4 ms·

> Firstly, it seems insane that unpaid non-competes are legal at all, to start with. Also, seeing them applied to very junior level and even hourly paid roles

> Firstly, it seems insane that unpaid non-competes are legal at all, to start with. Also, seeing them applied to very junior level and even hourly paid roles is overly onerous. They're not. I mean they're legal in that you can write one and ask someone to sign it. But good luck getting it enforced! I went to a college where people typically went on to finance roles and strategy consulting. I myself worked at Bain for a few months before deciding it was not for me. Our corporate law professor told us the same thing. She was head general counsel at an aerospace company. She said ignore all non-competes and don't accept payment for them. If there's no payment in a contract, there's no consideration. A non-compete has to be signed upon resignation. So just don't take the resignation bonus. Moreover, it doesn't really matter because no one is going to put someone on the government dole in order to enforce a non-compete. It's safe to ignore in almost all circumstances. Why would a state possibly take on yet another unemployment figure in order to protect a private company's interest? They want the tax money. Non-solicitation is different. IANAL, but take that as you will. I've followed this advice religiously and nothing happens. Most companies will be weirded out when you don't take the resignation bonus, but as long as no money changes hands, they have no power over you.

steveBK123 2y ago
Fair. Something that is common practice but not going to hold up in court are uhh quasi-legal. A problem is that if you are moving within an industry that enforces non-competes they all generally respect each others for fear of invalidating their own. They also tend to know the terms of each others contracts as well so you can't exactly bluff your way through. So your new prospective employer will not do anything that is seen as soliciting you to break the prior contract. Also at the low end it works especially well because you won't take the risk of court / having to hire a lawyer.
ghaff 2y ago
One of the issues is that many small firms are just going to pass if you have a non-compete. I guess you can lie and just say you don't but that's probably not a great way to start a new employment relationship. I worked for a very small firm and someone having a non-compete was just a hard pass from our COO. Just too much risk.
tzs 2y ago
That is true now due to the FTC ban on non-competes, but it was not true before that. The enforceability varied widely from state to state. Here's a table showing how it was in 2016 [1]. My guess is that your corporate law professor was talking about enforceability in the specific state you were in. Also, most I've seen were required to be signed when employment began, not when employment ended. [1] https://beckreedriden.com/50-state-noncompete-chart-2/ https://beckreedriden.com/50-state-noncompete-chart-2/
- anon291 2y ago
  Overly specific non-competes are just not enforceable. Just tell the judge you're going to go on unemployment and medicaid (You can, since you have no income), and they'll quickly re-arrange things to make it worthwhile. Why would a state possibly do this? Going back to your list. Look at the 'protected activities'. Simply being employed in the field is rarely one of them. Yes, you can't take clients or poach employees. Some might require repayment for training, etc. But no one can make you unemployed and destitute for it. Why would any state want that? The key word in many of the tables is 'not against public policy', which is what it means when states don't want people to start taking welfare when not able to work. That being said I am glad states are now pre-emptively fining businesses that attempt to use these. It shouldn't be up to employees ignoring what they presume to be valid contracts.

steveBK123 2y ago

Fair. Something that is common practice but not going to hold up in court are uhh quasi-legal. A problem is that if you are moving within an industry that enforces non-competes they all generally respect each others for fear of invalidating their own. They also tend to know the terms of each others contracts as well so you can't exactly bluff your way through. So your new prospective employer will not do anything that is seen as soliciting you to break the prior contract. Also at the low end it works especially well because you won't take the risk of court / having to hire a lawyer.

ghaff 2y ago

One of the issues is that many small firms are just going to pass if you have a non-compete. I guess you can lie and just say you don't but that's probably not a great way to start a new employment relationship. I worked for a very small firm and someone having a non-compete was just a hard pass from our COO. Just too much risk.

tzs 2y ago

That is true now due to the FTC ban on non-competes, but it was not true before that. The enforceability varied widely from state to state. Here's a table showing how it was in 2016 [1]. My guess is that your corporate law professor was talking about enforceability in the specific state you were in. Also, most I've seen were required to be signed when employment began, not when employment ended. [1] https://beckreedriden.com/50-state-noncompete-chart-2/ https://beckreedriden.com/50-state-noncompete-chart-2/

anon291 2y ago
Overly specific non-competes are just not enforceable. Just tell the judge you're going to go on unemployment and medicaid (You can, since you have no income), and they'll quickly re-arrange things to make it worthwhile. Why would a state possibly do this? Going back to your list. Look at the 'protected activities'. Simply being employed in the field is rarely one of them. Yes, you can't take clients or poach employees. Some might require repayment for training, etc. But no one can make you unemployed and destitute for it. Why would any state want that? The key word in many of the tables is 'not against public policy', which is what it means when states don't want people to start taking welfare when not able to work. That being said I am glad states are now pre-emptively fining businesses that attempt to use these. It shouldn't be up to employees ignoring what they presume to be valid contracts.