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In the instance this change doesn't go through it is important to be aware that non-competes don't survive hardship tests. There is an extreme burden on the em

• leoc 4y ago
  I'm not an expert, but IIUC the financial industry tends to pay full "garden leave" for employees serving out their noncompete terms https://en.wikipedia.org/wiki/Garden_leave https://en.wikipedia.org/wiki/Garden_leave , presumably partly for this reason.
  • sozin 4y ago
    This is correct — very common practice in trading (I am currently sitting out one now!). Generally they are 3-12 months in duration, although recently we are seeing much longer ones (24 months) from firms such as Citadel. You generally draw full base salary, and healthcare comes from COBRA. US-wide ban of non competes is good for hiring firms (they get the talent immediately), bad (allegedly) for firms from whom the talent is leaving, and mixed for the workers themselves (for whom the garden leave can be sometimes received as a paid sabbatical). It will be a really big change.
    • ghaff 4y ago
      And you highlight how allowing non-competes with garden leave is a mixed bag. If someone's fine with taking a year or two off while getting some fraction of the total compensation they were getting previously, I suppose it can look like a good deal. But that would be pretty unsatisfactory for a lot of people mid-career with kids in college.
      • leoc 4y ago
        IIUC we're generally talking about full base salary in the case of financial-industry "garden leave", though obviously missing out on the possibility of bonus payments could really sting for many in that business. And obviously being "out of the game" for a significant amount of time can hurt, especially if you're in an area where things are changing quickly.
        • lrem 4y ago
          From the offers I was getting back in the day, finance runs on low base salary and huge bonuses. Bonuses of 200% of the base salary are not unheard of. Full base salary can still mean quite a bit of pain.
    • AlotOfReading 4y ago
      Long-term garden leave is still unequal as you forfeit things like bonus (which can be a significant percentage of TC) and you can't practice the skills of your employment for months or years. Imagine going on leave from the financial sector in 2007 and coming back in 24 months later, for example.
      • mattkrause 4y ago
        New CV item: "Zero losses during the global financial crisis" :-)
        • leoc 4y ago
          Are you really a financial-industry veteran if you didn't tank at least one merchant bank when you had the opportunity? ;)
  • usefulcat 4y ago
    In the most recent contract I saw from a trading firm, they would only do this if they let you go, and not for cause. So for sure no "garden leave" if you quit, and also not if they can find a reason to fire you. And of course no bonus, which is often a majority of total comp. Possibly this sort of thing may vary by state. There might also be some room to negotiate depending on how much they want you.
  • etothepii 4y ago
    Though employees that typically receive such tend to have substantial variable elements to their compensation. 100%+ annual bonus for performance are not unusual and typically they are not paid during a period of garden leave.
• andrewjf 4y ago
  > be on the hook for continued compensation at some proportion of the employee's former wage to actually exercise the privilege to deny the employee work in a specific field Yes. The proportion should be 100%, plus all benefits (401k, health, continued vesting of equity, etc). If you're being denied future employment then the employer can pay for it if it's that important to them. Possibly even more than 100% if they're preventing me from going to a company with a substantial increase in pay.
  • cma 4y ago
    Ultimately that is still very anticompetitive, it just asks for more compensation to the worker but is still paying them to do nothing and hurting competition, a sure sign of a broken system (paying people to do nothing is usually a charged leveled at very broken bureaucracies).
    • andrewjf 4y ago
      For sure - I would like to see non-competes banned outright, of course. I was just replying to OP for implying that a worker should get a reduced (i.e. proportional) payout for being denied employment at a competitor. The "losing" employer should pay substantially for such a egregious act and the employee should benefit.
    • bobthepanda 4y ago
      This is already done at financial sectors in some countries, mostly to prevent immediate poaching of clients and transfers of strategies. In six months everything will be out of date.
  • Spivak 4y ago
    Which is why I think companies should have to “buy you out” in the event you get another job. If you get an offer and they want to exercise the non-compete they have to pay you total comp for that offer otherwise you can work there. I’m sure in a forum of devs you’ll will think of plenty obvious “hacks” which are just fraud and our courts are perfectly capable of sussing that out.
• akomtu 4y ago
  What courtroom? Such contracts always come with binding arbitration.
• candiddevmike 4y ago
  I'm trying to think of why the powers that be want this too, and the only thing I can think of is to expand their hiring pool/make poaching legal. Maybe I'm too cynical.
  • lotsofpulp 4y ago
    Requiring employers to allow employees to sell their labor to whoever they want is a good thing, in my opinion.
  • MereInterest 4y ago
    Option 1: The labor pool is a free market. This means that companies are free to choose who to hire, and workers are free to choose who to work for. Non-compete agreements prevent the latter, and so the market becomes inefficient. Option 2: The labor pool is a class struggle, in which employees exploit their workers. Non-compete agreements of a form of exploitation, tying a worker’s livelihood to a single employer. Option 3: Employees belong to the company they work for. Non-compete agreements codify this natural relationship. Hiring a different company’s employee is a form of theft, and is called “poaching”. Option 4: Any voluntary, informed contract is valid. Non-compete agreements are one such contract. Forbidding non-compete agreements is an unjust restriction. Under options 1 or 2, non-compete agreements are clearly unethical. Option 3 requires accepting an unethical premise. Option 4 requires stretching the terms “voluntary” and “informed” to apply to Morton’s Fork. I’d put the question another way: Given the negative effects of non-competes, why should they be allowed?
  • notfromhere 4y ago
    It's good for workers regardless of any cynical take. Non-competes put more burden on workers than it does on companies.
  • petsfed 4y ago
    Yes, but another way to look at it is that the volume of successful strikes of the last few years are making the powers-that-be sweat a bit. This feels like a sacrifice play to me. I'm sure that the cost of improving wages, hours, and benefits so as to retain staff is a lot less than improving all those things plus the overall cost to the business and/or economy of a strike.
• ghaff 4y ago
  >current chilling-effect bullshit of overly vague and broad non-competes that are never intended to see the inside of a courtroom I worked for a very small company for a number of years quite a while back. We basically wouldn't even look at someone who had a non-compete even if it "probably" wouldn't be an issue. The risk of having to fight some big tech company--who might also have been clients to some degree--was just too great.
  • etothepii 4y ago
    At what point in the hiring process did this come up. I assume you didn't ask to see new hires former contract and would you routinely ask, "are you subject to any non-competes?"
    • ghaff 4y ago
      As I recall, yes, our business office would routinely ask early in the process if they were subject to non-competes.
• idopmstuff 4y ago
  > In the instance this change doesn't go through it is important to be aware that non-competes don't survive hardship tests. This may be true in theory, but more often that not for the most vulnerable people it's not true in practice. The problem is that people have to be both aware that they can challenge a noncompete and willing to do so. That is, at a minimum, very time consuming, and if you're working a low-wage job, you probably aren't going to be practically able to fight a noncompete. If you get a new job and your old employer sends a threatening legal letter to your new employer, they're probably just going to fire you rather than help you fight it. If the system put the burden on the employer to prove that a noncompete was valid before making any attempts to enforce it, the current system might work well. Unfortunately, the reality is that even totally unenforceable noncompetes are still effective most of the time - that's one reason you still see them put into contracts in places where they have no chance of surviving a legal challenge.
  • lcnPylGDnU4H9OF 4y ago
    To add to this, I know a person who had a job offer rescinded because the company he was going to didn't like the potential of non-compete enforcement by the company he was leaving. It's fortunate that it can (sometimes) be challenged successfully but in many unfortunate instances that won't be an option. The best case from my perspective is that these contracts are simply voided.
  • tcmart14 4y ago
    Thats my understanding of non-competes. It is really for the company to win in a court case. Its a threat to scare people in complying because most people don't have the war chest to fight it out. For most people, you can fight it, but your gonna go bankrupt. So it is often better to just cave in. The company will just drag it out so it costs you the entire time. Its more of a competition of who has the bigger war chest and the employer is usually the one with it.