wp-content/uploads/2019/09/Forced-Arbitration-Report-2019.pdf https://facesofforcedarbitration.com/wp-content/uploads/2019...
  - deathanatos 4y ago
    I've yet to hear a single valid reason for forced arbitration. I have nothing against two parties, at the time of a dispute, who want to engage in arbitration, in doing so. There's also numerous stuff that should, IMO, fall into class action, but gets divvied up in forced arbitration, to the point where it isn't worth the time and expense for the individuals in the class to continue to pursue justice. (Although there have been some novel DoS style mass-arbitrations … that's more of a means of trying to force the corporations hand into a normal class action, and towards justice.) Normally the reasons cited for arbitration are things like "the courts are slow" or "the courts are expensive" or "the courts are overwhelmed" — but you could still just do arbitration at the time of dispute with those. Saying that forced arbitration is better from these arguments is non sequitur. There's also a conflict of interest between the chosen arbiter and the company. (And conflict of interest is independent of bias; a good arbiter can very well be unbiased, but it is easier for everyone involved to believe that if there isn't a conflict of interest.)
mbostleman 4y ago
My personal experience with non-compete is something that was being purchased from me by my employer as part of a severance package. Does this mean that that ability for me and my employer to make those deals is removed?
andirk 4y ago
Am I the only one who doesn't add any inventions and doesn't care about a non-compete clause because I will never honor it and come at me bro if you want to try to enforce it? I respect making sure the company doesn't steal someone's previous IP and I respect a company guarding their own IP. But I also respect that a person can work wherever the f they want without a previous company having any say.
- mywittyname 4y ago
  > and come at me bro if you want to try to enforce it? I spoke to an employment lawyer who told me in pretty clear terms: the company can come after you to enforce one if they like; it's a tossup as to whether or not it will be upheld; and regardless, it will cost a pretty penny to fight. I'd personally would not want to have that hanging over my head.
- paxys 4y ago
  You're not the only one, but this kind of "I'm a sovereign citizen!" defense also won't hold up in court for a second if the company actually wants to come after you. The vast majority of people don't run into such issues simply because they aren't important enough and/or haven't produced anything of value to waste a lawyer's time over.
- yellowapple 4y ago
  I just list my GitHub/Bitbucket/Sourcehut/etc. user pages and my website and say "everything listed at these URLs". I've yet to get any complaints about that.
- andirk 4y ago
  My Attorney General and my state fully agree with me in no uncertain terms thanks [0]. Feel free to add all those "we're not responsible at all!" clauses that ski resorts add which are also not enforceable. Thanks for the downvotes. [0] https://oag.ca.gov/news/press-releases/attorney-general-bonta-reminds-employers-and-workers-noncompete-agreements-are https://oag.ca.gov/news/press-releases/attorney-general-bont...
- squokko 4y ago
paxys 4y ago
Over the years so many different jurisdictions around the US and the world have stated their desire to be the "next Silicon Valley" and have poured an immense amount of money and effort to make it so, whether in the form of incentives for businesses, tax breaks, education, job training, or even just straight paying smart people to move there. Every such scheme has generally failed because they refused to emulate the one key piece of California law that is necessary for a startup ecosystem to exist – banning noncompetes. "But I'll spend money to train my employees and they'll just take those skills to go work for a competitor or start their own business!" Yes, that's a feature of the system, not a bug.
- kennend3 4y ago
  Here (Canada) the courts almost always rule that the non-compete is unenforceable. The core issue is the rights of an individual to earn a living supersedes the rights of a corporation. https://globalnews.ca/content/8363992/can-non-compete-clause-be-enforced/ https://globalnews.ca/content/8363992/can-non-compete-clause... " The majority of non-compete clauses challenged in the judicial system have been rendered unenforceable. Canadian courts, in my experience, look unfavourably on clauses that restrict an individual’s ability to use their knowledge and experience to earn a living." What companies here do falls into two general categories: 1) attempt to get people to sign and hope they don't know it is unenforceable. 2) pay people to stay at home and not-compete - Given this is expensive it doesnt happen often.
  - yardie 4y ago
    I wonder what the cross-section of the population is smart enough to be worth making sign a non-compete yet not smart enough to do a basic Google search on their enforceability.
    - ipaddr 4y ago
      Canadians don't break rules.
    - DangitBobby 4y ago
yellowapple 4y ago
> Colorado employers have expressed frustration with the new law, said Carrie Hoffman, a partner with Foley & Lardner LLP in Dallas. “Nobody likes being told when they’re about to hire someone” that that person does not make enough to be eligible for a noncompete, she said. Pay up or shut up. It's that fucking simple, and these abusive employers should not only be grateful that these clauses haven't been outlawed outright (as they should be), but also grateful that there's an earnings cap at all, let alone one that's low enough to exclude large swaths of the professional workforce.
- deleted 4y ago
  [deleted]
drogus 4y ago
In Germany in order for a non-compete agreement to be valid a company has to pay an employee money for the non-compete period. 50% of an average of last 3 months of employment. With this law I would be actually quite happy for a company to include a non-compete clause in the contract.
- yrgulation 4y ago
  That’s a nice and probably fair law. If you do wish to restrict your employees in what they do post employment then you need to pay them. I wouldnt mind sitting around getting half pay.
  - ghaff 4y ago
    You might not. Im guessing the person with a mortgage and family to support might feel differently. Especially if it’s half pay of base salary.
    - yrgulation 4y ago
      I agree yes, not saying it should be the norm and i am totally against non competes.
      - drogus 4y ago
        Usually you can still find jobs easily. Most of these laws also bar companies from defining it very broadly, so I don't think they could make a non-compete like "any programming job"
        ghaff 4y ago
        No. Many people cannot just find a new high-paying job quickly/easily. Outside of development specifically I have heard first hand examples that were essentially the equivalent of “any programming job.”
- aidenn0 4y ago
chaostheory 4y ago
This is one of SF Bay Area’s (and California’s) largest advantages. It’s one of the reasons why so many companies are formed and thrive here This is a great development for many of these new areas, but a bad one for California since it loses one of its edges
site-packages1 4y ago
What’s the enforcement for these anyways, when a company insists on enforcement? “Cease working for your new employer or else”?
aiperson 4y ago
They should ban unpaid non-compete clauses above 6 months. I wouldn't want them to go further than that. A half-year paid vacation is a pretty good thing for almost all workers.
munk-a 4y ago
In the US these clauses are almost never enforceable and simply serve as a chilling effect. There is a fundamental issue with non-competes that if they prevent a person's well being they can't be enforced so if a person secures a job that would violate their non-compete the enforcement of their non-compete would cause them to lose their income. This is considered a hardship so enforcement of a non-compete clause requires a clear demonstration that other work would be available which in many cases is hard to do in the modern world since it'll often require there existing a genuine offer of work to the individual - offers are normally private so they can be hard to discover but, additionally, simply demonstrating the availability and presence of job listings is usually insufficient because hiring processes are a lot more complex today then in 1800 when some dude would hand you a shovel and offer you a dime at the end of the day. I applaud their death - they are fundamentally bad for employees.
jyu 4y ago
noncompete clauses are good if you actually get compensation for not working at a competitor. e.g. firms paying you a decent salary for ~2 years after your employment is over. signing a blanket noncompete without compensation is the problem.
anttisalmela 4y ago
Finland is currently transitioning to a system where employer must compensate for the time employee is restricted, and all previously agreed contracts must be either terminated before this year ends or employee will get paid for the time according to the new law - 40% of the salary if restriction is for less than six months, 60% if more than six months.
hjeutysd 4y ago
The existence of non-competes doesn't surprise me and I'm OK with companies being allowed to require them. But what shocks me is that companies do not offer commensurate severance packages. If you have a 12-month non-compete, then you'd better pay 12 months of total compensation as severance. Over the past year, I did 3 intense long interview loops and declined 2 offers and accepted the third (a FAANG where I work now). The first two places had me jumping through hoops - take home assessments, tricky behavioral interviews, intense live coding, etc., amounting to like 10+ interview rounds spent evaluating me before making an offer. At the offer stage I politely mentioned that the offer letter included an X-month non-compete agreement and I was only able to consider signing if the doc was amended to also include an X-month severance package with clear terms on "just cause" firings (when severance is exempted) and "good reason" quitting (when severance is owed even if I quit, very common in cases where 'just cause' is included), or, I offered, the non-compete can just be removed (one of the two firms already had its main presence in California but I live on the east coast where this role was based ... but still, why a company already complying with laws banning non-competes for 90% of their workforce feels a need to include it for east coast employees is just beyond me). Of course, they both completely balked at this and we could not move forward so I declined both offers. The third company had a non-compete initially but removed it as soon as I asked - it was completely pedestrian. It's an indication of crazy entitlement on behalf of employers that they think workers should give away *for free* significant rights (like, uh, getting a new job quickly after a layoff, in your field of expertise). These rights are clearly not compensated as part of your base compensation from a job offer and any employee would be crazy to agree to those terms without severance protection. It just communicates bizarre entitlement and unprofessionalism. I hope more candidates will wise up to this and require severance packages or else decline the offers.
Waterluvian 4y ago
Years ago I had a former CEO throw a ridiculous tantrum over me leaving to work for a different company in an adjacent industry. He emailed me demanding I quit my job. A quick review with a lawyer that the non-compete is unenforceable in my province and a nastygram sent by my lawyer, and he took his tantrum elsewhere. The problem is that so many people, including some I know, get scared at the prospect of legal action that they fold, letting bully CEOs win. These laws will help.
indymike 4y ago
One of the best features of legislating against non-competes is that an employer can't sue a former employee for violating a non-compete. Right now, for most occupations in my jurisdiction (Indiana, USA), non-competes are usually not enforceable, but it costs $500-$2500 to get these lawsuits thrown out. Some employers will sue former employees knowing they can't afford a defense, or just to throw shade on them at their new job.
CaptainJack 4y ago
The UK has had a government call for evidence on the subject of non-compete, with the aim of limiting them as well, but nothing has been done so far. I'm myself in the long, lengthy and costly process of trying to fight a two years non-compete (well, 1yr garden leave + 1yr non-compete), and it's taxing. It adds stress, makes it harder to market yourself, and on top of that there is this clear asymmetry where the costs if it was to go to high court (£150k) would be huge for you, but petty change for your employer. On top of that, they'd get to claim these as expenses (so pre-tax), but you couldn't get any kind of tax-credit (so effectively post-tax). System is biased, it's about time they would change it.
- yrgulation 4y ago
  Thats interesting, i never heard of or met anyone in the uk with a non compete clause and always assumed it is a non issue.
  - omginternets 4y ago
    Fwiw, I worked in the UK for several years and noncompetes were absolutely standard. Moreover, they appear to be enforceable.
    - yrgulation 4y ago
      What domain out of curiosity?
      - omginternets 4y ago
        I did software consulting for a few different clients that built "smart" irrigation pumps. The work was an even split between a custom SOP/ERP/back-office system, and data-ingestion/processing pipelines. There was a fair bit of IP involved.
brindlejim 4y ago
Banning non-competes is a great idea. However, everyone here should be aware that lots of startups are now including "power of attorney" clauses in their employment contracts that grant to the employer power of attorney to assign inventions to themselves. Feels like there's a lot of room for abuse, which could discourage moves to competitors.
- _tom_ 4y ago
  Yeah, I've signed that. I hate it, but I understand. If the employee can't be reached, they can still finish the patent. If the employee won't cooperate, they can get the patent. They better be paying for this upfront.
kbos87 4y ago
I am technically held to a non-compete by my employer, but it honestly never crosses my mind. If push came to shove and I wanted to move on to somewhere they had a problem with, I feel like odds are tiny that they'd do anything close to trying to enforce it. It's a terrible look to come after your employees based on a non-compete, and I bet most brand-conscious employers would think twice about the value in actually testing it.
oolveea 4y ago
So from I understand only companies that can pay 100k can make their employees sign non-compete, and keep this big firm’s technology secret, whereas a startup that cannot pay 100k, its tech can be openly shared.. … ………..
- _tom_ 4y ago
  Most starting salaries in tech are over $100k, at least in high COL areas. That's why the limit.
deleted 4y ago
[deleted]
LatteLazy 4y ago
While this is a good thing, be careful: other shady practices are spreading to replace non-competes. One example is clauses requiring employees to pay companies back for "training" provided if they leave for any reason. Can you afford to take a new job with a 10k pay rise if you have to pay existing employer 20k to leave?

372 points by hhs 4y ago

Makes a ton of sense. Completely absurd for security guards and administrative assistants to have non-compete clauses. Just another way businesses were trying to reduce the willingness of employees to quit so that they can suppress wages.

DebtDeflation 4y ago
It jumped the shark a few years back when Jimmy Johns tried to force their "sandwich artists" to sign non-competes.
- Sohcahtoa82 4y ago
  Does JJ refer to their employees as sandwich artists too? I thought that was just a Subway thing. But yeah, beyond ridiculous, as if a JJ employee is going to leak some crazy trade secret to Subway or whoever.
  - justinpombrio 4y ago
    That's the most hilarious double speak. I can only imagine the repressed artists getting told off for putting 5 slices of cheese on a foot-long instead of 4. "I was just trying to express myself, you said I was an artist."
    - deleted 4y ago
      [deleted]
  - aliqot 4y ago
    Everyone knows you spread mustard from right to left. We aren't knaves.
  - munk-a 4y ago
    I assume the "sandwich artist" title is an allusion to that old saying - y'know because they pay their employees so little that they're starving.
- omginternets 4y ago
  Jesus, “sandwich artist” is borderline insulting one’s intelligence. In France, the official term for a janitor was “surface technician”, which I previously considered to be the most condescending name for a job, but it has been violently dethroned by “sandwich artist”.
lazide 4y ago
Admin assistants (like actual admin assistants) usually have access to full customer contact lists, and exposure to rather intimate details of the business and executives lives. They’re definitely not comparable to security guards in that sense.
- toomuchtodo 4y ago
  This is not enough of an excuse to encumber someone from earning a living elsewhere. > “Employers need to get creative about how to impose restrictions to protect themselves against individuals” in whom they have made significant investments, or who have been allowed access to trade secrets, to protect themselves against such employees leaving, said Maxwell N. Shaffer, a partner with Holland & Knight LLP in Denver. The sort of healthy employee-employer relationship that retains talent.
  - lazide 4y ago
    What is being banned are non-competes that don’t pay someone to not compete. There are legitimate reasons for actual non-competes in many of these cases, and CAlifornia for instance just requires you pay them for it. Which in such a situation seems justified.
    - toomuchtodo 4y ago
      I agree. If you want to pay someone to sit on the bench because that has value to you ("Garden Leave"), I support that. If you want to twist their arm because you have power as an employer, nope. That's what labor law and regulation are for. Lots of examples of malicious employers doing the latter, as you'll note the sentiment throughout the thread comments and laws intending to patch this bug in statute.
      - michaelmrose 4y ago
        Why let them have that at all. The honest true is instead of worrying what strategy most balances the interests of 99.9% of people and a few whiny rich people we could spend that time creating actual value. Whereas if you want to continue on with the Rube Goldberg device we ought to force them to pay not employers present rate but market rate and cost of foregone opportunity. You might say that's incredibly unaffordable but that is the point. Otherwise the employer is robbing society of the value created in addition to stealing the difference between present rate and market rate + foregone opportunities.
jasonwatkinspdx 4y ago
Believe it or not they're now being used for fast food employees.
- nraynaud 4y ago
  What is a bit hilarious is the idea that the new guy will change any procedure at his new place because of his experience somewhere else. “Thank you, but it’s the franchise HQ who makes the rules, not the rank and file”
  - jasonwatkinspdx 4y ago
    It's just a retention tool, a shitty abusive one.
- msrenee 4y ago
  Petsmart makes you sign one or at least used to. For the groomers that they sent to training, it makes sense. For the cashiers, it ought to be illegal to have them sign it even though it's mostly unenforceable. It's an intimidation tactic. There's nothing that a damn pet store employee learns in training or in 5 years on the floor that could even begin to be considered a trade secret. Reminds me of how Gallup made everyone sign a 6-month contract in an at-will state. If you want folks to stay for at least 6 months, then don't suck so much to work for. One of the cultiest places I've ever had the misfortune to work at.

Natsu 4y ago

IMHO, companies should have to compensate the employee for the period of the non-compete since they're still effectively working for them. Salary limits are okay, but don't really go far enough. If they want this it has a value and should be compensated for fairly.

biomcgary 4y ago
I agree. Rather than having legislators get into the weeds of defining "compete", "trade secrets", "customer poaching", etc., laws should simply require that enforcing ANY post-employment terms require the former employer to pay the former employee the greater of the employee's maximum salary plus 10% (to cover opportunity cost) or 110% of any offer by a prospective new employer. Who better than the company to price the value of what the former employee knows? Maybe cap enforcement to 2-3 years.
- cma 4y ago
  Why even allow this? Just makes things less competitive and pays people to be unproductive.
  - NegativeK 4y ago
    No business would do this; non-competes would be de facto banned. It's not a sincere suggestion.
    - biomcgary 4y ago
      I think rare situations can exist where a company would reasonably conclude that paying the employee not to compete is worth a lot more to the company than their salary. However, they should pay for it, not the employee (or the market, for that matter). I think open source, the internet, and Stable Diffusion have shown that the diffusion of knowledge is generally in the public interest. I really think judges made a serious mistake when they stopped treating non-compete clauses as unlawful prior restraints on trade. They are not remotely in the public interest.
    - 4y ago

mkl95 4y ago

My current contract has a lot of oddly specific noncompete stuff. Fortunately those clauses are mostly non enforceable in my country, unless your former employer still pays you a bunch of money every month. Those clauses are there to please investors.

loceng 4y ago

Isn't this ethos similar to being counter to monopolistic patents? Could this trend lead to the abolishment of patents - and perhaps should an effort be made to help people understand the comparison?

weberer 4y ago
Lol, no.
blep_ 4y ago
> and perhaps should an effort be made to help people understand the comparison? I would recommend that, because the connection isn't obvious to me.
julienreszka 4y ago
I don't think this is comparable.

matsemann 4y ago

Where I live (Norway), these laws came thanks to unions. When I graduated, all developer jobs I was offered had a noncompete clause in the contract. These were wide and potentially career-altering if enforced, barring you from doing basically any kind of work for long stretches of time. All companies when pushed basically said "ohh, we seldom enforce them, only for upper management", but still they insisted on them being there. Luckily my union, Tekna, helped squish most of these in 2015. They can no longer be general, they have to name specific companies and areas you can't work for if you ask. And pay full salary while enforced. So now they're basically non-existent for individual contributors / devs, except for maybe naming the main competitor if you work for a niche company.

shadowgovt 4y ago
I had a chance to visit Norway recently, and this was something that a tour guide impressed upon us about the culture; she gave an example of a restaurant in town that was caught skimming pay, and it wasn't just a union representing restaurant workers they heard from; they found themselves unable to find someone to repair plumbing or their storefront (the plumbers and glaziers wouldn't work with them), and their ingredient supply chain suffered (truck drivers told them to make their own 3AM trip to stock up).
- neon_electro 4y ago
  https://en.wikipedia.org/wiki/Solidarity https://en.wikipedia.org/wiki/Solidarity
  - HPsquared 4y ago
    And its complement, https://en.wikipedia.org/wiki/Ostracism https://en.wikipedia.org/wiki/Ostracism
- whimsicalism 4y ago
  This also happens in the US, it just isn't reported on heavily by the media. When the dining workers at my university in the US were campaigning for a contract, teamsters blocked most truck deliveries to the university

bhaney 4y ago

> Nobody likes being told when they’re about to hire someone that that person does not make enough to be eligible for a noncompete Am I supposed to feel sorry because a business has to choose between either paying an employee more, or not restricting what that employee does after they leave? Let me get my tiny violin.

rdiddly 4y ago
Yeah it's a weird thing to say. Nobody likes being told they're going too fast to be eligible for immunity from speeding tickets either, and yet they chose what speed to travel in that jurisdiction didn't they. Also the law isn't really about enforcing what people "like," otherwise you wouldn't need a law.

exabrial 4y ago

I think a better system is an up-front repayable bonus: "We'll pay you $2k on sign-on, but you have to stay for 2 years" or something. This benefits job applicants (extra money!), employers (retention), and protects applicants (employers abusing non-compete agreements for everything), and is a far easier legal process to execute.

bhaney 4y ago
This seems like the equivalent of a predatory loan with the interest paid in opportunity cost, and doesn't even properly address the same problem that noncompetes do.
- gruez 4y ago
  >This seems like the equivalent of a predatory loan with the interest paid in opportunity cost I don't see the issue. If you feel like you might bail later, you're free to keep the money in an interest bearing account so you can pay it back.
- ghaff 4y ago
  I agree with the second part but otherwise seems like an RSU schedule for a public company.
shagie 4y ago
That's attempting to solve a different problem (employee retention) than non-competes attempt to address in their original form. For example, how does a company prevent (setting aside the "should they" debate) an employee from: 1) leaving and starting up a consultancy for installing former employer's software (competing with company professional services) 2) leaving and starting up a new company that is a competitor to the former company
- exabrial 4y ago
  1) That would be IP theft, and is already covered by other laws. 2) That is the problem I think this solves: retain your key employees. Maybe pay them a bit better than that 2% annual raise.

deathanatos 4y ago

Good riddance to this form of wage suppression. Let's do forced arbitration next.

deleted 4y ago
[deleted]
bigmattystyles 4y ago
For some reason (I never dug deeper), my friend who is an attorney said she prefers arbitration. Maybe because she already is an attorney? The only thing I can think of is that it is more expedient and having seen behind the curtain the talk of biased arbiters (biased towards the Goliath) are exaggerated. But if anyone can opine I'm all ears.
- pyuser583 4y ago
  I’ve heard this from attorneys. The gist is: arbitration/mediation make sure the case is settled quickly. Big corporations can afford attorneys to appeal and appeal and appeal. With arbitration that does happen.
  - omginternets 4y ago
    The flip side, as I understand it, is that arbitration firms are clients of the company.
- shemnon42 4y ago
  Forced arbitration is bad for employees, based on empirical evidence * It has a chilling effect: less disputes are filed * employees prevail less often * when employees do win the employee portion of the award is less than standard litigation https://facesofforcedarbitration.com/wp-content/uploads/2019/09/Forced-Arbitration-Report-2019.pdf https://facesofforcedarbitration.com/wp-content/uploads/2019...
- deathanatos 4y ago
  I've yet to hear a single valid reason for forced arbitration. I have nothing against two parties, at the time of a dispute, who want to engage in arbitration, in doing so. There's also numerous stuff that should, IMO, fall into class action, but gets divvied up in forced arbitration, to the point where it isn't worth the time and expense for the individuals in the class to continue to pursue justice. (Although there have been some novel DoS style mass-arbitrations … that's more of a means of trying to force the corporations hand into a normal class action, and towards justice.) Normally the reasons cited for arbitration are things like "the courts are slow" or "the courts are expensive" or "the courts are overwhelmed" — but you could still just do arbitration at the time of dispute with those. Saying that forced arbitration is better from these arguments is non sequitur. There's also a conflict of interest between the chosen arbiter and the company. (And conflict of interest is independent of bias; a good arbiter can very well be unbiased, but it is easier for everyone involved to believe that if there isn't a conflict of interest.)

mbostleman 4y ago

My personal experience with non-compete is something that was being purchased from me by my employer as part of a severance package. Does this mean that that ability for me and my employer to make those deals is removed?

andirk 4y ago

Am I the only one who doesn't add any inventions and doesn't care about a non-compete clause because I will never honor it and come at me bro if you want to try to enforce it? I respect making sure the company doesn't steal someone's previous IP and I respect a company guarding their own IP. But I also respect that a person can work wherever the f they want without a previous company having any say.

mywittyname 4y ago
> and come at me bro if you want to try to enforce it? I spoke to an employment lawyer who told me in pretty clear terms: the company can come after you to enforce one if they like; it's a tossup as to whether or not it will be upheld; and regardless, it will cost a pretty penny to fight. I'd personally would not want to have that hanging over my head.
paxys 4y ago
You're not the only one, but this kind of "I'm a sovereign citizen!" defense also won't hold up in court for a second if the company actually wants to come after you. The vast majority of people don't run into such issues simply because they aren't important enough and/or haven't produced anything of value to waste a lawyer's time over.
yellowapple 4y ago
I just list my GitHub/Bitbucket/Sourcehut/etc. user pages and my website and say "everything listed at these URLs". I've yet to get any complaints about that.
andirk 4y ago
My Attorney General and my state fully agree with me in no uncertain terms thanks [0]. Feel free to add all those "we're not responsible at all!" clauses that ski resorts add which are also not enforceable. Thanks for the downvotes. [0] https://oag.ca.gov/news/press-releases/attorney-general-bonta-reminds-employers-and-workers-noncompete-agreements-are https://oag.ca.gov/news/press-releases/attorney-general-bont...
squokko 4y ago

paxys 4y ago

Over the years so many different jurisdictions around the US and the world have stated their desire to be the "next Silicon Valley" and have poured an immense amount of money and effort to make it so, whether in the form of incentives for businesses, tax breaks, education, job training, or even just straight paying smart people to move there. Every such scheme has generally failed because they refused to emulate the one key piece of California law that is necessary for a startup ecosystem to exist – banning noncompetes. "But I'll spend money to train my employees and they'll just take those skills to go work for a competitor or start their own business!" Yes, that's a feature of the system, not a bug.

kennend3 4y ago
Here (Canada) the courts almost always rule that the non-compete is unenforceable. The core issue is the rights of an individual to earn a living supersedes the rights of a corporation. https://globalnews.ca/content/8363992/can-non-compete-clause-be-enforced/ https://globalnews.ca/content/8363992/can-non-compete-clause... " The majority of non-compete clauses challenged in the judicial system have been rendered unenforceable. Canadian courts, in my experience, look unfavourably on clauses that restrict an individual’s ability to use their knowledge and experience to earn a living." What companies here do falls into two general categories: 1) attempt to get people to sign and hope they don't know it is unenforceable. 2) pay people to stay at home and not-compete - Given this is expensive it doesnt happen often.
- yardie 4y ago
  I wonder what the cross-section of the population is smart enough to be worth making sign a non-compete yet not smart enough to do a basic Google search on their enforceability.
  - ipaddr 4y ago
    Canadians don't break rules.
  - DangitBobby 4y ago

yellowapple 4y ago

> Colorado employers have expressed frustration with the new law, said Carrie Hoffman, a partner with Foley & Lardner LLP in Dallas. “Nobody likes being told when they’re about to hire someone” that that person does not make enough to be eligible for a noncompete, she said. Pay up or shut up. It's that fucking simple, and these abusive employers should not only be grateful that these clauses haven't been outlawed outright (as they should be), but also grateful that there's an earnings cap at all, let alone one that's low enough to exclude large swaths of the professional workforce.

deleted 4y ago
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drogus 4y ago

In Germany in order for a non-compete agreement to be valid a company has to pay an employee money for the non-compete period. 50% of an average of last 3 months of employment. With this law I would be actually quite happy for a company to include a non-compete clause in the contract.

yrgulation 4y ago
That’s a nice and probably fair law. If you do wish to restrict your employees in what they do post employment then you need to pay them. I wouldnt mind sitting around getting half pay.
- ghaff 4y ago
  You might not. Im guessing the person with a mortgage and family to support might feel differently. Especially if it’s half pay of base salary.
  - yrgulation 4y ago
    I agree yes, not saying it should be the norm and i am totally against non competes.
    - drogus 4y ago
      Usually you can still find jobs easily. Most of these laws also bar companies from defining it very broadly, so I don't think they could make a non-compete like "any programming job"
      - ghaff 4y ago
        No. Many people cannot just find a new high-paying job quickly/easily. Outside of development specifically I have heard first hand examples that were essentially the equivalent of “any programming job.”
aidenn0 4y ago

chaostheory 4y ago

This is one of SF Bay Area’s (and California’s) largest advantages. It’s one of the reasons why so many companies are formed and thrive here This is a great development for many of these new areas, but a bad one for California since it loses one of its edges

site-packages1 4y ago

What’s the enforcement for these anyways, when a company insists on enforcement? “Cease working for your new employer or else”?

aiperson 4y ago

They should ban unpaid non-compete clauses above 6 months. I wouldn't want them to go further than that. A half-year paid vacation is a pretty good thing for almost all workers.

munk-a 4y ago

In the US these clauses are almost never enforceable and simply serve as a chilling effect. There is a fundamental issue with non-competes that if they prevent a person's well being they can't be enforced so if a person secures a job that would violate their non-compete the enforcement of their non-compete would cause them to lose their income. This is considered a hardship so enforcement of a non-compete clause requires a clear demonstration that other work would be available which in many cases is hard to do in the modern world since it'll often require there existing a genuine offer of work to the individual - offers are normally private so they can be hard to discover but, additionally, simply demonstrating the availability and presence of job listings is usually insufficient because hiring processes are a lot more complex today then in 1800 when some dude would hand you a shovel and offer you a dime at the end of the day. I applaud their death - they are fundamentally bad for employees.

jyu 4y ago

noncompete clauses are good if you actually get compensation for not working at a competitor. e.g. firms paying you a decent salary for ~2 years after your employment is over. signing a blanket noncompete without compensation is the problem.

anttisalmela 4y ago

Finland is currently transitioning to a system where employer must compensate for the time employee is restricted, and all previously agreed contracts must be either terminated before this year ends or employee will get paid for the time according to the new law - 40% of the salary if restriction is for less than six months, 60% if more than six months.

hjeutysd 4y ago

The existence of non-competes doesn't surprise me and I'm OK with companies being allowed to require them. But what shocks me is that companies do not offer commensurate severance packages. If you have a 12-month non-compete, then you'd better pay 12 months of total compensation as severance. Over the past year, I did 3 intense long interview loops and declined 2 offers and accepted the third (a FAANG where I work now). The first two places had me jumping through hoops - take home assessments, tricky behavioral interviews, intense live coding, etc., amounting to like 10+ interview rounds spent evaluating me before making an offer. At the offer stage I politely mentioned that the offer letter included an X-month non-compete agreement and I was only able to consider signing if the doc was amended to also include an X-month severance package with clear terms on "just cause" firings (when severance is exempted) and "good reason" quitting (when severance is owed even if I quit, very common in cases where 'just cause' is included), or, I offered, the non-compete can just be removed (one of the two firms already had its main presence in California but I live on the east coast where this role was based ... but still, why a company already complying with laws banning non-competes for 90% of their workforce feels a need to include it for east coast employees is just beyond me). Of course, they both completely balked at this and we could not move forward so I declined both offers. The third company had a non-compete initially but removed it as soon as I asked - it was completely pedestrian. It's an indication of crazy entitlement on behalf of employers that they think workers should give away *for free* significant rights (like, uh, getting a new job quickly after a layoff, in your field of expertise). These rights are clearly not compensated as part of your base compensation from a job offer and any employee would be crazy to agree to those terms without severance protection. It just communicates bizarre entitlement and unprofessionalism. I hope more candidates will wise up to this and require severance packages or else decline the offers.

Waterluvian 4y ago

Years ago I had a former CEO throw a ridiculous tantrum over me leaving to work for a different company in an adjacent industry. He emailed me demanding I quit my job. A quick review with a lawyer that the non-compete is unenforceable in my province and a nastygram sent by my lawyer, and he took his tantrum elsewhere. The problem is that so many people, including some I know, get scared at the prospect of legal action that they fold, letting bully CEOs win. These laws will help.

indymike 4y ago

One of the best features of legislating against non-competes is that an employer can't sue a former employee for violating a non-compete. Right now, for most occupations in my jurisdiction (Indiana, USA), non-competes are usually not enforceable, but it costs $500-$2500 to get these lawsuits thrown out. Some employers will sue former employees knowing they can't afford a defense, or just to throw shade on them at their new job.

CaptainJack 4y ago

The UK has had a government call for evidence on the subject of non-compete, with the aim of limiting them as well, but nothing has been done so far. I'm myself in the long, lengthy and costly process of trying to fight a two years non-compete (well, 1yr garden leave + 1yr non-compete), and it's taxing. It adds stress, makes it harder to market yourself, and on top of that there is this clear asymmetry where the costs if it was to go to high court (£150k) would be huge for you, but petty change for your employer. On top of that, they'd get to claim these as expenses (so pre-tax), but you couldn't get any kind of tax-credit (so effectively post-tax). System is biased, it's about time they would change it.

yrgulation 4y ago
Thats interesting, i never heard of or met anyone in the uk with a non compete clause and always assumed it is a non issue.
- omginternets 4y ago
  Fwiw, I worked in the UK for several years and noncompetes were absolutely standard. Moreover, they appear to be enforceable.
  - yrgulation 4y ago
    What domain out of curiosity?
    - omginternets 4y ago
      I did software consulting for a few different clients that built "smart" irrigation pumps. The work was an even split between a custom SOP/ERP/back-office system, and data-ingestion/processing pipelines. There was a fair bit of IP involved.

brindlejim 4y ago

Banning non-competes is a great idea. However, everyone here should be aware that lots of startups are now including "power of attorney" clauses in their employment contracts that grant to the employer power of attorney to assign inventions to themselves. Feels like there's a lot of room for abuse, which could discourage moves to competitors.

_tom_ 4y ago
Yeah, I've signed that. I hate it, but I understand. If the employee can't be reached, they can still finish the patent. If the employee won't cooperate, they can get the patent. They better be paying for this upfront.

kbos87 4y ago

I am technically held to a non-compete by my employer, but it honestly never crosses my mind. If push came to shove and I wanted to move on to somewhere they had a problem with, I feel like odds are tiny that they'd do anything close to trying to enforce it. It's a terrible look to come after your employees based on a non-compete, and I bet most brand-conscious employers would think twice about the value in actually testing it.

oolveea 4y ago

So from I understand only companies that can pay 100k can make their employees sign non-compete, and keep this big firm’s technology secret, whereas a startup that cannot pay 100k, its tech can be openly shared.. … ………..

_tom_ 4y ago
Most starting salaries in tech are over $100k, at least in high COL areas. That's why the limit.

deleted 4y ago

[deleted]

LatteLazy 4y ago

While this is a good thing, be careful: other shady practices are spreading to replace non-competes. One example is clauses requiring employees to pay companies back for "training" provided if they leave for any reason. Can you afford to take a new job with a 10k pay rise if you have to pay existing employer 20k to leave?