16 ms·

New York State Senate passes prohibitions on non-competes

803 points by hhs 3y ago

mr_00ff00 3y ago
I am a junior dev hired to an HFT firm. I was excited to have 6 months of free pay just to not work :(
- pc86 3y ago
  That's not how non-competes work.
  - cbg0 3y ago
    It is in Europe.
  - blerud 3y ago
    It is at many HFT firms, including mine. You will be paid your base salary for some number of months to not work at a competitor, even if you don't have a signed offer for a competitor and just want to sit around
    - chimeracoder 3y ago
      > It is at many HFT firms, including mine. You will be paid your base salary for some number of months to not work at a competitor, even if you don't have a signed offer for a competitor and just want to sit around That's called "garden leave" and it's completely different from non-compete agreements as discussed by this bill.
      - pclmulqdq 3y ago
        "Garden leave" wasn't a common term when I was in HFT in NYC. It was just called a "non-compete" (possibly confusingly).
        ghaff 3y ago
        Garden leave is just a (usually?) legal (or at least contractual) requirement associated with non-compete agreements in some jurisdictions. Unsurprisingly, it was originally a British term, although it meant something different.
        pclmulqdq 3y ago
        Personally, the only time I ever heard it was from the mouths of British recruiters.
        chimeracoder 3y ago
        > "Garden leave" wasn't a common term when I was in HFT in NYC. It was just called a "non-compete" (possibly confusingly). The terms are used somewhat interchangeably in colloquial use, because (at least as of now) the distinction isn't meaningful for most people. The point is that garden leave isn't targeted by this bill.
        frankc 3y ago
        I don't think that is true, or at least I have not seen that anywhere. My understanding is this bill removes any kind of non-competes. It was already basically unenforcible to have an unpaid non-compete in New York (through common law)
        chimeracoder 3y ago
        > It was already basically unenforcible to have an unpaid non-compete in New York (through common law) That is not true - there are four criteria for non-competes to be valid in NY, and payment for the duration is not one of them. > I don't think that is true, or at least I have not seen that anywhere. My understanding is this bill removes any kind of non-competes. There are two bills - one of them requires payment for noncompetes.
        delfinom 3y ago
        The first bill outlaws all non-competes and garden leave would fall under it. The most they could do is offer it as a form of severance where you get to sit on your butt for 6 months conditionally. The second bill would allow for garden leave aka compensated non-competes. It just codifies the "don't try any non-compensated/good faith aspect".
      - masklinn 3y ago
        A garden leave is a form of compensated non-compete. The entire point is that you’re paying a former employee to not compete (in this case to literally not work).
  - bshipp 3y ago
    If companies actually paid employees not to compete they would be able to keep them. Correct me if I'm wrong, but--at least where I live--non-competes lack legal authority (even before they were outlawed) because most companies don't provide compensation for limiting an ex-employee's ability to make a living in their field in the future. So, it's conceivable that an ex-employee could receive 6 months severance in trade for a non-compete of that length, but I doubt it's very popular.
    - slymon99 3y ago
      > If companies actually paid employees not to compete they would be able to keep them Why is this true? If someone is making $200k and leaving to make $350k, an employer may well be able to afford the $100k for 6 months to prevent them from immediately handing over IP, but not be able to match the $350k their new employer is offering. > So, it's conceivable that an ex-employee could receive 6 months severance in trade for a non-compete of that length, but I doubt it's very popular. It's quite popular in finance. Also, it's not a one time severance, its paid as a standard paycheck. A firm might "release" someone from their non compete while it is still active (basically saying it's no longer active and we are no longer paying you).
      - ghaff 3y ago
        And there are a ton of other reasons people change companies as well. >an employer may well be able to afford the $100k for 6 months to prevent them from immediately handing over IP Presumably there are other restrictions to just handing over IP but at least some of the reasoning for non-competes is that you can't really restrict the transfer of a lot of know-how even if they don't share corporate strategy decks.
      - bshipp 3y ago
        > Why is this true? If someone is making $200k and leaving to make $350k, an employer may well be able to afford the $100k for 6 months to prevent them from immediately handing over IP, but not be able to match the $350k their new employer is offering. Sorry, I worded that poorly. I meant companies could keep the ability to impose non-competes if they originally compensated employees who were let go. I know it gets muddled when it comes to employees moving around for increased pay, but non-competes aren't supposed to be a mechanism for holding down salaries. They're only intended to protect vital corporate secrets that, if they were released, would be so costly to the company that they'd risk bankruptcy. The value of those secrets would likely be enough that many competitors would be hesitant to hire those employees because they might fear opening themselves up to future litigation for patent infringement or IP or whatnot. The fact that many HR departments apply them to every single rank and file employee and don't explicitly define what constitutes a direct competitor or what explicit activities/information are protected by the NC is why they're a pretty useless legal tool in most circumstances.
  - d_watt 3y ago
    It can be https://en.wikipedia.org/wiki/Garden_leave https://en.wikipedia.org/wiki/Garden_leave
  - mywittyname 3y ago
    If a company wants to actually enforce a non-compete, then it can't be one-sided.
- nburr 3y ago
  Not at all how NCAs work in NYS or the US in general.
  - deleted 3y ago
    [deleted]
- xilni 3y ago
  Garden leave is a different beast and seems fair, you and the employer each get something, non competes on the other hand do not usually offer anything to the employee.
  - ghaff 3y ago
    Many garden leaves as a condition of having a non-compete aren't a great deal though. I think the fairly recent Massachusetts law is 50% pay--and that may be of just base pay. It might be a good deal if you want to travel in your twenties. It may not be such a great deal if you have a mortgage to pay and family to support and you're basically pressing pause on your career. It does make the company put skin in the game but if they decide to enforce anyway, it's better than nothing but hardly a panacea.
  - esoterica 3y ago
    Paid non competes are also banned under the proposed law (and currently banned in California).
- twunde 3y ago
  Most companies do not pay for the period of time that a non-compete is in effect. What you're describing is somewhat different. Typically that's known as garden leave, and essentially you're treated as a current employee for the period of time, but you're not allowed to work. Which means that you'll likely have the 6 months of free pay. I'd definitely review your contract and the terms.
  - doikor 3y ago
    Thankfully here in Finland non-competes are void if you are not paid. Basically the right to earn a living wins over any contract you could sign against it.
    - moffkalast 3y ago
      Didn't the EU ban non-compete clauses entirely recently anyway? Or did the law not go through yet.
      - rolisz 3y ago
        The EU doesn't pass laws, they pass some sort of recommendations that individual countries must implement as laws in a certain for another.
        moffkalast 3y ago
        Well if you want to be technically correct, EU regulations are binding and must be implemented to the letter by all member countries without excuse or deviation. EU directives are the ones that have some leeway with local laws. Both are legislation though so might as well call them laws.
      - doikor 3y ago
        afaik (and based on a few minutes of googling) there is no such EU wide regulation or directive.
        3y ago
- rrobukef 3y ago
  You still lose as you won't get raises, bonuses or promotions. You may lose extra-legals like company cars, insurance (?), long term savings-matching. Even then your cost of living will probably increase due to not working.
  - slymon99 3y ago
    Yea, the bonus point is interesting, especially in finance where bonuses can be > 100% of base. You can't insist on firms paying last years bonus, or else people would just quit and get a non compete if they had an insane year. But paying only base also seems a bit unfair. A thought I had was you'd have to pay whatever their new offer is paying. The argument is that if you want to prevent someone from working, you should have to pay them their worth - which, in the case of someone resigning with a competing offer - has just been priced by the hiring market!
    - rrobukef 3y ago
      Paying the wage of the new offer leads to bad incentives w.r.t. nepotism. It also discourages starting your own small business where you tend to pay yourself a small wage.
  - kodah 3y ago
    > You still lose as you won't get raises, bonuses or promotions Jokes on me, I don't get raises or promotions anyway
johncessna 3y ago
Are there a lot of issues with non-competes? I've def heard stories, but it's usually related to poaching scenarios where a contractor gets hired by the company that they are contracting with. That said, I also know that multiple states basically have mechanisms to prevent a non-complete from preventing work. For example, if I'm a mechanic, a non-complete can't keep me from being a mechanic and making a living because a former employer claims that every repair shop is a competitor.
- lacker 3y ago
  The most common use of noncompetes is just to discourage an employee from quitting their job. "Oh, you want to go for for unrelated firm X? Actually, legal says they're a competitor, because we're a huge conglomerate. So, you can't take that job. Sorry." In this situation, the company doesn't actually care about the competition at all. The noncompete is just another tool in their toolbox to discourage you from quitting.
- _trackno5 3y ago
  The whole problem was due to the abuse towards “low skill” workers. Stuff like if you get a job at Subway, you can’t go and work at another deli shop within a certain radius of the former employer. The point of this change is to protect these people, which is totally sensible
  - cooperadymas 3y ago
    This is what highly paid white collar workers on Hacker News like to parrot but it's sensationalist at best. Even in this article where the evidence points to low wage workers having the lowest percentage of NCA's runs with the click bait headline. https://www.minneapolisfed.org/article/2021/non-compete-contracts-sideline-low-wage-workers https://www.minneapolisfed.org/article/2021/non-compete-cont... Regardless, no Subway worker ever GAF about a NCA. They walked right across the street to Jimmy John's and were hired on the spot. And even if Subway had a NCA in place - which I doubt most of the major chains do - Subway doesn't GAF either. The only time anyone would care is maybe if a manager opened another deli across the street and took all the info from their suppliers with them.
couchand 3y ago
It's worth taking a moment to note how many of the (co)sponsors are Working Families members.
- ambicapter 3y ago
  What are we supposed to know about Working Families members? Seems like they're a political party extremely local to me.
  - senkora 3y ago
    They almost always run as both democrats and working families. It’s effectively a marker that a democratic candidate is progressive.
- thebigman433 3y ago
  Why is that something to note?
  - delfinom 3y ago
    Working Families is the real progressive party in NY since the Dems are largely corporatists and a organizationally rotting party. Our previous Emperor Cuomo actively went out of his way to suppress the party since they threatened both the DNC and his manipulate to play the 2 party standoff game for his own benefit. I wouldn't be surprised with Cuomo out of the picture that the WF party continues to increase in size.
    - msla 3y ago
      > corporatists https://www.sjsu.edu/faculty/watkins/corporatism.htm https://www.sjsu.edu/faculty/watkins/corporatism.htm So they're pro-union? > The basic idea of corporatism is that the society and economy of a country should be organized into major interest groups (sometimes called corporations) and representatives of those interest groups settle any problems through negotiation and joint agreement. In contrast to a market economy which operates through competition a corporate economic works through collective bargaining.
gizmo686 3y ago
> the second bill, S6748, would, among other things, prohibit employers from entering into or maintaining non-compete agreements with workers, absent a “good faith basis” to believe a non-compete agreement is enforceable. There should be a more general law about this. Drafting any contract without a good faith belief that it's provisions would be valid if tested by a court should be illegal.
- getmeinrn 3y ago
  Companies have the good faith belief that employees would be so outgunned in a legal fight that most of the time they won't even challenge invalid clauses.
  - gizmo686 3y ago
    Hence the need for a law. Something along the lines of: * Anyone who was given a contract with a provision that the drafter knew was unenforceable can sue. * If they win, they get, punitive damages, actual damages, and lawyer's fees. * It is not necessary to alledge any damages, or even that the provision in question was ever relevant. Do this, and there will be law firms looking and advertising for clients. For cases as obvious as the typical non-compete the law would be so clear that lawyers would have no issue working on contingency. Employers can drive up litigation costs all they want. Plenty of law firms can handle it, and are already used to it; and at thd end of the process, the employer would just pay the cost.
    - kosievdmerwe 3y ago
      It would be especially valuable if there was also a government registry of known unenforceable provisions that employers are assumed by the law to be aware of. This would cut off arguments regarding "knowledge"/ I would also include provisions in the law to force employers to inform explicitly every other person who signed the contract that the clause is not valid.
      - RicoElectrico 3y ago
gen220 3y ago
This is a big deal! Non-competes are a major factor in the finance sector. In tech circles, this mainly impacts HFT firms and prop shops employing software people. There's a well-trodden path in NYC from HFT/Prop #1 -> Big Tech, for duration of a non-compete -> HFT/Prop #2, that can be shortened by one node.
- choppaface 3y ago
  In finance though, don’t people usually get a cushy 6 month paid “gardening leave” when they switch? So I’m not sure how much non-competes help if employees are already being offered contracts and $$$ to not compete. This law won’t make “gardening leave” any cushier?
  - standardUser 3y ago
    That sounds like it applies to a miniscule amount of workers, while many more workers are forced to sign non-competes but get no special treatment (or cash) from their employer for bearing that burden.
    - frankc 3y ago
      Not really. It's widely understood that NY won't enforce a non-compete if its not paid. It's very common in the hedge fund world to get paid your salary for a year to do nothing, even for junior developers. It depends on if the company really wants to hold you out or not. They will release you from the non-compete if they don't want to pay. On the other hand, in the hedge fund world, bonuses are a big part of comp but generally only base pay is paid out, so in reality you might be say 150K to 250K while your comp in expectation is much, much higher. For a junior dev maybe your bonus is .3x to .6x base but for someone senior, your bonus might be 1x to 5x base or more depending on where you sit in the organization. Therefore sitting out still costs you a lot of money.
      - masklinn 3y ago
        > It's widely understood that NY won't enforce a non-compete if its not paid. I’m sure the Walmart cashier with a non-compete hanging around their neck is much appeased by this.
RobotToaster 3y ago
Can't wait for Hochul to water it down to meaninglessness like she did the right to repair bill.
- SpaceManNabs 3y ago
  It is crazy how much stuff Hochul gets away with. And she gets all this credit as a super progressive, pro consumer governor... She is somehow scandal free. Republicans in NY really messed up by nominating a DeSantis style politician in NY. They passed up a massive opportunity for a republican governor since so many dems didn't like Hochul.
  - themitigating 3y ago
    Would a Republican pass any right to repair bill? A watered down bill is better than nothing. So it's weird that you would suggest a Republican would be better for this issue.
    - RobotToaster 3y ago
      >Would a Republican pass any right to repair bill? Ironically, maybe, as a way to attack those "woke" corporations.
    - SpaceManNabs 3y ago
      I think having valid competition might make Hochul a more competent governor and accountability/eyes on her. The idea of an "easy" election never sits well with me unless it is a great incumbent.
      - themitigating 3y ago
        If it's an easy election it's the republicans fault. Anti-abortion, attacking gays, lying about election fraud, etc. All she has to do is be a candidate from the opposing party.
        3y ago
neilv 3y ago
California, and now New York. I wonder whether Massachusetts will match that. https://www.mass.gov/info-details/massachusetts-law-about-noncompetition-agreements https://www.mass.gov/info-details/massachusetts-law-about-no...
- dabraham1248 3y ago
  The first law linked in your article ( https://malegislature.gov/Laws/GeneralLaws/PartI/TitleXXI/Chapter149/Section24l https://malegislature.gov/Laws/GeneralLaws/PartI/TitleXXI/Ch... ) seems to me further reaching than the lesser of the two NY bills (S6748). Am I missing something here?
  - neilv 3y ago
    My bad; I was thinking of the greater of the two NY bills: > Bill No. S3100A, proposes a ban on all non-compete agreements,
- cmrdporcupine 3y ago
  FWIW, to add to the joy, non-competes have been officially banned in Ontario since Oct 25, 2021 (but rejected by the courts for a long time before that. I suspect they're not enforceable in other provinces; but officially not allowed in Ontario.) So that means for all employees in the greater Toronto area. (And Toronto is 4th biggest city in North America just after Chicago).
  - remich 3y ago
    Most non-competes are banned in the third largest city in North America too. Seems like with NYC on board most major employment centers will be covered.
  - isk517 3y ago
    The textbook I read to study for my provincial Engineering Law and Ethics exam had a section on non-competes. It straight up said the vast majority of non-competes are not enforceable but warned that the more specific the circumstances described by the non-compete the greater the chance that a court would enforce it. The example they used for something that would most likely be enforced was a geologist working for company A doing a mining survey in a area under a 6 month non-compete cause would definitely not legally be allowed to take a job for company B to do a survey in the same area until the non-compete expired.
cm2012 3y ago
Awesome news. This alone will raise NYC GDP by a few %.
- xyzelement 3y ago
  How?
  - cm2012 3y ago
    GDP growth comes from productivity, non-competes are very bad for productivity, they add friction across the economy. People say its one of the reasons CA has done so well economically.
xyst 3y ago
It's not entirely clear what happens if a company is NOT located in NY, yet hires a person remotely and that person lives in the state of NY. Does this law apply for as long as 1 entity in the relationship (ie, employer vs employee) is located in NY, or is the statute invalidated completely if both parties are not in NY?
- stainablesteel 3y ago
  you can follow the laws of the state you physically work in, and no employer in a different state can do anything to you regarding a different state's law
- JumpCrisscross 3y ago
  Broadly speaking, if your employee lives in New York you have a nexus to New York law in their respect.
- shin_lao 3y ago
  If you have an employee in NY you need a foreign entity in NY and it must abide to NY law.
- duxup 3y ago
  I worked for a Silicon Valley company who made a big deal about their family leave policy. I was an employee and live and work in Minnesota. The policy did not apply to me : (
  - fckthisguy 3y ago
    Sounds like they chose not to apply the policy to you. What would have stopped them, if tiit was something you wanted.
    - duxup 3y ago
      The policy was dictated by the state of California believe. Funded by taxes taken by the state. So I suspect they couldn’t rely on CA so the company opted that if you weren’t in CA you were out. The company could’ve paid of course, but by that time they weren’t that kind of a company anymore.
ldjkfkdsjnv 3y ago
Does this apply retroactively? If I am already in a non-compete in NYC is it null and void?
- toomuchtodo 3y ago
  > Bill No. S6748 is generally aimed at preventing the establishment of monopolies, monopsonies, and restraints of trade. > If enacted, the provisions of S6748 would prevent employers from entering into or maintaining non-competition agreements with workers, including independent contractors, absent a “good faith basis” to believe that a non-compete agreement is enforceable. The bill does not expand upon what constitutes a “good faith basis.” The legislation would also define “non-compete agreement” broadly to include any “de facto” agreement that “has the effect of prohibiting [covered individuals] from seeking or accepting employment[,]” such as overbroad non-disclosure agreements and training-repayment obligations. Employers would also be required to rescind unenforceable non-compete agreements with both current and former workers, and they would be required to provide notice to each worker that an agreement is no longer in effect. If enacted, the law would take effect immediately. Status: https://www.nysenate.gov/legislation/bills/2023/S6748 https://www.nysenate.gov/legislation/bills/2023/S6748
  - epicureanideal 3y ago
    Wow, they included NDAs! Amazing! See my previous comment about the problem of overly broad NDAs: https://news.ycombinator.com/threads?id=epicureanideal&next=36174482#36132641 https://news.ycombinator.com/threads?id=epicureanideal&next=...
say_it_as_it_is 3y ago
So is Human Resources now going to train employees that it is unethical to recruit colleagues, firing employees who are hired at-will?
alphanullmeric 3y ago
Entity that forcefully bans its competition makes it illegal to voluntarily not work for your competition
Joel_Mckay 3y ago
The main reason selective non-compete clauses are important, is preventing industrial espionage on intangible assets... and customer lead-data exfiltration. In business, idealism will not be rewarded in the long-term. People intuitively understand this fact, if they were ever stung by a bad partnership deal or outright scam. The core issue was the scope of these terms became far too broad in 50 years. The sun always shines even when our faces are turned, =)
adamsmith143 3y ago
Hedge Funds and I-Banks are on suicide watch.
user3939382 3y ago
Has anyone spent the time to read this through / does anyone know if it's retroactive? Does it only apply to new deals?
smashah 3y ago
Ok great now let's do prohibition of anti-consumer, anti-innovation, anti-competitive clauses in Terms of Service/EULAs.
sublimefire 3y ago
Even if it passes it will need to be tested in the courts (possibly in multiple states). There was an interesting case in Ireland (I know, not U.S.) recently where non-compete should not be enforceable. Interestingly enough the company still tried their stance in the court but alas failed. This was between Ryanair and Mr. Bellow (ex COO) who left for a competitor EasyJet. https://hayes-solicitors.ie/News/Ryanair-DAC-v-Bellew---what-does-this-decision-mean-for-restrictive-covenants-in-Ireland- https://hayes-solicitors.ie/News/Ryanair-DAC-v-Bellew---what... The abuse of power will not just suddenly stop. You will see your contracts polluted with non enforceable non competes for times to come. It probably scares people of.
m3kw9 3y ago
Does it affect old contracts or just new ones
AlexandrB 3y ago
An alternative to banning them outright would be to mandate that the employee is compensated at something like 80%+ of annual pay for the agreement's duration for it to remain valid. So if McDonald's thinks their burger technology is that valuable they can pay to keep it under wraps for a while.
- jewelry 3y ago
  It actually sucks to be blocked from starting your own business with your own skill learned or sharpened during prior employment...
  - AlexandrB 3y ago
    I agree, but I suspect that if there was significant cost attached companies would only use non-competes in very rare cases.
- awiejrliawjer 3y ago
  That is an interesting idea, but I can guarantee employers would fine ways around that very quickly. For example, maybe the law stipulates that employees must be compensated for 80% of salary, so employers start paying mostly in benefits and equity. Or we specify 80% of total compensation, and they find a way to say healthcare is worth nothing and grossly underestimate the initial value of equity. There's always a way. Banning it outright doesn't even guarantee it will work, because cartels will agree not to hire each other's recently departed employees.
  - AlexandrB 3y ago
    I agree it's probably safer to just ban them instead of trying to plug all the loopholes.
- ubercore 3y ago
  As I understand it, that's what happens in Norway. If a company wants to enforce a non-compete, they keep paying your salary while they do so.
dburkland 3y ago
This needs to be passed in the remaining 49 states ASAP. When moving over to my current gig, my previous employer forced me to sit out for 6 months. Their agreement was so broad that it pertained to anywhere where there was phone or email in the world. Also applied to any customers, partners, or competitors so basically I couldn’t work in tech at all (since they are a major reseller and everybody procures something from them). Hint: Their company color is fuchsia
- ttymck 3y ago
  > anywhere where there was phone or email in the world Surely a clause that broad must have been unenforceable in at least _some_ jurisdictions?
- asrossbach 3y ago
  It's already illegal to enforce non-compete agreements in California. So more like "remaining 48 states" :)
  - flerovium 3y ago
    MN, so "remaining 47"
IG_Semmelweiss 3y ago
This is not going to be a popular take , but this will hurt employment or comp of medical fellows & residents, who expect to go into private practices. In summary, established SMB independent practices will offer fewer w2s to freshly minted MDs. Expect established doctors to require buying into a practice's equity, meaning the odd new MD with funds to buy in will do so (but will take less comp vs w2 salaried) ; while the majority of those without funds to buy in (due to a pile of student loans), will end up as W2 ...but for hospital groups. Why ? Existing doctor-owners will be concerned with paying for the risk of training new doctors who can then take the existing practice's foot traffic with themselves across the street on a whim. Why Paying? The new w2 doctor is a loss leader a period of time, which varies across specialties. They are slower, don't know how to use new EMR, etc So yes, i'm for competition, but expect that hospitals will benefit tremendously from this new restriction in NYS. And healthcare costs will rise accordingly.
- ancientworldnow 3y ago
  If they don't want that to happen they can simply pay deferred compensation like non competes work in every other nation instead of holding them hostage through medical debt service.
  - IG_Semmelweiss 3y ago
    I think that's what should happen, but what do you do in a situation where you have 2 market segments paying differently? Most HFT firms pay deferred comp. There's almost no industry alternative offering to pay pay-as-you-go compensation to a trader. Even if all private practices decided to go with deferred comp, hospitals would just seem all the more attractive with pay-as-you go comp. Hospitals will never be scared of an individual doctor leaving them to compete. Its actually already illegal - existing regulation requires existing hospitals to *approve* of new hospitals being built - yes, this is wild.
- nwiswell 3y ago
  This is how it works for small vs. large business in ANY skilled/professional field, whether we're talking lawyers, accountants, engineers, whatever. If you want employees to stay, then incentivize them accordingly. If that means that junior MDs make low W2 and then that ramps up as they gain experience, that seems reasonable to me! Anything else is fundamentally not fair.
deleted 3y ago
[deleted]
dakial1 3y ago
Where I live (outside the US) non-competes are only valid if a company pays full compensation (and they take bonus into consideration) for the time it requires the non-compete to be valid, otherwise any court would nullify it. It seems fair to me.
maerF0x0 3y ago
IMO they should simply introduce a rule. You cannot enforce a non-compete without compensating them their previous salary for the term. You want me to not work for someone else? Then pay me like I'm working for you.
- wocram 3y ago
  What if non-salary compensation makes up the majority of their total compensation?
friendzis 3y ago
I guess my country regulates this pretty well - employer is forced to pay at least half of the salary for the duration of non-compete and on top of that the onus is on the employer to prove that an ex-employee is engaging in "direct competition" if they are going to sue for damages. Which, I tend to believe, captures the purpose of non-compete agreements quite well.

803 points by hhs 3y ago

mr_00ff00 3y ago

I am a junior dev hired to an HFT firm. I was excited to have 6 months of free pay just to not work :(

pc86 3y ago
That's not how non-competes work.
- cbg0 3y ago
  It is in Europe.
- blerud 3y ago
  It is at many HFT firms, including mine. You will be paid your base salary for some number of months to not work at a competitor, even if you don't have a signed offer for a competitor and just want to sit around
  - chimeracoder 3y ago
    > It is at many HFT firms, including mine. You will be paid your base salary for some number of months to not work at a competitor, even if you don't have a signed offer for a competitor and just want to sit around That's called "garden leave" and it's completely different from non-compete agreements as discussed by this bill.
    - pclmulqdq 3y ago
      "Garden leave" wasn't a common term when I was in HFT in NYC. It was just called a "non-compete" (possibly confusingly).
      - ghaff 3y ago
        Garden leave is just a (usually?) legal (or at least contractual) requirement associated with non-compete agreements in some jurisdictions. Unsurprisingly, it was originally a British term, although it meant something different.
        pclmulqdq 3y ago
        Personally, the only time I ever heard it was from the mouths of British recruiters.
      - chimeracoder 3y ago
        > "Garden leave" wasn't a common term when I was in HFT in NYC. It was just called a "non-compete" (possibly confusingly). The terms are used somewhat interchangeably in colloquial use, because (at least as of now) the distinction isn't meaningful for most people. The point is that garden leave isn't targeted by this bill.
        frankc 3y ago
        I don't think that is true, or at least I have not seen that anywhere. My understanding is this bill removes any kind of non-competes. It was already basically unenforcible to have an unpaid non-compete in New York (through common law)
        chimeracoder 3y ago
        > It was already basically unenforcible to have an unpaid non-compete in New York (through common law) That is not true - there are four criteria for non-competes to be valid in NY, and payment for the duration is not one of them. > I don't think that is true, or at least I have not seen that anywhere. My understanding is this bill removes any kind of non-competes. There are two bills - one of them requires payment for noncompetes.
        delfinom 3y ago
        The first bill outlaws all non-competes and garden leave would fall under it. The most they could do is offer it as a form of severance where you get to sit on your butt for 6 months conditionally. The second bill would allow for garden leave aka compensated non-competes. It just codifies the "don't try any non-compensated/good faith aspect".
    - masklinn 3y ago
      A garden leave is a form of compensated non-compete. The entire point is that you’re paying a former employee to not compete (in this case to literally not work).
- bshipp 3y ago
  If companies actually paid employees not to compete they would be able to keep them. Correct me if I'm wrong, but--at least where I live--non-competes lack legal authority (even before they were outlawed) because most companies don't provide compensation for limiting an ex-employee's ability to make a living in their field in the future. So, it's conceivable that an ex-employee could receive 6 months severance in trade for a non-compete of that length, but I doubt it's very popular.
  - slymon99 3y ago
    > If companies actually paid employees not to compete they would be able to keep them Why is this true? If someone is making $200k and leaving to make $350k, an employer may well be able to afford the $100k for 6 months to prevent them from immediately handing over IP, but not be able to match the $350k their new employer is offering. > So, it's conceivable that an ex-employee could receive 6 months severance in trade for a non-compete of that length, but I doubt it's very popular. It's quite popular in finance. Also, it's not a one time severance, its paid as a standard paycheck. A firm might "release" someone from their non compete while it is still active (basically saying it's no longer active and we are no longer paying you).
    - ghaff 3y ago
      And there are a ton of other reasons people change companies as well. >an employer may well be able to afford the $100k for 6 months to prevent them from immediately handing over IP Presumably there are other restrictions to just handing over IP but at least some of the reasoning for non-competes is that you can't really restrict the transfer of a lot of know-how even if they don't share corporate strategy decks.
    - bshipp 3y ago
      > Why is this true? If someone is making $200k and leaving to make $350k, an employer may well be able to afford the $100k for 6 months to prevent them from immediately handing over IP, but not be able to match the $350k their new employer is offering. Sorry, I worded that poorly. I meant companies could keep the ability to impose non-competes if they originally compensated employees who were let go. I know it gets muddled when it comes to employees moving around for increased pay, but non-competes aren't supposed to be a mechanism for holding down salaries. They're only intended to protect vital corporate secrets that, if they were released, would be so costly to the company that they'd risk bankruptcy. The value of those secrets would likely be enough that many competitors would be hesitant to hire those employees because they might fear opening themselves up to future litigation for patent infringement or IP or whatnot. The fact that many HR departments apply them to every single rank and file employee and don't explicitly define what constitutes a direct competitor or what explicit activities/information are protected by the NC is why they're a pretty useless legal tool in most circumstances.
- d_watt 3y ago
  It can be https://en.wikipedia.org/wiki/Garden_leave https://en.wikipedia.org/wiki/Garden_leave
- mywittyname 3y ago
  If a company wants to actually enforce a non-compete, then it can't be one-sided.
nburr 3y ago
Not at all how NCAs work in NYS or the US in general.
- deleted 3y ago
  [deleted]
xilni 3y ago
Garden leave is a different beast and seems fair, you and the employer each get something, non competes on the other hand do not usually offer anything to the employee.
- ghaff 3y ago
  Many garden leaves as a condition of having a non-compete aren't a great deal though. I think the fairly recent Massachusetts law is 50% pay--and that may be of just base pay. It might be a good deal if you want to travel in your twenties. It may not be such a great deal if you have a mortgage to pay and family to support and you're basically pressing pause on your career. It does make the company put skin in the game but if they decide to enforce anyway, it's better than nothing but hardly a panacea.
- esoterica 3y ago
  Paid non competes are also banned under the proposed law (and currently banned in California).
twunde 3y ago
Most companies do not pay for the period of time that a non-compete is in effect. What you're describing is somewhat different. Typically that's known as garden leave, and essentially you're treated as a current employee for the period of time, but you're not allowed to work. Which means that you'll likely have the 6 months of free pay. I'd definitely review your contract and the terms.
- doikor 3y ago
  Thankfully here in Finland non-competes are void if you are not paid. Basically the right to earn a living wins over any contract you could sign against it.
  - moffkalast 3y ago
    Didn't the EU ban non-compete clauses entirely recently anyway? Or did the law not go through yet.
    - rolisz 3y ago
      The EU doesn't pass laws, they pass some sort of recommendations that individual countries must implement as laws in a certain for another.
      - moffkalast 3y ago
        Well if you want to be technically correct, EU regulations are binding and must be implemented to the letter by all member countries without excuse or deviation. EU directives are the ones that have some leeway with local laws. Both are legislation though so might as well call them laws.
    - doikor 3y ago
      afaik (and based on a few minutes of googling) there is no such EU wide regulation or directive.
      - 3y ago
rrobukef 3y ago
You still lose as you won't get raises, bonuses or promotions. You may lose extra-legals like company cars, insurance (?), long term savings-matching. Even then your cost of living will probably increase due to not working.
- slymon99 3y ago
  Yea, the bonus point is interesting, especially in finance where bonuses can be > 100% of base. You can't insist on firms paying last years bonus, or else people would just quit and get a non compete if they had an insane year. But paying only base also seems a bit unfair. A thought I had was you'd have to pay whatever their new offer is paying. The argument is that if you want to prevent someone from working, you should have to pay them their worth - which, in the case of someone resigning with a competing offer - has just been priced by the hiring market!
  - rrobukef 3y ago
    Paying the wage of the new offer leads to bad incentives w.r.t. nepotism. It also discourages starting your own small business where you tend to pay yourself a small wage.
- kodah 3y ago
  > You still lose as you won't get raises, bonuses or promotions Jokes on me, I don't get raises or promotions anyway

johncessna 3y ago

Are there a lot of issues with non-competes? I've def heard stories, but it's usually related to poaching scenarios where a contractor gets hired by the company that they are contracting with. That said, I also know that multiple states basically have mechanisms to prevent a non-complete from preventing work. For example, if I'm a mechanic, a non-complete can't keep me from being a mechanic and making a living because a former employer claims that every repair shop is a competitor.

lacker 3y ago
The most common use of noncompetes is just to discourage an employee from quitting their job. "Oh, you want to go for for unrelated firm X? Actually, legal says they're a competitor, because we're a huge conglomerate. So, you can't take that job. Sorry." In this situation, the company doesn't actually care about the competition at all. The noncompete is just another tool in their toolbox to discourage you from quitting.
_trackno5 3y ago
The whole problem was due to the abuse towards “low skill” workers. Stuff like if you get a job at Subway, you can’t go and work at another deli shop within a certain radius of the former employer. The point of this change is to protect these people, which is totally sensible
- cooperadymas 3y ago
  This is what highly paid white collar workers on Hacker News like to parrot but it's sensationalist at best. Even in this article where the evidence points to low wage workers having the lowest percentage of NCA's runs with the click bait headline. https://www.minneapolisfed.org/article/2021/non-compete-contracts-sideline-low-wage-workers https://www.minneapolisfed.org/article/2021/non-compete-cont... Regardless, no Subway worker ever GAF about a NCA. They walked right across the street to Jimmy John's and were hired on the spot. And even if Subway had a NCA in place - which I doubt most of the major chains do - Subway doesn't GAF either. The only time anyone would care is maybe if a manager opened another deli across the street and took all the info from their suppliers with them.

couchand 3y ago

It's worth taking a moment to note how many of the (co)sponsors are Working Families members.

ambicapter 3y ago
What are we supposed to know about Working Families members? Seems like they're a political party extremely local to me.
- senkora 3y ago
  They almost always run as both democrats and working families. It’s effectively a marker that a democratic candidate is progressive.
thebigman433 3y ago
Why is that something to note?
- delfinom 3y ago
  Working Families is the real progressive party in NY since the Dems are largely corporatists and a organizationally rotting party. Our previous Emperor Cuomo actively went out of his way to suppress the party since they threatened both the DNC and his manipulate to play the 2 party standoff game for his own benefit. I wouldn't be surprised with Cuomo out of the picture that the WF party continues to increase in size.
  - msla 3y ago
    > corporatists https://www.sjsu.edu/faculty/watkins/corporatism.htm https://www.sjsu.edu/faculty/watkins/corporatism.htm So they're pro-union? > The basic idea of corporatism is that the society and economy of a country should be organized into major interest groups (sometimes called corporations) and representatives of those interest groups settle any problems through negotiation and joint agreement. In contrast to a market economy which operates through competition a corporate economic works through collective bargaining.

gizmo686 3y ago

> the second bill, S6748, would, among other things, prohibit employers from entering into or maintaining non-compete agreements with workers, absent a “good faith basis” to believe a non-compete agreement is enforceable. There should be a more general law about this. Drafting any contract without a good faith belief that it's provisions would be valid if tested by a court should be illegal.

getmeinrn 3y ago
Companies have the good faith belief that employees would be so outgunned in a legal fight that most of the time they won't even challenge invalid clauses.
- gizmo686 3y ago
  Hence the need for a law. Something along the lines of: * Anyone who was given a contract with a provision that the drafter knew was unenforceable can sue. * If they win, they get, punitive damages, actual damages, and lawyer's fees. * It is not necessary to alledge any damages, or even that the provision in question was ever relevant. Do this, and there will be law firms looking and advertising for clients. For cases as obvious as the typical non-compete the law would be so clear that lawyers would have no issue working on contingency. Employers can drive up litigation costs all they want. Plenty of law firms can handle it, and are already used to it; and at thd end of the process, the employer would just pay the cost.
  - kosievdmerwe 3y ago
    It would be especially valuable if there was also a government registry of known unenforceable provisions that employers are assumed by the law to be aware of. This would cut off arguments regarding "knowledge"/ I would also include provisions in the law to force employers to inform explicitly every other person who signed the contract that the clause is not valid.
    - RicoElectrico 3y ago

gen220 3y ago

This is a big deal! Non-competes are a major factor in the finance sector. In tech circles, this mainly impacts HFT firms and prop shops employing software people. There's a well-trodden path in NYC from HFT/Prop #1 -> Big Tech, for duration of a non-compete -> HFT/Prop #2, that can be shortened by one node.

choppaface 3y ago
In finance though, don’t people usually get a cushy 6 month paid “gardening leave” when they switch? So I’m not sure how much non-competes help if employees are already being offered contracts and $$$ to not compete. This law won’t make “gardening leave” any cushier?
- standardUser 3y ago
  That sounds like it applies to a miniscule amount of workers, while many more workers are forced to sign non-competes but get no special treatment (or cash) from their employer for bearing that burden.
  - frankc 3y ago
    Not really. It's widely understood that NY won't enforce a non-compete if its not paid. It's very common in the hedge fund world to get paid your salary for a year to do nothing, even for junior developers. It depends on if the company really wants to hold you out or not. They will release you from the non-compete if they don't want to pay. On the other hand, in the hedge fund world, bonuses are a big part of comp but generally only base pay is paid out, so in reality you might be say 150K to 250K while your comp in expectation is much, much higher. For a junior dev maybe your bonus is .3x to .6x base but for someone senior, your bonus might be 1x to 5x base or more depending on where you sit in the organization. Therefore sitting out still costs you a lot of money.
    - masklinn 3y ago
      > It's widely understood that NY won't enforce a non-compete if its not paid. I’m sure the Walmart cashier with a non-compete hanging around their neck is much appeased by this.

RobotToaster 3y ago

Can't wait for Hochul to water it down to meaninglessness like she did the right to repair bill.

SpaceManNabs 3y ago
It is crazy how much stuff Hochul gets away with. And she gets all this credit as a super progressive, pro consumer governor... She is somehow scandal free. Republicans in NY really messed up by nominating a DeSantis style politician in NY. They passed up a massive opportunity for a republican governor since so many dems didn't like Hochul.
- themitigating 3y ago
  Would a Republican pass any right to repair bill? A watered down bill is better than nothing. So it's weird that you would suggest a Republican would be better for this issue.
  - RobotToaster 3y ago
    >Would a Republican pass any right to repair bill? Ironically, maybe, as a way to attack those "woke" corporations.
  - SpaceManNabs 3y ago
    I think having valid competition might make Hochul a more competent governor and accountability/eyes on her. The idea of an "easy" election never sits well with me unless it is a great incumbent.
    - themitigating 3y ago
      If it's an easy election it's the republicans fault. Anti-abortion, attacking gays, lying about election fraud, etc. All she has to do is be a candidate from the opposing party.
      - 3y ago

neilv 3y ago

California, and now New York. I wonder whether Massachusetts will match that. https://www.mass.gov/info-details/massachusetts-law-about-noncompetition-agreements https://www.mass.gov/info-details/massachusetts-law-about-no...

dabraham1248 3y ago
The first law linked in your article ( https://malegislature.gov/Laws/GeneralLaws/PartI/TitleXXI/Chapter149/Section24l https://malegislature.gov/Laws/GeneralLaws/PartI/TitleXXI/Ch... ) seems to me further reaching than the lesser of the two NY bills (S6748). Am I missing something here?
- neilv 3y ago
  My bad; I was thinking of the greater of the two NY bills: > Bill No. S3100A, proposes a ban on all non-compete agreements,
cmrdporcupine 3y ago
FWIW, to add to the joy, non-competes have been officially banned in Ontario since Oct 25, 2021 (but rejected by the courts for a long time before that. I suspect they're not enforceable in other provinces; but officially not allowed in Ontario.) So that means for all employees in the greater Toronto area. (And Toronto is 4th biggest city in North America just after Chicago).
- remich 3y ago
  Most non-competes are banned in the third largest city in North America too. Seems like with NYC on board most major employment centers will be covered.
- isk517 3y ago
  The textbook I read to study for my provincial Engineering Law and Ethics exam had a section on non-competes. It straight up said the vast majority of non-competes are not enforceable but warned that the more specific the circumstances described by the non-compete the greater the chance that a court would enforce it. The example they used for something that would most likely be enforced was a geologist working for company A doing a mining survey in a area under a 6 month non-compete cause would definitely not legally be allowed to take a job for company B to do a survey in the same area until the non-compete expired.

cm2012 3y ago

Awesome news. This alone will raise NYC GDP by a few %.

xyzelement 3y ago
How?
- cm2012 3y ago
  GDP growth comes from productivity, non-competes are very bad for productivity, they add friction across the economy. People say its one of the reasons CA has done so well economically.

xyst 3y ago

It's not entirely clear what happens if a company is NOT located in NY, yet hires a person remotely and that person lives in the state of NY. Does this law apply for as long as 1 entity in the relationship (ie, employer vs employee) is located in NY, or is the statute invalidated completely if both parties are not in NY?

stainablesteel 3y ago
you can follow the laws of the state you physically work in, and no employer in a different state can do anything to you regarding a different state's law
JumpCrisscross 3y ago
Broadly speaking, if your employee lives in New York you have a nexus to New York law in their respect.
shin_lao 3y ago
If you have an employee in NY you need a foreign entity in NY and it must abide to NY law.
duxup 3y ago
I worked for a Silicon Valley company who made a big deal about their family leave policy. I was an employee and live and work in Minnesota. The policy did not apply to me : (
- fckthisguy 3y ago
  Sounds like they chose not to apply the policy to you. What would have stopped them, if tiit was something you wanted.
  - duxup 3y ago
    The policy was dictated by the state of California believe. Funded by taxes taken by the state. So I suspect they couldn’t rely on CA so the company opted that if you weren’t in CA you were out. The company could’ve paid of course, but by that time they weren’t that kind of a company anymore.

ldjkfkdsjnv 3y ago

Does this apply retroactively? If I am already in a non-compete in NYC is it null and void?

toomuchtodo 3y ago
> Bill No. S6748 is generally aimed at preventing the establishment of monopolies, monopsonies, and restraints of trade. > If enacted, the provisions of S6748 would prevent employers from entering into or maintaining non-competition agreements with workers, including independent contractors, absent a “good faith basis” to believe that a non-compete agreement is enforceable. The bill does not expand upon what constitutes a “good faith basis.” The legislation would also define “non-compete agreement” broadly to include any “de facto” agreement that “has the effect of prohibiting [covered individuals] from seeking or accepting employment[,]” such as overbroad non-disclosure agreements and training-repayment obligations. Employers would also be required to rescind unenforceable non-compete agreements with both current and former workers, and they would be required to provide notice to each worker that an agreement is no longer in effect. If enacted, the law would take effect immediately. Status: https://www.nysenate.gov/legislation/bills/2023/S6748 https://www.nysenate.gov/legislation/bills/2023/S6748
- epicureanideal 3y ago
  Wow, they included NDAs! Amazing! See my previous comment about the problem of overly broad NDAs: https://news.ycombinator.com/threads?id=epicureanideal&next=36174482#36132641 https://news.ycombinator.com/threads?id=epicureanideal&next=...

say_it_as_it_is 3y ago

So is Human Resources now going to train employees that it is unethical to recruit colleagues, firing employees who are hired at-will?

alphanullmeric 3y ago

Entity that forcefully bans its competition makes it illegal to voluntarily not work for your competition

Joel_Mckay 3y ago

The main reason selective non-compete clauses are important, is preventing industrial espionage on intangible assets... and customer lead-data exfiltration. In business, idealism will not be rewarded in the long-term. People intuitively understand this fact, if they were ever stung by a bad partnership deal or outright scam. The core issue was the scope of these terms became far too broad in 50 years. The sun always shines even when our faces are turned, =)

adamsmith143 3y ago

Hedge Funds and I-Banks are on suicide watch.

user3939382 3y ago

Has anyone spent the time to read this through / does anyone know if it's retroactive? Does it only apply to new deals?

smashah 3y ago

Ok great now let's do prohibition of anti-consumer, anti-innovation, anti-competitive clauses in Terms of Service/EULAs.

sublimefire 3y ago

Even if it passes it will need to be tested in the courts (possibly in multiple states). There was an interesting case in Ireland (I know, not U.S.) recently where non-compete should not be enforceable. Interestingly enough the company still tried their stance in the court but alas failed. This was between Ryanair and Mr. Bellow (ex COO) who left for a competitor EasyJet. https://hayes-solicitors.ie/News/Ryanair-DAC-v-Bellew---what-does-this-decision-mean-for-restrictive-covenants-in-Ireland- https://hayes-solicitors.ie/News/Ryanair-DAC-v-Bellew---what... The abuse of power will not just suddenly stop. You will see your contracts polluted with non enforceable non competes for times to come. It probably scares people of.

m3kw9 3y ago

Does it affect old contracts or just new ones

AlexandrB 3y ago

An alternative to banning them outright would be to mandate that the employee is compensated at something like 80%+ of annual pay for the agreement's duration for it to remain valid. So if McDonald's thinks their burger technology is that valuable they can pay to keep it under wraps for a while.

jewelry 3y ago
It actually sucks to be blocked from starting your own business with your own skill learned or sharpened during prior employment...
- AlexandrB 3y ago
  I agree, but I suspect that if there was significant cost attached companies would only use non-competes in very rare cases.
awiejrliawjer 3y ago
That is an interesting idea, but I can guarantee employers would fine ways around that very quickly. For example, maybe the law stipulates that employees must be compensated for 80% of salary, so employers start paying mostly in benefits and equity. Or we specify 80% of total compensation, and they find a way to say healthcare is worth nothing and grossly underestimate the initial value of equity. There's always a way. Banning it outright doesn't even guarantee it will work, because cartels will agree not to hire each other's recently departed employees.
- AlexandrB 3y ago
  I agree it's probably safer to just ban them instead of trying to plug all the loopholes.
ubercore 3y ago
As I understand it, that's what happens in Norway. If a company wants to enforce a non-compete, they keep paying your salary while they do so.

dburkland 3y ago

This needs to be passed in the remaining 49 states ASAP. When moving over to my current gig, my previous employer forced me to sit out for 6 months. Their agreement was so broad that it pertained to anywhere where there was phone or email in the world. Also applied to any customers, partners, or competitors so basically I couldn’t work in tech at all (since they are a major reseller and everybody procures something from them). Hint: Their company color is fuchsia

ttymck 3y ago
> anywhere where there was phone or email in the world Surely a clause that broad must have been unenforceable in at least _some_ jurisdictions?
asrossbach 3y ago
It's already illegal to enforce non-compete agreements in California. So more like "remaining 48 states" :)
- flerovium 3y ago
  MN, so "remaining 47"

IG_Semmelweiss 3y ago

This is not going to be a popular take , but this will hurt employment or comp of medical fellows & residents, who expect to go into private practices. In summary, established SMB independent practices will offer fewer w2s to freshly minted MDs. Expect established doctors to require buying into a practice's equity, meaning the odd new MD with funds to buy in will do so (but will take less comp vs w2 salaried) ; while the majority of those without funds to buy in (due to a pile of student loans), will end up as W2 ...but for hospital groups. Why ? Existing doctor-owners will be concerned with paying for the risk of training new doctors who can then take the existing practice's foot traffic with themselves across the street on a whim. Why Paying? The new w2 doctor is a loss leader a period of time, which varies across specialties. They are slower, don't know how to use new EMR, etc So yes, i'm for competition, but expect that hospitals will benefit tremendously from this new restriction in NYS. And healthcare costs will rise accordingly.

ancientworldnow 3y ago
If they don't want that to happen they can simply pay deferred compensation like non competes work in every other nation instead of holding them hostage through medical debt service.
- IG_Semmelweiss 3y ago
  I think that's what should happen, but what do you do in a situation where you have 2 market segments paying differently? Most HFT firms pay deferred comp. There's almost no industry alternative offering to pay pay-as-you-go compensation to a trader. Even if all private practices decided to go with deferred comp, hospitals would just seem all the more attractive with pay-as-you go comp. Hospitals will never be scared of an individual doctor leaving them to compete. Its actually already illegal - existing regulation requires existing hospitals to *approve* of new hospitals being built - yes, this is wild.
nwiswell 3y ago
This is how it works for small vs. large business in ANY skilled/professional field, whether we're talking lawyers, accountants, engineers, whatever. If you want employees to stay, then incentivize them accordingly. If that means that junior MDs make low W2 and then that ramps up as they gain experience, that seems reasonable to me! Anything else is fundamentally not fair.

deleted 3y ago

[deleted]

dakial1 3y ago

Where I live (outside the US) non-competes are only valid if a company pays full compensation (and they take bonus into consideration) for the time it requires the non-compete to be valid, otherwise any court would nullify it. It seems fair to me.

maerF0x0 3y ago

IMO they should simply introduce a rule. You cannot enforce a non-compete without compensating them their previous salary for the term. You want me to not work for someone else? Then pay me like I'm working for you.

wocram 3y ago
What if non-salary compensation makes up the majority of their total compensation?

friendzis 3y ago

I guess my country regulates this pretty well - employer is forced to pay at least half of the salary for the duration of non-compete and on top of that the onus is on the employer to prove that an ex-employee is engaging in "direct competition" if they are going to sue for damages. Which, I tend to believe, captures the purpose of non-compete agreements quite well.