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This is basically how it works in many finance jobs in NYC. Companies pay you for the duration of your non-compete normally at your base salary. The one catch

This is basically how it works in many finance jobs in NYC. Companies pay you for the duration of your non-compete normally at your base salary. The one catch is that 50%+ of your compensation in these jobs is typically a yearly bonus which is not paid during your non-compete period. But pretty much everyone knows this and socks away some money to limit the shock. The system works well both for employees and companies. There's some grumbling here and there but legislation like the one proposed in NYC would have needlessly broken a system that works pretty well.

mike_d 3y ago
> legislation like the one proposed in NYC would have needlessly broken a system that works pretty well. Makes sense. I assume there is a pool all the finance people pay into every month that covers all the people who don't work in finance and are subject to non-competes?
- JustLurking2022 3y ago
  No, it's up to the individual company to continue paying those employees.
  - foota 3y ago
    Parent is saying that noncompetes affect more than finance companies, and other companies may not pay for them in the same way.
- deleted 3y ago
  [deleted]
- JackFr 3y ago
  My (possibly incomplete) understanding of ‘gardening leave’ in finance is that it’s based on the idea of specific knowledge of trading positions or specific deal term sheets. It’s not that you can’t compete against us in general or use general techniques, but for 30/60/90 days you have specific knowledge of ongoing operations you can’t use. The hiring firm pays for, but cannot use, the hired person.
- deleted 3y ago
  [deleted]
lotsofpulp 3y ago
>There's some grumbling here and there but legislation like the one proposed in NYC would have needlessly broken a system that works pretty well. The system needs to be broken. What works well is paying and treating employees well enough so that they do not want to leave and go to a competitor, like businesses in California have to do.
- ffgjgf1 3y ago
  So workers is California never switch jobs and all work at the same company until retirement? > The system needs to be broken Why?
  - phantomathkg 3y ago
    Why protect the company who doesn't treat their employee well?
    - ffgjgf1 3y ago
      That seems tangential. There is nothing particularly wrong with non competes if the worker is properly compensated. I personally wouldn’t mind a 6 month NY hedge fund style gardening leave each time I switch to a different job.
  - jjav 3y ago
    > So workers is California never switch jobs and all work at the same company until retirement? The opposite, here in CA you can switch jobs at will because noncompetes are illegal. That's the primary reason I can't imagine working anywhere else.
- junofan 3y ago
  We’re talking about people who discuss their own compensation in terms of “bucks”—“10 bucks” is 10 million dollars. I don’t think people who sign these noncompetes for highly lucrative knowledge want the system to be broken, nor do they want to adopt California’s model.
hakdbha 3y ago
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logicchains 3y ago
>The system works well both for employees and companies. It's bad for the economy because it slows the circulation of ideas. A part of why there's been so much technological growth in Silicon Valley is because ideas could move between companies much faster.
- pcthrowaway 3y ago
  Yeah but try convincing the government to get rid of copyright, patents, and intellectual property laws for this same reason.
- CraigRo 3y ago
  I was given knowledge of specific trading strategies that, if taken to another company, would be competed away. Nobody would invest money in finding these if a competitor could buy all the IP by hiring a single employee
Broken_Hippo 3y ago
* would have needlessly broken a system that works pretty well.* For some people. For other people, they just can't work in the industry without fear of a lawsuit and don't get compensated at all. This is much more common when you start looking at lower paid people - sometimes fast food workers can't get another foodservice job because of these. The system works great for these companies because they make it harder for their employees to get better jobs. It doesn't work so well for the employees in these cases.
- chii 3y ago
  > sometimes fast food workers can't get another foodservice job because of these. there should not be any non-competes for job levels for which the skill is mostly commodities. Non-competes should be only for companies hiring a specific skill, and their working in said company would allow them to garner knowledge that can help a competitor - thus a non-compete. And it needs to be paid for. If a company is found to be abusing it to ensure their employee cannot be mobile (for wage competitiveness), then the law should go down hard on them.
- abduhl 3y ago
  You’re all over this thread making this statement about fast food workers having to sign noncompetes. I could find no stories of this practice happening currently, the most recent I could find is in 2016 and the article is about this practice ending in 2016. Which fast food chains in the year of our lord 2023 are putting noncompetes in their employee’s contracts?
  - hn_acker 3y ago
    I haven't found anything about fast food restaurants in 2023 either. However restaurants had been using non-competes in 2017 [1]: > While the prevalence of the practice may vary by region, one labor study published in April estimated that around one in six people working in food preparation or service jobs was bound by a non-compete agreement, according to a survey of nearly 67,000 workers. The news article is from 2021 [1], but the one page in the labor study mentioning food services uses data from 2017 [2]. (The paper is on SSRN and there is no open-access mark, but I was able to open the PDF. Check page 51 out of 61 if you're able to open it.) There's still a problem even if only non-fast-food restaurants use non-competes, and a ban on non-competes should cover all restaurants at the very least. Biden signed an executive order asking the FTC to consider banning non-competes, though the FTC hasn't actually passed anything about non-competes yet. [1] https://thecounter.org/biden-targeting-non-compete-agreements-executive-order-push-workers/ https://thecounter.org/biden-targeting-non-compete-agreement... [2] https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3814403 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3814403
nickjj 3y ago
> The system works well both for employees and companies. Taking a ~50% pay cut for potentially a year or longer doesn't seem like it works out too well for employees. If a finance job pays let's say 250k that means you're missing out on maybe 125k. Over 30 years at 5% that's $540,000 on that 125k. If your non-compete is for 2 years that's a loss of over a million dollars. If you can happily live on 50k a year that 2 year non-compete just cost you 20 years of financial freedom.
- kasey_junk 3y ago
  In my experience finance bonuses are much less guaranteed than in tech. You don’t calculate your bonus as part of your compensation until it happens, because it’s so performance based that “no bonus” has a reasonable chance of happening. So garden leave amounts to a bad performance year without having to work, which is a pretty reasonable trade off. At least it always was for me.

mike_d 3y ago

> legislation like the one proposed in NYC would have needlessly broken a system that works pretty well. Makes sense. I assume there is a pool all the finance people pay into every month that covers all the people who don't work in finance and are subject to non-competes?

JustLurking2022 3y ago
No, it's up to the individual company to continue paying those employees.
- foota 3y ago
  Parent is saying that noncompetes affect more than finance companies, and other companies may not pay for them in the same way.
deleted 3y ago
[deleted]
JackFr 3y ago
My (possibly incomplete) understanding of ‘gardening leave’ in finance is that it’s based on the idea of specific knowledge of trading positions or specific deal term sheets. It’s not that you can’t compete against us in general or use general techniques, but for 30/60/90 days you have specific knowledge of ongoing operations you can’t use. The hiring firm pays for, but cannot use, the hired person.
deleted 3y ago
[deleted]

lotsofpulp 3y ago

>There's some grumbling here and there but legislation like the one proposed in NYC would have needlessly broken a system that works pretty well. The system needs to be broken. What works well is paying and treating employees well enough so that they do not want to leave and go to a competitor, like businesses in California have to do.

ffgjgf1 3y ago
So workers is California never switch jobs and all work at the same company until retirement? > The system needs to be broken Why?
- phantomathkg 3y ago
  Why protect the company who doesn't treat their employee well?
  - ffgjgf1 3y ago
    That seems tangential. There is nothing particularly wrong with non competes if the worker is properly compensated. I personally wouldn’t mind a 6 month NY hedge fund style gardening leave each time I switch to a different job.
- jjav 3y ago
  > So workers is California never switch jobs and all work at the same company until retirement? The opposite, here in CA you can switch jobs at will because noncompetes are illegal. That's the primary reason I can't imagine working anywhere else.
junofan 3y ago
We’re talking about people who discuss their own compensation in terms of “bucks”—“10 bucks” is 10 million dollars. I don’t think people who sign these noncompetes for highly lucrative knowledge want the system to be broken, nor do they want to adopt California’s model.

hakdbha 3y ago

[dead]

logicchains 3y ago

>The system works well both for employees and companies. It's bad for the economy because it slows the circulation of ideas. A part of why there's been so much technological growth in Silicon Valley is because ideas could move between companies much faster.

pcthrowaway 3y ago
Yeah but try convincing the government to get rid of copyright, patents, and intellectual property laws for this same reason.
CraigRo 3y ago
I was given knowledge of specific trading strategies that, if taken to another company, would be competed away. Nobody would invest money in finding these if a competitor could buy all the IP by hiring a single employee

Broken_Hippo 3y ago

* would have needlessly broken a system that works pretty well.* For some people. For other people, they just can't work in the industry without fear of a lawsuit and don't get compensated at all. This is much more common when you start looking at lower paid people - sometimes fast food workers can't get another foodservice job because of these. The system works great for these companies because they make it harder for their employees to get better jobs. It doesn't work so well for the employees in these cases.

chii 3y ago
> sometimes fast food workers can't get another foodservice job because of these. there should not be any non-competes for job levels for which the skill is mostly commodities. Non-competes should be only for companies hiring a specific skill, and their working in said company would allow them to garner knowledge that can help a competitor - thus a non-compete. And it needs to be paid for. If a company is found to be abusing it to ensure their employee cannot be mobile (for wage competitiveness), then the law should go down hard on them.
abduhl 3y ago
You’re all over this thread making this statement about fast food workers having to sign noncompetes. I could find no stories of this practice happening currently, the most recent I could find is in 2016 and the article is about this practice ending in 2016. Which fast food chains in the year of our lord 2023 are putting noncompetes in their employee’s contracts?
- hn_acker 3y ago
  I haven't found anything about fast food restaurants in 2023 either. However restaurants had been using non-competes in 2017 [1]: > While the prevalence of the practice may vary by region, one labor study published in April estimated that around one in six people working in food preparation or service jobs was bound by a non-compete agreement, according to a survey of nearly 67,000 workers. The news article is from 2021 [1], but the one page in the labor study mentioning food services uses data from 2017 [2]. (The paper is on SSRN and there is no open-access mark, but I was able to open the PDF. Check page 51 out of 61 if you're able to open it.) There's still a problem even if only non-fast-food restaurants use non-competes, and a ban on non-competes should cover all restaurants at the very least. Biden signed an executive order asking the FTC to consider banning non-competes, though the FTC hasn't actually passed anything about non-competes yet. [1] https://thecounter.org/biden-targeting-non-compete-agreements-executive-order-push-workers/ https://thecounter.org/biden-targeting-non-compete-agreement... [2] https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3814403 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3814403

nickjj 3y ago

> The system works well both for employees and companies. Taking a ~50% pay cut for potentially a year or longer doesn't seem like it works out too well for employees. If a finance job pays let's say 250k that means you're missing out on maybe 125k. Over 30 years at 5% that's $540,000 on that 125k. If your non-compete is for 2 years that's a loss of over a million dollars. If you can happily live on 50k a year that 2 year non-compete just cost you 20 years of financial freedom.

kasey_junk 3y ago
In my experience finance bonuses are much less guaranteed than in tech. You don’t calculate your bonus as part of your compensation until it happens, because it’s so performance based that “no bonus” has a reasonable chance of happening. So garden leave amounts to a bad performance year without having to work, which is a pretty reasonable trade off. At least it always was for me.