5 ms·

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 ok

by 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.
    - Cheezewheel 4y ago
      >No business would do this; non-competes would be de facto banned That is the point. It is a sincere suggestion, because it would force companies to only seek out a non-compete in the case where the employees knowledge is valuable enough to warrant subsidizing their extended vacation. And this does happen in the finance industry. Some businesses do in fact do this.
- jiggawatts 4y ago
  My current employer tried to make me sign a noncompete clause and I asked them for precisely this. They were flabbergasted that I wanted compensation in exchange for essentially cutting myself off from a wide swath of employment opportunities. “Aren’t you our slave to do with as we see fit!?” was very much the attitude that I was getting.
hailwren 4y ago
Yep. This is what we do in finance. It sucks a bit because most of our comp is bonus and you only get your base pay on garden leave, but I’m shocked this isn’t a requirement.
- ghaff 4y ago
  Garden leave isn’t a panacea. And in MA it’s minimum 50% of salary. It does make the employer put skin in the game which is no small thing. But it may end up with someone not being able to be in a competitive job for a year for maybe 25% of their prior comp. Not a great situation for a lot of people.
mywittyname 4y ago
This would make things interesting. I kind of want to see what would happen if states passed laws saying that all non-compete clauses contained an implicit agreement that the employee be paid their entire salary (including bonuses) for the pro-rated duration of the non-compete and that such clauses can be triggered by either party. We all know the value of a non-compete clause is $0 for most employees. Hell, they are probably most effective at bullying unproductive workers who hate their jobs into staying on too long, thus might actually be a net negative for employers.
- willcipriano 4y ago
  The best part would be the rapid "Oh no, we don't need you on a non-compete anymore" throughout the state the day after the law passed. All of sudden how to fold sheets the Ramada way isn't a highly confidential trade secret.
  - bumby 4y ago
    >The best part would be the rapid "Oh no, we don't need you on a non-compete anymore" I've witnessed this on the other end. Someone was being pressured to engage in sales that would violate her non-compete that was openly discussed during the hiring phase. When she essentially said, "Sure, I have no problem breaking it as long as you put it in writing that you'll cover any legal fees" suddenly the new employer didn't think sales in that region were quite as important.
drogus 4y ago
This is how it works in Germany and in some other EU countries. Companies need to pay 50% of an average of 3 last months salary in order to enforce a non-compete clause.
- debesyla 4y ago
  Yeah, same in Lithuania.

by Natsu 4y ago

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.
  - Cheezewheel 4y ago
    >No business would do this; non-competes would be de facto banned That is the point. It is a sincere suggestion, because it would force companies to only seek out a non-compete in the case where the employees knowledge is valuable enough to warrant subsidizing their extended vacation. And this does happen in the finance industry. Some businesses do in fact do this.
jiggawatts 4y ago
My current employer tried to make me sign a noncompete clause and I asked them for precisely this. They were flabbergasted that I wanted compensation in exchange for essentially cutting myself off from a wide swath of employment opportunities. “Aren’t you our slave to do with as we see fit!?” was very much the attitude that I was getting.

hailwren 4y ago

Yep. This is what we do in finance. It sucks a bit because most of our comp is bonus and you only get your base pay on garden leave, but I’m shocked this isn’t a requirement.

ghaff 4y ago
Garden leave isn’t a panacea. And in MA it’s minimum 50% of salary. It does make the employer put skin in the game which is no small thing. But it may end up with someone not being able to be in a competitive job for a year for maybe 25% of their prior comp. Not a great situation for a lot of people.

mywittyname 4y ago

This would make things interesting. I kind of want to see what would happen if states passed laws saying that all non-compete clauses contained an implicit agreement that the employee be paid their entire salary (including bonuses) for the pro-rated duration of the non-compete and that such clauses can be triggered by either party. We all know the value of a non-compete clause is $0 for most employees. Hell, they are probably most effective at bullying unproductive workers who hate their jobs into staying on too long, thus might actually be a net negative for employers.

willcipriano 4y ago
The best part would be the rapid "Oh no, we don't need you on a non-compete anymore" throughout the state the day after the law passed. All of sudden how to fold sheets the Ramada way isn't a highly confidential trade secret.
- bumby 4y ago
  >The best part would be the rapid "Oh no, we don't need you on a non-compete anymore" I've witnessed this on the other end. Someone was being pressured to engage in sales that would violate her non-compete that was openly discussed during the hiring phase. When she essentially said, "Sure, I have no problem breaking it as long as you put it in writing that you'll cover any legal fees" suddenly the new employer didn't think sales in that region were quite as important.

drogus 4y ago

This is how it works in Germany and in some other EU countries. Companies need to pay 50% of an average of 3 last months salary in order to enforce a non-compete clause.

debesyla 4y ago
Yeah, same in Lithuania.