5 ms·

> anti-free-market policy I go back and forth on that. It seems like the free market ideal would be to allow them and if people didn't like them they wouldn't

by donatj 4y ago

> anti-free-market policy I go back and forth on that. It seems like the free market ideal would be to allow them and if people didn't like them they wouldn't sign them. No one telling anyone what to do. It certainly hasn't panned out that way though.

bern4444 4y ago
No, individuals have far less market power than institutions and businesses. Especially since health care is tied to employment. It's a privileged position if you can 'just say no' to a company that has non compete clauses - the majority of workers cannot.
horsawlarway 4y ago
https://en.wikipedia.org/wiki/Inequality_of_bargaining_power https://en.wikipedia.org/wiki/Inequality_of_bargaining_power The idea is well known for hundreds of years, but here's a particularly salient quote for your line of thinking. ---- "In so far as the reduction of costs of production and distribution thus achieved is reflected in reduced prices, society as a whole ultimately benefits from the use of standard contracts… The use of contracts has, however, another aspect which has become increasingly important. Standard contracts are typically used by enterprises with strong bargaining power. The weaker party, in need of the goods or services, is frequently not in a position to shop around for better terms, either because the author of the standard contract has a monopoly (natural or artificial) or because all competitors use the same clauses. His contractual intention is but a subjection more or less voluntary to terms dictated by the stronger party, terms whose consequences are often understood only in a vague way, if at all." F Kessler, ‘Contracts of Adhesion--Some thoughts about Freedom of Contract’
- bumby 4y ago
  Workers have mechanisms to balance that power. E.g., forming a union, which could ensure the contract is more fair. I don't know what to make of the fact that they don't use them. In your opinion, is there a reason why something like a union couldn't be used to negate or modify non-compete clauses?
  - ericmay 4y ago
    You are right, they do. But in practice it doesn't materialize. The other problem with "just create a union" besides the risk involved and inequality of bargaining power in starting a union in the first place is that you typically create a bureaucratic institution which has its own drag on economic efficiency. Banning non-competes has no clear downside, but does have clear upside. It makes sense to allow workers to form unions and to also ban non-competes.
    - bumby 4y ago
      Those are all good points. I would probably push back on the idea that economic efficiency is treated as an end to itself, rather than a means to an end. There's a tipping point where increased economic efficiency isn't necessarily a net good for society overall. I think part of me just laments the fact that previous generations took a much bigger risk to form unions and modern generations have largely let it fall to the wayside.
      - ericmay 4y ago
        I would agree that treating economic efficiency as an end to itself isn't ideal - that creates lots of obvious problems. It's probably super efficient to have child labor, for example. > I think part of me just laments the fact that previous generations took a much bigger risk to form unions and modern generations have largely let it fall to the wayside. I agree, and it's frustrating not just here but in the political realm as well. I think the Greatest Generation came back from the war and took hold of, and created instutitions: universities, the FDA, the CDC, the FAA, the MacArthur Foundation (just a random thing that came to mind), and importantly unions that protected workers rights and living standards. In the political realm I recently volunteered as a poll worker - it was a ton of fun, truth be told albeit a long day. But many people, friends, family, etc. thought it was a bit weird. We can't have nice things if we don't take care of them or do the hard work of democracy (or unionization, or maintaining valuable institutions) if we don't actually do it. I'm not sure where this apathy and angst crept in, but I bet suburbanization and social media helped create and subsequently accelerate it to the point where we have some serious problems that need to be addressed.
benrbray 4y ago
They should be legal, but expensive. If it is so valuable to companies that their workers not leave to work for competitors, they should be required to pay 100% salary for the non-compete period.
- Conan_Kudo 4y ago
  I think Maryland does this?
  - gusgus01 4y ago
    There are a lot of requirements that need to be met to make non-competes enforceable in MD, eg must meet salary bar, geographic location and duration must be specified, etc. But I don't think it requires paying the employee during the non-compete time.
- simplotek 4y ago
  > they should be required to pay 100% salary for the non-compete period. I'd argue that falls way short of being useful and still screws over employees. People switch jobs because they get better offers, and being forced to not only forego better offers but also get stuck with the same income while your offers get taken away from you hardly seems something that's in the worker's interests. In fact, it looks an awful lot like plain old unemployment benefits.
  - Moissanite 4y ago
    How about: If you get a written offer from company B while working for company A under a non-compete, A must either: - Allow you to leave unopposed - Keep you in your current role by negotiating a more attractive offer - Pay the value of offer B to put you on gardening leave for the non-compete period or 12 months, whichever is longer, and also compensate B for their recruitment costs Would never happen, but it would be amusing to watch CEOs pitch a fit about it on Twitter.
cryptonym 4y ago
Depends on your definition of "free". Market that favour free competition between economic actors? > No one telling anyone what to do. Sounds like a good way to get mafia.
starwind 4y ago
Upvoting cause I agree in principal with where you're coming from in the sense that employers and employees should be able to bargain in their contracts and include clauses like non-competes as long as they square with the public policy of the state. My issue (and probably yours) is the way non-competes get handled by employers * Every non-compete I've signed has been sprung on me while filing out paperwork on my first day. What am I supposed to? Walk out and be unemployed while I look for a new job? * What do I actually get for a non-compete clause? Judges routinely rule that continued employment is enough consideration for near-anything including non-competes. But if some companies don't have non-competes, to me that isn't true consideration. Me signing a non-compete that isn't worded in this-for-that like standard contract clauses should be should be treated as a gift on my part by the courts that can be revoked * Many states have restrictions on non-competes but most non-competes for national companies are boilerplate and often too broad. Combine this with a mandatory arbitration agreement and employers are doing an end-run around state labor laws either through arbitration or just strong arming employees
rubyn00bie 4y ago
No. Well at least in capitalism, that is a big no. There are no barriers to entry or exit the market in "real" capitalism (which no one has or has seen). This includes non-competes as it does any other barriers which distort the market. But none of that matters when most people still don't understand profit vs economic profit.
bastardoperator 4y ago
The market isn't free if you're not allowed to work/compete in it.
Klinky 4y ago
I agree, absolute freedom doesn't mean a desirable outcome will occur for individuals or society, or that freedom even remains the defacto standard. Free markets are often a vacuum waiting for a bully to fill & exploit.
a4isms 4y ago
> the free market ideal I don't think that's the free market ideal. Let's switch away from employers vs. employees and ask, "Would an ideal free market allow companies to collude to fix prices? Would an ideal free market allow consortiums of companies to set up exclusivity contracts with vendors to block competition from entering the market? Would an ideal free market allow companies with profits in a monopoly to run other businesses at a steep loss to prevent competition?" "Freedom from regulations" is a very thorny problem, it rarely leads to what people imagine are "free" markets.
AlexandrB 4y ago
> It seems like the free market ideal would be to allow them and if people didn't like them they wouldn't sign them. This only works with a robust social safety net where a worker can have no job and still be ok. Otherwise you're usually going to be choosing the lesser of several evils when it comes to employment contracts.
simplotek 4y ago
> It seems like the free market ideal would be to allow them and if people didn't like them they wouldn't sign them. No one telling anyone what to do. I’ve grown to learn that arguments on labour markets and free market ideals tend to be very simplistic and, knowingly or not, always boil down to victim blaming. When we’ve unemployed and actively looking for a job, if we have bills to pay and our budget is tight, our goal is to get a source of income as soon as possible. Consequently, we are vulnerable for unscrupulous conditions, such as non-competes. This does not mean that the job market finds them acceptable or encourages them. It just means employees that push these abusive conditions upon their new hires are abusing their dominant position to exploit workers, specially those in vulnerable positions.
jpadkins 4y ago
One confounding factor: In a true free market(tm), limited liability corporations wouldn't exist in their current form. So employers can be a lot larger, and gain more bargaining power over employees because of a government intervention that protects corporation owners from liability. It's hard to be a true free market libertarian when the initial conditions aren't really that free...

by donatj 4y ago

bern4444 4y ago

No, individuals have far less market power than institutions and businesses. Especially since health care is tied to employment. It's a privileged position if you can 'just say no' to a company that has non compete clauses - the majority of workers cannot.

horsawlarway 4y ago

https://en.wikipedia.org/wiki/Inequality_of_bargaining_power https://en.wikipedia.org/wiki/Inequality_of_bargaining_power The idea is well known for hundreds of years, but here's a particularly salient quote for your line of thinking. ---- "In so far as the reduction of costs of production and distribution thus achieved is reflected in reduced prices, society as a whole ultimately benefits from the use of standard contracts… The use of contracts has, however, another aspect which has become increasingly important. Standard contracts are typically used by enterprises with strong bargaining power. The weaker party, in need of the goods or services, is frequently not in a position to shop around for better terms, either because the author of the standard contract has a monopoly (natural or artificial) or because all competitors use the same clauses. His contractual intention is but a subjection more or less voluntary to terms dictated by the stronger party, terms whose consequences are often understood only in a vague way, if at all." F Kessler, ‘Contracts of Adhesion--Some thoughts about Freedom of Contract’

bumby 4y ago
Workers have mechanisms to balance that power. E.g., forming a union, which could ensure the contract is more fair. I don't know what to make of the fact that they don't use them. In your opinion, is there a reason why something like a union couldn't be used to negate or modify non-compete clauses?
- ericmay 4y ago
  You are right, they do. But in practice it doesn't materialize. The other problem with "just create a union" besides the risk involved and inequality of bargaining power in starting a union in the first place is that you typically create a bureaucratic institution which has its own drag on economic efficiency. Banning non-competes has no clear downside, but does have clear upside. It makes sense to allow workers to form unions and to also ban non-competes.
  - bumby 4y ago
    Those are all good points. I would probably push back on the idea that economic efficiency is treated as an end to itself, rather than a means to an end. There's a tipping point where increased economic efficiency isn't necessarily a net good for society overall. I think part of me just laments the fact that previous generations took a much bigger risk to form unions and modern generations have largely let it fall to the wayside.
    - ericmay 4y ago
      I would agree that treating economic efficiency as an end to itself isn't ideal - that creates lots of obvious problems. It's probably super efficient to have child labor, for example. > I think part of me just laments the fact that previous generations took a much bigger risk to form unions and modern generations have largely let it fall to the wayside. I agree, and it's frustrating not just here but in the political realm as well. I think the Greatest Generation came back from the war and took hold of, and created instutitions: universities, the FDA, the CDC, the FAA, the MacArthur Foundation (just a random thing that came to mind), and importantly unions that protected workers rights and living standards. In the political realm I recently volunteered as a poll worker - it was a ton of fun, truth be told albeit a long day. But many people, friends, family, etc. thought it was a bit weird. We can't have nice things if we don't take care of them or do the hard work of democracy (or unionization, or maintaining valuable institutions) if we don't actually do it. I'm not sure where this apathy and angst crept in, but I bet suburbanization and social media helped create and subsequently accelerate it to the point where we have some serious problems that need to be addressed.

benrbray 4y ago

They should be legal, but expensive. If it is so valuable to companies that their workers not leave to work for competitors, they should be required to pay 100% salary for the non-compete period.

Conan_Kudo 4y ago
I think Maryland does this?
- gusgus01 4y ago
  There are a lot of requirements that need to be met to make non-competes enforceable in MD, eg must meet salary bar, geographic location and duration must be specified, etc. But I don't think it requires paying the employee during the non-compete time.
simplotek 4y ago
> they should be required to pay 100% salary for the non-compete period. I'd argue that falls way short of being useful and still screws over employees. People switch jobs because they get better offers, and being forced to not only forego better offers but also get stuck with the same income while your offers get taken away from you hardly seems something that's in the worker's interests. In fact, it looks an awful lot like plain old unemployment benefits.
- Moissanite 4y ago
  How about: If you get a written offer from company B while working for company A under a non-compete, A must either: - Allow you to leave unopposed - Keep you in your current role by negotiating a more attractive offer - Pay the value of offer B to put you on gardening leave for the non-compete period or 12 months, whichever is longer, and also compensate B for their recruitment costs Would never happen, but it would be amusing to watch CEOs pitch a fit about it on Twitter.

cryptonym 4y ago

Depends on your definition of "free". Market that favour free competition between economic actors? > No one telling anyone what to do. Sounds like a good way to get mafia.

starwind 4y ago

Upvoting cause I agree in principal with where you're coming from in the sense that employers and employees should be able to bargain in their contracts and include clauses like non-competes as long as they square with the public policy of the state. My issue (and probably yours) is the way non-competes get handled by employers * Every non-compete I've signed has been sprung on me while filing out paperwork on my first day. What am I supposed to? Walk out and be unemployed while I look for a new job? * What do I actually get for a non-compete clause? Judges routinely rule that continued employment is enough consideration for near-anything including non-competes. But if some companies don't have non-competes, to me that isn't true consideration. Me signing a non-compete that isn't worded in this-for-that like standard contract clauses should be should be treated as a gift on my part by the courts that can be revoked * Many states have restrictions on non-competes but most non-competes for national companies are boilerplate and often too broad. Combine this with a mandatory arbitration agreement and employers are doing an end-run around state labor laws either through arbitration or just strong arming employees

rubyn00bie 4y ago

No. Well at least in capitalism, that is a big no. There are no barriers to entry or exit the market in "real" capitalism (which no one has or has seen). This includes non-competes as it does any other barriers which distort the market. But none of that matters when most people still don't understand profit vs economic profit.

bastardoperator 4y ago

The market isn't free if you're not allowed to work/compete in it.

Klinky 4y ago

I agree, absolute freedom doesn't mean a desirable outcome will occur for individuals or society, or that freedom even remains the defacto standard. Free markets are often a vacuum waiting for a bully to fill & exploit.

a4isms 4y ago

> the free market ideal I don't think that's the free market ideal. Let's switch away from employers vs. employees and ask, "Would an ideal free market allow companies to collude to fix prices? Would an ideal free market allow consortiums of companies to set up exclusivity contracts with vendors to block competition from entering the market? Would an ideal free market allow companies with profits in a monopoly to run other businesses at a steep loss to prevent competition?" "Freedom from regulations" is a very thorny problem, it rarely leads to what people imagine are "free" markets.

AlexandrB 4y ago

> It seems like the free market ideal would be to allow them and if people didn't like them they wouldn't sign them. This only works with a robust social safety net where a worker can have no job and still be ok. Otherwise you're usually going to be choosing the lesser of several evils when it comes to employment contracts.

simplotek 4y ago

> It seems like the free market ideal would be to allow them and if people didn't like them they wouldn't sign them. No one telling anyone what to do. I’ve grown to learn that arguments on labour markets and free market ideals tend to be very simplistic and, knowingly or not, always boil down to victim blaming. When we’ve unemployed and actively looking for a job, if we have bills to pay and our budget is tight, our goal is to get a source of income as soon as possible. Consequently, we are vulnerable for unscrupulous conditions, such as non-competes. This does not mean that the job market finds them acceptable or encourages them. It just means employees that push these abusive conditions upon their new hires are abusing their dominant position to exploit workers, specially those in vulnerable positions.

jpadkins 4y ago

One confounding factor: In a true free market(tm), limited liability corporations wouldn't exist in their current form. So employers can be a lot larger, and gain more bargaining power over employees because of a government intervention that protects corporation owners from liability. It's hard to be a true free market libertarian when the initial conditions aren't really that free...