4 ms·

How does it work in practice? Can company write contract saying compensation for non compete is $1/yr?

TylerE 3y ago
What incentive would there be for the employee to sign such an incredibly one sided contract when they could literally go to any other job?
- JoshTriplett 3y ago
  What incentive is there for the employee to sign a non-compete today that has $0/year compensation for the non-compete duration? However, another comment in this thread suggests that the law in question requires the compensation be the same as that of the job itself, which avoids this issue.
  - tsimionescu 3y ago
    > What incentive is there for the employee to sign a non-compete today that has $0/year compensation for the non-compete duration? If it's the only way to get a job, that's the incentive. If the whole industry does it, or at least the vast majority, then workers don't have an actual choice.
    - JoshTriplett 3y ago
      That was the point of my comment. The comment I was replying to asked " What incentive would there be for the employee to sign such an incredibly one sided contract when they could literally go to any other job?", and my answer was to equate it to the incentive they have for signing existing even-more-one-sided non-competes.
- fardo 3y ago
  I think it’s more telling to look at the opposite question, “what leverage would employees have to turn such a term down, assuming such practices were considered ‘industry standard’ and all employers of note made sure to include it?” The answer in an environment with a ban on non-competes is “they’d either have legal recourse if someone tried to write them a contract with that term, or the term would be treated as non-enforceable and therefore harmless”. In the current environment, broadly speaking, most employees wouldn’t have leverage to turn such a term down, and generally don’t.
  - somenameforme 3y ago
    It's not most employees, its the employees that an employer would even bother with a non-compete for. And many (most?) of this group would have the leverage to turn down an undesirable offer.
    - reaperman 3y ago
      Arby’s, Auntie Anne’s, Buffalo Wild Wings, Carl’s Jr., Cinnabon, Jimmy John’s, McDonald’s, and Subway have all made low-wage workers sign non competes.
      - randomdata 3y ago
        [flagged]
        reaperman 3y ago
        Not necessarily true in many small towns across rural USA. If the major holding companies, e.g. Yum! Brands, McDonald's, etc. have all of their brands doing non-competes there might be only 2 independent fast-food joints within a 45-minute drive and few other jobs available.
        deleted 3y ago
        [deleted]
        randomdata 3y ago
        If that scenario ever played out, the workers would not be able to sign the agreement, so the employer would just have to concede. It would be far more costly to close down business (unless it was going to close anyway, in which case your comment is moot) than to take a stand and hire nobody. Bedsides, if we want to pretend that in your made up scenario that the workers did somehow end up signing the agreements, the employers would quickly run out of people to hire. A small town – one too far away from anything else for others to come in to work – and where everyone has legally taken themselves out of the job market is not a good place to be in as an employer. While employers can benefit from non-competes under certain conditions, they are not universally beneficial. You offer a fun thought experiment, but in reality a non-compete would not be offered here in the first place.
- distortionfield 3y ago
  In the analogy, I don’t think you could “literally go to any other” rocket science job or whatever. Even within my field, which is pretty broad in tech, it’s not that easy to switch jobs and I’ve had non-competes meaningfully interfere with new prospects because of the subject matter of the new opportunity.
  - ghaff 3y ago
    The existence of a non-compete can be a real showstopper, especially at smaller firms even if the noncompete probably doesn't apply. I worked for a very small company for a number of years and our business office basically wouldn't touch anyone who had a noncompete of any kind.
- xboxnolifes 3y ago
  Same argument applies to the status quo. Zero pay for non-compete duration, just don't sign.
- palemoonale 3y ago
  > when they could literally go to any other job? Can they, though? This fight is moztly not about the spoiled tech sector.
- Broken_Hippo 3y ago
  Some fast food places require these. I'm pretty sure they aren't gonna get literally any other job. Sign it or no paycheck.
vlovich123 3y ago
It sounds like the requirement is that they pay to give you the same salary until the non compete expires.
realusername 3y ago
These laws in the EU countries that apply them are usually stating that the compensation has to be reasonable in regards to the salary the employee is normally getting and the potential loss of money created by the non-compete close so no, one dollar won't work. Also the non-compete clause need to actually protect some company knowledge, a non-compete clause on a bus driver will never be enforceable, regardless on how much extra the company pays.
ajsnigrutin 3y ago
In practice, noncompetes are rare, because noone wants to pay for someone who quit (or got fired). I personally know only one person with a current non compete, he worked at some niche company, that paid a few tens of thousands of euros for specialization in one specific niche branch and one specific software. He can still work in the same industry, just not with that specific software, and he got 75% of his previous paycheck for (i think) 18 months (the length of the noncompete) + of course the current paycheck he earns in a similar industry (with obviously a different software solution). The noncompetes are usually a case of having to invest a lot to educate a worker in the first place (again, niche stuff). General stuff (like a php programmer) would never get a noncompete, because the courses are cheap, anyone can learn that themself, and the monthly payouts are more expensive than udemy courses. On the other hand, there is some abuse, where people get employed, especially in the public sector, to get the expensive (cisco, redhat, microsoft,...) certificates paid by the employer and then quit and do freelance work.

What incentive would there be for the employee to sign such an incredibly one sided contract when they could literally go to any other job?

JoshTriplett 3y ago
What incentive is there for the employee to sign a non-compete today that has $0/year compensation for the non-compete duration? However, another comment in this thread suggests that the law in question requires the compensation be the same as that of the job itself, which avoids this issue.
- tsimionescu 3y ago
  > What incentive is there for the employee to sign a non-compete today that has $0/year compensation for the non-compete duration? If it's the only way to get a job, that's the incentive. If the whole industry does it, or at least the vast majority, then workers don't have an actual choice.
  - JoshTriplett 3y ago
    That was the point of my comment. The comment I was replying to asked " What incentive would there be for the employee to sign such an incredibly one sided contract when they could literally go to any other job?", and my answer was to equate it to the incentive they have for signing existing even-more-one-sided non-competes.
fardo 3y ago
I think it’s more telling to look at the opposite question, “what leverage would employees have to turn such a term down, assuming such practices were considered ‘industry standard’ and all employers of note made sure to include it?” The answer in an environment with a ban on non-competes is “they’d either have legal recourse if someone tried to write them a contract with that term, or the term would be treated as non-enforceable and therefore harmless”. In the current environment, broadly speaking, most employees wouldn’t have leverage to turn such a term down, and generally don’t.
- somenameforme 3y ago
  It's not most employees, its the employees that an employer would even bother with a non-compete for. And many (most?) of this group would have the leverage to turn down an undesirable offer.
  - reaperman 3y ago
    Arby’s, Auntie Anne’s, Buffalo Wild Wings, Carl’s Jr., Cinnabon, Jimmy John’s, McDonald’s, and Subway have all made low-wage workers sign non competes.
    - randomdata 3y ago
      [flagged]
      - reaperman 3y ago
        Not necessarily true in many small towns across rural USA. If the major holding companies, e.g. Yum! Brands, McDonald's, etc. have all of their brands doing non-competes there might be only 2 independent fast-food joints within a 45-minute drive and few other jobs available.
        deleted 3y ago
        [deleted]
        randomdata 3y ago
        If that scenario ever played out, the workers would not be able to sign the agreement, so the employer would just have to concede. It would be far more costly to close down business (unless it was going to close anyway, in which case your comment is moot) than to take a stand and hire nobody. Bedsides, if we want to pretend that in your made up scenario that the workers did somehow end up signing the agreements, the employers would quickly run out of people to hire. A small town – one too far away from anything else for others to come in to work – and where everyone has legally taken themselves out of the job market is not a good place to be in as an employer. While employers can benefit from non-competes under certain conditions, they are not universally beneficial. You offer a fun thought experiment, but in reality a non-compete would not be offered here in the first place.
distortionfield 3y ago
In the analogy, I don’t think you could “literally go to any other” rocket science job or whatever. Even within my field, which is pretty broad in tech, it’s not that easy to switch jobs and I’ve had non-competes meaningfully interfere with new prospects because of the subject matter of the new opportunity.
- ghaff 3y ago
  The existence of a non-compete can be a real showstopper, especially at smaller firms even if the noncompete probably doesn't apply. I worked for a very small company for a number of years and our business office basically wouldn't touch anyone who had a noncompete of any kind.
xboxnolifes 3y ago
Same argument applies to the status quo. Zero pay for non-compete duration, just don't sign.
palemoonale 3y ago
> when they could literally go to any other job? Can they, though? This fight is moztly not about the spoiled tech sector.
Broken_Hippo 3y ago
Some fast food places require these. I'm pretty sure they aren't gonna get literally any other job. Sign it or no paycheck.

vlovich123 3y ago

It sounds like the requirement is that they pay to give you the same salary until the non compete expires.

realusername 3y ago

These laws in the EU countries that apply them are usually stating that the compensation has to be reasonable in regards to the salary the employee is normally getting and the potential loss of money created by the non-compete close so no, one dollar won't work. Also the non-compete clause need to actually protect some company knowledge, a non-compete clause on a bus driver will never be enforceable, regardless on how much extra the company pays.

ajsnigrutin 3y ago

In practice, noncompetes are rare, because noone wants to pay for someone who quit (or got fired). I personally know only one person with a current non compete, he worked at some niche company, that paid a few tens of thousands of euros for specialization in one specific niche branch and one specific software. He can still work in the same industry, just not with that specific software, and he got 75% of his previous paycheck for (i think) 18 months (the length of the noncompete) + of course the current paycheck he earns in a similar industry (with obviously a different software solution). The noncompetes are usually a case of having to invest a lot to educate a worker in the first place (again, niche stuff). General stuff (like a php programmer) would never get a noncompete, because the courses are cheap, anyone can learn that themself, and the monthly payouts are more expensive than udemy courses. On the other hand, there is some abuse, where people get employed, especially in the public sector, to get the expensive (cisco, redhat, microsoft,...) certificates paid by the employer and then quit and do freelance work.