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FTC has proposed banning non-compete agreements
- greenyoda 4y agoBig discussion at the time: https://news.ycombinator.com/item?id=34260577 https://news.ycombinator.com/item?id=34260577 Big discussion of this exact document 5 days ago: https://news.ycombinator.com/item?id=34931362 https://news.ycombinator.com/item?id=34931362 And several other discussions too: https://hn.algolia.com/?dateRange=all&page=0&prefix=true&query=FTC%20non-compete&sort=byDate&type=story https://hn.algolia.com/?dateRange=all&page=0&prefix=true&que...
- kneebonian 4y agoSo here's the part I am most confused about. Why is it the FTC regulating this? And I don't mean that in a "they shouldn't be doing this way" but more of a "how the hell did we get so dysfunctional that some random agency responsible for stocks and markets end up being the one having to implement this?" Why isn't the bearu of labor or anyone else getting involved it seems like at this point random beaurecrats are the ones having to address things because the legislative framework has completely broken down.
- midoridensha 4y agoIt seems like random bureaucrats are the only people keeping the American government from completely imploding, because the legislators sure aren't doing their jobs.
- ddtaylor 4y agoWhile I agree with your sentiment that our legislative branch is very under-performing right now due mostly to two-party politics, all enforcement of law comes down to the executive and judicial branches, so this action in that context makes sense.
- Guthur 4y agoIs there not a way to use the common law system. If the common view is that these agreements are an undue encroachment upon and individuals right to use their time as they see fit, then the cases would be thrown out and potentially some legislature will ultimately be put in place?
- kube-system 4y agoNoncompetes have already been thoroughly tested by the court systems in the states where they are legal. When I left a job with one, I called a local lawyer specializing in employment law and they were able to tell me exactly what provisions a state court would and would not uphold.
- Gibbon1 4y agoMy take is the opposite, after 40 years of the FTC being leashed by one 'pro business' administration after another, Biden's unleashed the dogs. Scare quotes because leashing the FTC is really about allowing monopolies to rip off workers and consumers. Not about being pro business.
- wnevets 4y agoYou don't see how non-competes can affect trade?
- loeg 4y ago> some random agency responsible for stocks and markets end up being the one having to implement this The FTC's mandate is not "stocks and markets." Are you thinking of the SEC?
- moandcompany 4y ago"The FTC enforces federal consumer protection laws that prevent fraud, deception and unfair business practices. The Commission also enforces federal antitrust laws that prohibit anticompetitive mergers and other business practices that could lead to higher prices, fewer choices, or less innovation." https://www.ftc.gov/enforcement https://www.ftc.gov/enforcement "To foster, promote, and develop the welfare of the wage earners, job seekers, and retirees of the United States; improve working conditions; advance opportunities for profitable employment; and assure work-related benefits and rights." https://www.dol.gov/general/aboutdol https://www.dol.gov/general/aboutdol
- latency-guy2 4y agoSo it seems they have highly overlapping jurisdictions, question still stands though, why is the FTC particularly pushing this? Isn't it generally a good idea to compartmentalize agencies so they are not stepping on each others toes? I know this is still a problem between the FBI, CIA, DEA, ATF, etc., we know these agencies in particular had a huge historical problem with secrecy amongst themselves, even on the same programs Private corps are also not innocent of this, many companies are famously competing against each other internally, both in the literal sense by subsidiaries and like that org chart for MSFT.
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- ddtaylor 4y agoWork is the trade of labor for money.
- burnished 4y agoGood question, not worthy of the downvotes. I didnt know either and if you didnt ask that person that answered helpfully would not have done that
- patrickscoleman 4y agoI knew a 23-year old customer success rep who had a non-compete enforced against her. She’d been with the company for less than a year and had no “trade secrets” or clients that she’d take with her. The company really tried to scare her too. Without a ban, these are gonna get enforced in ridiculous situations.
- whamlastxmas 4y agoI’ve had an employer that forced me to sign one that was blatantly incompatible with state laws. I signed it knowing it meant nothing because I needed the job at the time.
- mypalmike 4y agoYeah I brought an employment contract to a lawyer once and they told me to sign it because most of it had been written with references to the laws of a different state (the company had moved HQ recently), making most of it unenforceable.
- chaostheory 4y agoIf this passes, California (especially the SF Bay Area) will lose one of its biggest advantages. It’s already been losing it’s nice climate over the years.
- radley 4y agoCalifornia has already said non-competes are unenforceable: 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...
- dragonwriter 4y agoThe theory of California losing an advantage is that California’s stance on noncompetes is an advantage, that it would lose if it were the national rule.
- deathanatos 4y agoIf I read them charitably, maybe it's a "CA has a competitive advantage by having saner labor protections", an advantage which would be lost (relatively) as everyone in the nation would get it. …which … great!
- paxys 4y agoThat's their point. Non-competes being unenforceable is the biggest advantage California has over every other state that has been trying to set up their own "silicon valley" for the last N decades. If the law is forced on them, they might actually succeed.
- mindvirus 4y agoIt feels like simple regulation could just be: - non-competes must be paid at the max of your past 3 years earnings, including benefits. - minimum $100k/year. - maximum 12 months. Assuming companies need to enforce them, they'll have a mechanism to (this is similar to what hedge funds do).
- KRAKRISMOTT 4y ago- tied to inflation
- wahnfrieden 4y agowhy advocate for allowing them? what's in it for workers?
- eftychis 4y agoYeah I agree. Why even allow them at all?
- bmitc 4y agoI think allowing them but forcing companies to pay is a way to make them put their money where their mouth is. While I think removing them is good, removing them completely gives the opposing crowd something to yell about. If you allow them but then say, well you gotta pay to get the benefit, I think we'd quickly see them drop off, the proponents of non-competes would have little to no argument, and companies who really think they need them can just pay for them if they're so valuable to their business strategy.
- a_techwriter_00 4y agoIf history's any indication, you can't give companies an inch. They'll take advantage of employee ignorance of the law, or do shady things with the payments under the logic that if the employee sues them for the money they can tie the case up in the legal system until they give up, or whatever other chicanery they can imagine to squirm out of having to pay.
- thrdbndndn 4y agoJust curious: assuming this passed, how would companies circumvent? While I think it's totally bullshit to have for most of jobs, I can see it's still "needed" for some niche professions.
- jfim 4y agoThe finance industry does garden leave for example: https://en.m.wikipedia.org/wiki/Garden_leave https://en.m.wikipedia.org/wiki/Garden_leave
- zdragnar 4y agoThey try to get charges pressed under the Economic Espionage Act, and may file civil suit as well against former employees they believe have taken or are using protected information, trade secrets or clients. "Non-compete" agreements are the civilized version that keeps everyone out of courtrooms, though the obvious abuse of the concept is itself causing legal drama, having been applied as a blanket policy rather than judiciously for select positions.
- drannex 4y agoGood. Noncompetes stifle innovation, entrepreneurship, and advancements in technology and ideas.
- hackernewds 4y agoThere are arguments to be made for quite the opposite. Think of non-competes as patents. What prevents an adversarial company or national state from sending recruits to a competitor?
- blindriver 4y agoI simply don't care. I don't want a law that penalizes everyone just so that a company has an advantage. All companies are on equal footing by getting rid of non-competes.
- cosban 4y agoI'm in agreement with this and would also like to point out that Non-Disclosure Agreements can still exist in absence Non-Compete Agreements.
- lakecresva 4y agoThe entirety of IP law. I don't have to think of non-competes as patents or a way of protecting trade secrets, because patents and trade secrets have their own separate (and quite potent) legal protections.
- whamlastxmas 4y agoPay people enough that they wouldn’t be incentivized to do this and they won’t. Instead we have trillion dollar corporations lobbying for laws to make free markets of labor illegal
- gnulinux 4y agoPatents stifle innovation too.
- bagels 4y ago
- greatpostman 4y agoAnyone know what this means for non disclosure agreements?
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- monksy 4y agoUnrelated. NCs have nothing to do with NDAs.
- yathaid 4y agoMatt Stoller has written extensively on this topic: - https://mattstoller.substack.com/p/antitrust-enforcers-to-ban-indentured https://mattstoller.substack.com/p/antitrust-enforcers-to-ba... - https://mattstoller.substack.com/p/non-compete-agreements-and-the-cult https://mattstoller.substack.com/p/non-compete-agreements-an...
- nimish 4y agoCalifornia has banned non competes for just over 150 years. Any "bad for business" opposition to this rule would be interesting to see.
- charcircuit 4y agoThis still allows for noncompetes that prevent you from for example working at AWS, Azure, and Google Cloud at the same time.
- can16358p 4y agoSo FTC can, albeit rarely, do good things. Nice. Hope this gets into effect immediately.
- thepasswordis 4y agoI think you should be able to take clients. I want to see companies competing on product. An employee shouldn’t be able to take clients anywhere if the product isn’t better.
- willcipriano 4y agoI agree, some may argue that knowing what a customer currently pays is inside information that gives you a unfair advantage when putting together a bid, but most of them also wouldn't hesitate to use a service like The Work Number[0] to low ball employees they hire in exactly the same manner. [0]https://en.m.wikipedia.org/wiki/The_Work_Number https://en.m.wikipedia.org/wiki/The_Work_Number
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- paxys 4y agoLet me predict the next 3 years: FTC will pass some watered down version of the law. Big corporations will throw a fit and lobby Republican states to fight it. Republican states' AGs will sue the government to block it. Lower courts will side with the government. Case will go up to the Supreme Court. Law will be overturned in a 5-4 verdict.