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This is a big deal. There are many niche industries (ex. Tire manufacturing) absolutely choked by non-compete agreements which force engineers to completely exi

This is a big deal. There are many niche industries (ex. Tire manufacturing) absolutely choked by non-compete agreements which force engineers to completely exit their field just to be able to advance their salary or career. This also was a huge barrier to new entrants because all the industry experts are locked up with non-competes. I've also seen these heavily used in the medical industry to lock up prevent medical professionals from moving to a competing hospital. people on work visas were especially hard hit because they can't just move to something outside their field of study. Hopefully this leads to a more competitive landscape and gives some leverage back to the employee.

mjevans 3y ago
IMO Non-competes should be a contract for a 'lengthy' severance pay period. It keeps the former employee out of the market, so the duration of the NC contract should be paid for at or above the normal rate of compensation + benefits. Depending on how it's booked for taxes / etc, E.G. if it's "You have to 'work' for us, and no one else, but on mandatory vacation, for X months, we'll pay you in full like that; and also do federal taxes etc." Otherwise they clearly only provide damage to the employee and 'value' in extortion of that damage to the 'employer'.
- deleted 3y ago
  [deleted]
- benatkin 3y ago
  I'm glad that's not the opinion the NLRB arrived at. It's an excuse to limit individual freedom. Plenty of other times excuses to limit individual freedom turned out to not be very good.
- dataflow 3y ago
  No. What you're proposing only partially addresses one aspect of the issue: the financial fairness to the (no-longer-)employee. It actually doesn't even manage to do that very well -- because employees can't advance their careers, learn new skills, and get promotions/raises when they're unemployed. So they're still falling behind compared to someone who is employed. Beyond that, it fails to account for all the other harms of non-competes -- such as the emotional toll it takes on that person (having no work to do is not something everyone considers a blessing at every point in their life), as well as the damage it inflicts on the rest of society as a whole.
  - kodah 3y ago
    > because employees can't advance their careers, learn new skills, and get promotions/raises when they're unemployed I think an employee could, just not in that industry. In software that's relatively easy, I switch between two different fields and industries every other job. I'd be curious about adjacent fields for engineers working on tires like in GPs example.
  - bitwize 3y ago
    I think meaningful work is at least as important to the brain as Omega-3s. My father started experiencing memory issues after retiring, but then he took up some part-time engineering contract work and the memory issues went away. My mother sank into deep depression after retiring... and not long after that, the dementia started setting in.
    - nine_k 3y ago
      It's so much easier to find an occupation that consumes your mental energy if you don't have to think about earning money for some time!
  - vegetablepotpie 3y ago
    I think the whole point is to call the bluff. If it’s really valuable IP that they protecting with a non-compete, then it would be worth it to pay someone a mandatory vacation upon leaving. But how often are non-compete clauses really meant to protect IP? Most of the time it’s a tool to depress wages, they know it, we know it, they know we know it. No one is being fooled here that’s all it is. If you put a price on non-competes, they will go away.
    - JohnFen 3y ago
      > But how often are non-compete clauses really meant to protect IP? I would venture never. Or nearly never. A noncompete is a terrible way to protect IP.
    - dataflow 3y ago
      > If you put a price on non-competes, they will go away. Unless they calculate that competition would have a higher price, in which case, they might not go away for everyone.
- anon291 3y ago
  That is what they are. If a non compete contract has no monetary consideration, it is virtually unenforceable. Our business law professor in college told us very clearly to simply ignore any non compete and she was general counsel at several major firms. No one is going to waste their time on enforcement. It's all about making the employees scared witless.
  - ThrustVectoring 3y ago
    "Not enforceable at trial" isn't the same thing as "they aren't going to send your new employer a nastygram that leads to getting fired after legal does a risk/reward analysis and decides to fill your role with the next available candidate"
  - occz 3y ago
    Non-enforceability is not sufficient in this case, it needs to be prohibited under threat of harsh fines to add them to contracts in the first place. Businesses know that the clauses are unenforceable, but since they are free to add them and they have some real impact - people not aware of their unenforceability may change their behaviour because of the existence of the clauses, and the threat of a lawsuit for any party involved is going to be a chilling factor in any case. Time to make the cost of adding the clauses not free, to address the root cause.
- gadders 3y ago
  This is what happens in banking. You get 3 months or so paid "gardening leave" if you go to work for a competitor to prevent you starting straight away at a rival institution.
- toth 3y ago
  FYI, in all jurisdictions I know of, this is already the case. I.e., a non-compete period in which you are not paid to a level commensurate to what you got before is not enforceable. If employers try to enforce them in court, they will lose. Source: had a non-compete clause in employment contract that had no mention of any pay during period. Employer initially did not want to pay me anything during period. Hired some lawyers and they paid 100% of my salary during that period. All the lawyers did was write some letters, never had to go to court.
  - matwood 3y ago
    Correct. The problem, as with many things in the employee/employer relationship, is the power imbalance. Simply the threat puts fear into the employee because of the potential time and expense to fight. Unless someone is a high level employee and/or leaves under bad terms, most companies just drop the issue if pushed.
anon291 3y ago
No state enforces non competes that endanger someone's ability to work in their profession unless the company provides compensation during the unemployment period.
- eschaton 3y ago
  Incorrect, in a practical sense: If you would win after fully litigating the non-compete, but doing so would cost millions of dollars, whether or not the state is considered to be enforcing it is a distinction without a difference.
  - kleton 3y ago
    Could that be considered tortious interference now?
    - eschaton 3y ago
      If you countersue a former employer that is suing you to enforce a non-compete agreement, that would probably be a significant element of the countersuit, yes. Hope you have the funds to see that through to completion including all the appeals! It’s not like tortious interference is a crime the state would prosecute—just like violating a non-compete isn’t a crime where the state would prosecute. Civil actions are handled via lawsuits and they’re expensive.
  - anon291 3y ago
    Realistically, I would find a lawyer to work for the certain pay out No state in the country will force a worker onto unemployment in order to enforce a private party's non compete. None.
    - eschaton 3y ago
      Look into the case law. It happens. And what “certain pay out?” The company sues the former employee, if the employee wins they get to keep their job, effectively making that job cost millions. The employee would have to countersue, and that would carry quite a lot of risk of failure even if the employee wins the original suit.

mjevans 3y ago

IMO Non-competes should be a contract for a 'lengthy' severance pay period. It keeps the former employee out of the market, so the duration of the NC contract should be paid for at or above the normal rate of compensation + benefits. Depending on how it's booked for taxes / etc, E.G. if it's "You have to 'work' for us, and no one else, but on mandatory vacation, for X months, we'll pay you in full like that; and also do federal taxes etc." Otherwise they clearly only provide damage to the employee and 'value' in extortion of that damage to the 'employer'.

deleted 3y ago
[deleted]
benatkin 3y ago
I'm glad that's not the opinion the NLRB arrived at. It's an excuse to limit individual freedom. Plenty of other times excuses to limit individual freedom turned out to not be very good.
dataflow 3y ago
No. What you're proposing only partially addresses one aspect of the issue: the financial fairness to the (no-longer-)employee. It actually doesn't even manage to do that very well -- because employees can't advance their careers, learn new skills, and get promotions/raises when they're unemployed. So they're still falling behind compared to someone who is employed. Beyond that, it fails to account for all the other harms of non-competes -- such as the emotional toll it takes on that person (having no work to do is not something everyone considers a blessing at every point in their life), as well as the damage it inflicts on the rest of society as a whole.
- kodah 3y ago
  > because employees can't advance their careers, learn new skills, and get promotions/raises when they're unemployed I think an employee could, just not in that industry. In software that's relatively easy, I switch between two different fields and industries every other job. I'd be curious about adjacent fields for engineers working on tires like in GPs example.
- bitwize 3y ago
  I think meaningful work is at least as important to the brain as Omega-3s. My father started experiencing memory issues after retiring, but then he took up some part-time engineering contract work and the memory issues went away. My mother sank into deep depression after retiring... and not long after that, the dementia started setting in.
  - nine_k 3y ago
    It's so much easier to find an occupation that consumes your mental energy if you don't have to think about earning money for some time!
- vegetablepotpie 3y ago
  I think the whole point is to call the bluff. If it’s really valuable IP that they protecting with a non-compete, then it would be worth it to pay someone a mandatory vacation upon leaving. But how often are non-compete clauses really meant to protect IP? Most of the time it’s a tool to depress wages, they know it, we know it, they know we know it. No one is being fooled here that’s all it is. If you put a price on non-competes, they will go away.
  - JohnFen 3y ago
    > But how often are non-compete clauses really meant to protect IP? I would venture never. Or nearly never. A noncompete is a terrible way to protect IP.
  - dataflow 3y ago
    > If you put a price on non-competes, they will go away. Unless they calculate that competition would have a higher price, in which case, they might not go away for everyone.
anon291 3y ago
That is what they are. If a non compete contract has no monetary consideration, it is virtually unenforceable. Our business law professor in college told us very clearly to simply ignore any non compete and she was general counsel at several major firms. No one is going to waste their time on enforcement. It's all about making the employees scared witless.
- ThrustVectoring 3y ago
  "Not enforceable at trial" isn't the same thing as "they aren't going to send your new employer a nastygram that leads to getting fired after legal does a risk/reward analysis and decides to fill your role with the next available candidate"
- occz 3y ago
  Non-enforceability is not sufficient in this case, it needs to be prohibited under threat of harsh fines to add them to contracts in the first place. Businesses know that the clauses are unenforceable, but since they are free to add them and they have some real impact - people not aware of their unenforceability may change their behaviour because of the existence of the clauses, and the threat of a lawsuit for any party involved is going to be a chilling factor in any case. Time to make the cost of adding the clauses not free, to address the root cause.
gadders 3y ago
This is what happens in banking. You get 3 months or so paid "gardening leave" if you go to work for a competitor to prevent you starting straight away at a rival institution.
toth 3y ago
FYI, in all jurisdictions I know of, this is already the case. I.e., a non-compete period in which you are not paid to a level commensurate to what you got before is not enforceable. If employers try to enforce them in court, they will lose. Source: had a non-compete clause in employment contract that had no mention of any pay during period. Employer initially did not want to pay me anything during period. Hired some lawyers and they paid 100% of my salary during that period. All the lawyers did was write some letters, never had to go to court.
- matwood 3y ago
  Correct. The problem, as with many things in the employee/employer relationship, is the power imbalance. Simply the threat puts fear into the employee because of the potential time and expense to fight. Unless someone is a high level employee and/or leaves under bad terms, most companies just drop the issue if pushed.

anon291 3y ago

No state enforces non competes that endanger someone's ability to work in their profession unless the company provides compensation during the unemployment period.

eschaton 3y ago
Incorrect, in a practical sense: If you would win after fully litigating the non-compete, but doing so would cost millions of dollars, whether or not the state is considered to be enforcing it is a distinction without a difference.
- kleton 3y ago
  Could that be considered tortious interference now?
  - eschaton 3y ago
    If you countersue a former employer that is suing you to enforce a non-compete agreement, that would probably be a significant element of the countersuit, yes. Hope you have the funds to see that through to completion including all the appeals! It’s not like tortious interference is a crime the state would prosecute—just like violating a non-compete isn’t a crime where the state would prosecute. Civil actions are handled via lawsuits and they’re expensive.
- anon291 3y ago
  Realistically, I would find a lawyer to work for the certain pay out No state in the country will force a worker onto unemployment in order to enforce a private party's non compete. None.
  - eschaton 3y ago
    Look into the case law. It happens. And what “certain pay out?” The company sues the former employee, if the employee wins they get to keep their job, effectively making that job cost millions. The employee would have to countersue, and that would carry quite a lot of risk of failure even if the employee wins the original suit.