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US Judge Strikes Down Ban on Worker 'Noncompete' Agreements
- gm678 2y agoDupe of: https://news.ycombinator.com/item?id=41304691 https://news.ycombinator.com/item?id=41304691 Prior discussion of context: https://news.ycombinator.com/item?id=40136010 https://news.ycombinator.com/item?id=40136010
- bhaktatejas922 2y agowhat does the FTC have to do with non competes? correct ruling
- i_got_censored 2y ago[flagged]
- __MatrixMan__ 2y agoMoney isn't speech. Money is violence that got too old to carry a sword anymore. It's about compulsion, not expression.
- maerF0x0 2y agoThe parent commenter is referring to "Citizens United" ruling https://en.wikipedia.org/wiki/Citizens_United_v._FEC https://en.wikipedia.org/wiki/Citizens_United_v._FEC
- School-Cotton 2y agoRegardless of whether “money is a form of free speech” or not, nothing in the constitution prevents you from signing contracts that limit your free speech, directly. It’s totally legal to agree to a contract not to say certain things in public, for example.
- hajile 2y agoThe only way a noncompetent should be legal is if full compensation is given during that time period.
- thomascgalvin 2y agoPlus bonus compensation for the loss of skills while you aren't working.
- snapplebobapple 2y agoNah, it should be the higher of current pay or potential pay so that i can offer jobs at ridiculous salaries to my competitor's workers and stick my competitor with huge bills if they choose not to waive the non compete. Weaponize this the other way to end the utter stupidity
- hajile 2y agoI avoided stating what the full compensation should be. In my world, if your skills become more valuable or a competitor were willing to pay more than your current compensation, the current company should be given the option of either matching that compensation or releasing you from the noncompete.
- rubyfan 2y agoThis. Companies typically get these non-compete and non-solicit clauses in place when you accept RSUs or other equity award. In some cases they don’t even vest for a few years or could be worth only a few thousand dollars. It’s hard for me to get my head around the fact that nearly no meaningful consideration is actually given to employees when in fact the potential down side of loss of income is so huge when you are prohibited from working in your field for a year or more. The deal is absurd and should be prohibited. If there is a real threat of damage to a company’s competitive position then the company should pay you to stay on the sidelines, instead companies are stifling individuals ability to grow and earn an income.
- neilv 2y agoI think you're still giving too much away: you're saying that a past employer has the right to block you from other employment opportunities (so long as they pay some predetermined amount). Instead, how about get rid of noncompetes entirely. If someone doesn't want you to go to be employed by a competitor of theirs, they'll have to make you a deal (employment, or other contract) that you'll accept at that time. No past noncompete clause in an imbalanced power dynamic required. (Side note: This would also be incentive for companies to go back to inspiring loyalty, by example. And not hiring mercenaries who will hop at the next better deal.)
- burningChrome 2y agoI live in a "right to work" state. As a young corporate go getter, I signed a few non-compete contracts. In two cases, I was lured away by a competitor. In both cases, I tried (unsuccessfully) to hide where I was going. My old companies found out and tried to enforce the non-compete as punishment. Both times, my attorney filed the necessary paperwork, we showed up in the first case and my boss was threatening me outside in the lobby before we went in, telling me I'll never work in this city again. We go in and judge basically laughed at the company and tossed the case immediately. I don't remember the slew of cases he listed, but the message was clear. You cannot keep someone from working in their chosen field simply because you don't like your competitor. Since no laws were broken and I left with literally nothing but the suit I wore in on my first day - they didn't have any reason to keep me from working in my field. The other case went the same way a five or six years later.
- mulmen 2y agoRight to work is an anti-union policy. You probably mean at-will. Meaning your employment can be terminated “at will” by your employer or by you.
- reaperman 2y agoYour “or by you” is superfluous. Just-cause contracts in the only state which requires them for most general employees (Montana) only limit what the employer can do, not the employee. The vast majority of just cause contracts allow the employee to leave whenever they want. So “at will” also has to do the anecdote.
- candiddevmike 2y agoYou're fortunate you could afford an attorney and successfully argue your case. Most of the folks under a non compete (like hourly restaurant workers!) probably can't do that.
- dmix 2y agoAre they ever really enforced? I've heard it's almost entirely an intimidation thing like cease and desist.
- deathanatos 2y ago> "The Commission’s lack of evidence as to why they chose to impose such a sweeping prohibition ... instead of targeting specific, harmful non-competes, renders the Rule arbitrary and capricious," wrote Brown All non-competes are harmful, end of story. Link to the ruling: https://assets.bwbx.io/documents/users/iqjWHBFdfxIU/rj8_52.B4gYs/v0 https://assets.bwbx.io/documents/users/iqjWHBFdfxIU/rj8_52.B... (…though this PDF is kinda horrible, since it seems to somehow not be searchable at all, but it's the only one I've found in like 7 different news sites, all but one of which can't cite their sources…)
- diab0lic 2y ago> All non-competes are harmful, end of story. Ah. How could I be so foolish as to think there might be some nuance to the situation! For what it’s worth a lot of friends in finance are/were bummed about how this law might affect gardening leave. [0] [0] https://finance.yahoo.com/news/whether-wall-street-garden-leaves-survive-noncompete-ban-is-an-open-question-080016698.html https://finance.yahoo.com/news/whether-wall-street-garden-le...
- threatofrain 2y agoThat does sound anti-competitive. Imagine if Google poaches hot people in industry and then just sits on them during a critical market time, doing nothing, because they don't have any particular work for them, they just don't want them working for the competition. Those garden contracts sound like a variation of the same idea. Anyways, if I understand FCC's position right, they also had nuance for specific non-competes.
- bobthepanda 2y agoat least with garden leave the person is at least getting compensated. it's substantially better than a minimum wage worker at ~~Subway~~ Jimmy John's being told they're not getting paid and they also can't make sandwiches for six months.
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- chx 2y ago[flagged]
- dgfitz 2y agoI don’t like or support trump. A president can nominate anyone and as many anyones as they want for a judicial position. Congress says yes or no to the appointment, not the sitting president. Making things about trump even when they aren’t is getting tired.
- linotype 2y agoPoint out cases where appointments made by democrats are hostile to workers then.
- wavemode 2y agoTeamsters lost 8-1 in the Supreme Court just a year ago[0], for example. What are you even arguing here? That a judge is appointed by a Democrat means they rule in favor of unions at all times? That wouldn't be virtuous, that would be corruption. I'm personally glad the world is not as black and white as you seem to see it. [0]: https://en.wikipedia.org/wiki/Glacier_Northwest,_Inc._v._Teamsters https://en.wikipedia.org/wiki/Glacier_Northwest,_Inc._v._Tea...
- dgfitz 2y agoNobody wants facts, just things that fit their current worldview narrative. I dare say, if we fix this thought process, we could fix a lot of really significant things.
- colmmacc 2y agoOnly the Senate approves judicial appointments. The Presidency and the Senate are the least representative elected institutions. Trump lost the popular vote quite considerably, twice, and the Senators who approved his appointments represent an even smaller minority of the USA. It's hard to paint judicial appointments as democratically representative. Beyond that, in most advanced democracies, it is a norm that judicial appointments are apolitical. Often there are non-partisan judicial appointments commissions and other processes used to suggest nominations, and the norm is that these processes are followed.
- paxys 2y ago> A federal judge in Texas Surprise, surprise
- linotype 2y ago> "Today's decision does not prevent the FTC from addressing noncompetes through case-by-base enforcement actions," Graham said in a statement. Oh yeah, any time you have to deal with a non-compete, just ring up the FTC. Because everyone has the resources to litigate. Ridiculous.
- karaterobot 2y agoNote that the ruling was ostensibly about whether the FTC had the authority to ban noncompete agreements across the board, it was not per se a ruling on whether noncompetes are good, bad, scary, awesome, legal, or illegal.
- bigstrat2003 2y agoIt's a very good point to keep in mind. I think that non-compete agreements should be illegal, but that doesn't mean the FTC's ban was the right way to accomplish it. Unfortunately I don't have the legal knowledge to evaluate whether the judge ruled well on this case.
- ralferoo 2y agoIt's interesting how many US people think that non-compete agreements are fair. In the EU and UK, the general rule is that you employment contract ends as soon as the company stops paying you. Once you have left the company, you cannot be bound by the old employment contract. Some companies choose to pay gardening leave, but in practice you cannot be forced to accept it for any longer than your agreed notice period, and while there might be grounds to sue for breach of contract if you just walked away completely, in general a company can't force anyone to work somewhere if they don't want to. The protections that the non-compete are intended to provide are already provided through other means that will almost certainly apply - things like NDAs or IP theft (which would include knowingly transferring proprietary secrets or processes). Sure, it'd take more time in discovery to prove such an issue, but in general employee protections are considered more important to society than commercial concerns. On the other hand, someone found guilty of IP theft or breaking an NDA will probably find getting a similar level job very hard in the future, because their reputation would be ruined.
- AtlasBarfed 2y agoExactly you want to enforce rights after our term of employment is done Then fucking pay me, naked capitalism
- toomuchtodo 2y agoThe whole point is to not pay you, to bind you at no cost. It’s formalized wage theft under the guise of corporate protection. Anyway, this action will certainly help come Election Day. Maybe the Democrats will mention it during their convention, good PR for them.
- ars 2y agoUsually they do in fact pay, they want you to sign in exchange for severance pay. You don't want to sign, then don't. They can't force you. Or you sign in advance, in exchange for what you feel is good enough compensation, so again, they are paying you.
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- benreesman 2y agoYou lose again @sama! The noose is closing.
- djsavvy 2y agoPerhaps I'm misguided, but I don't see how this is bad for Sam Altman. If anything, it's probably a small win.
- benreesman 2y agoThe OpenAI contracts are nine kinds of illegal in countless jurisdictions and a source of constant scandal with an emphasis on compete and disclose rights. Whatever happens when you mix Altman, Summers, and Simo? It’s a biohazard.
- benreesman 2y agoI’ll stop trying to put @sama in prison when I’m dead. Long after OpenAI is a hole in the ground where a hundred billion dollars used to be I’ll never, ever stop bringing him to justice.
- zooq_ai 2y agoUnpopular opinion, but this is great. FTC has been overreaching the past 4 years and it needed proper checks and balances from the court. As the Judge mentioned, there are specific cases where Non Compete doesnt make sense and there are cases where it does especially if you are paid highly for the specific reason that you are long term investment for that company. Else trade secrets can easily be hired away from competition
- illini1 2y agoI think you’re misunderstanding the original FTC Noncompete Rule Ban. It would currently apply to employers other than senior executives to prevent trade secrets to be hired away. Additionally, they provide alternatives that won’t allow for trade secrets to leave a company such as NDA’s, which is what most non-competes have to prevent dissemination of trade secrets.
- tchock23 2y agoFood service workers can easily fight this with their significant resources, right? NDAs already cover trade secrets.
- deleted 2y ago[deleted]
- pitterpatter 2y ago>Else trade secrets can easily be hired away from competition Misappropriating trade secrets is already a crime in several states and federally. >you are paid highly for the specific reason that you are long term investment for that company. Sounds like the company then should make staying long term an attractive proposition. I mean I understand, but "investment" usually implies some amount of risk.
- banana_feather 2y agoThere's just no way to spin this as the proper workings of an elegant system of checks and balances when time and time again these decisions about federal regulatory issues or other matters of national importance are nakedly forum (sometimes judge) shopped into Texas district courts. The debacle with Kacsmaryck and the Fifth Circuit's dismissal of the randomization guidance from the judicial conference is an absolute disgrace. Until these kinds of cases are assigned to a random district court, nobody's fooled by this.
- suraj_sindhia 2y agoIMO negative of negative is a less efficient comm strategy. For example, I'd word this as US Judge allows workers to compete with ex-employers or something similar.
- GeneralMayhem 2y agoNo, it's a triple-negative. Judge struck down (1) ban (2) on non-(3) competes. As a result of this ruling, non-competes are now enforceable; workers are not allowed to compete with ex-employers.
- onlyrealcuzzo 2y agoOn the Federal level. If you live in a state that banned non-competes (California, Illinois, etc), your employer can try to sue you, but it won't go anywhere.
- toomuchtodo 2y agohttps://eig.org/state-noncompete-map/ https://eig.org/state-noncompete-map/ Most surprising: Oklahoma and North Dakota have full bans. TIL.
- forrestthewoods 2y agoCongress should pass a law. Easy win.
- yalogin 2y agoThis is Texas so I am inclined to think the judge is a political hack installed by someone to issue judgements that are paid for. As much as I don’t want to, after seeing the recent Supreme Court and other rulings, this is the first thought that came to mind.
- disillusioned 2y agoHe's a Trump appointee, for what it's worth.
- yalogin 2y agoAh so my intuition is right.
- disillusioned 2y ago*She
- jellicle 2y agoWell, that ought to reduce tech worker pay another 10% or so.
- tempeler 2y agoAnother hypocrisy of people who advocate liberal and free economy. Many of them criticize the state because it is a monopoly and claim that the state prevents competition. However, they try to do the same thing themselves.
- bionhoward 2y agoI personally believe the FTC noncompete rule is not strong enough, rather than too strong, because it doesn’t protect the public from customer noncompete clauses like those of closed AI companies like OpenAI, Anthropic, Microsoft, Google, and even Mistral’s platform side. They learn from us and then prohibit customers from using output to improve our own models. This creates big safety issues as near misses cannot be used to instruct future models.
- chairmansteve 2y ago[flagged]