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I think the Chinese law is effective in this regard: in order to maintain any non-competition agreement, the company must continue to pay you a monthly compensa
by tianqi 1y ago
I think the Chinese law is effective in this regard: in order to maintain any non-competition agreement, the company must continue to pay you a monthly compensation amount equal to 30% of your total monthly income when you were at the company. Whenever the payment stops, the non-competition agreement is automatically void.
- coderatlarge 1y agocan you choose to refuse these payments to avoid the responsibility?
- whiplash451 1y agoI’ve seen this is France and UK but it lasts only a few months and no you can’t refuse the payment - but the company can refuse to pay and set you free.
- v5v3 1y agoIn UK it's called gardening leave. A period when you are still employed but not at work and can't join another company without agreement. Uk law generally is that non compete clause is ok, if the length of time is reasonable. But you can't stop a person with a trade from applying that trade unreasonably. Most tend to be 3-6 months. Normally it's to stop a person leaving from stealing clients.
- kelnos 1y agoUS finance has the same thing, and also calls it gardening leave. In our case I think it's reasonably common for it to be as long as a year. Downside for finance folks is that the usually make a decent chunk of their compensation through bonuses, not their base salary. So their gardening-leave pay ends up being quite a pay cut, and while they're "gardening", they're out of the game for a year and their skills/knowledge becomes a little out of date.
- throwaway2037 1y ago> reasonably common for it to be as long as a year Absolutely not. For ibanks, less than VP is one month. VP/ED/MD is three months. Sometimes it is six months for an MD, but that is extreme. The longest that I ever heard was someone who left Citadel as a portfolio manager had a TWO year gardening leave. How can that make any financial sense for Citadel? Before the HN crowd jumps in about that Citadel example being "reasonably common": There are probably less than 1,000 people globally who would fall under such an extreme contract.
- coderatlarge 1y agofor senior people whose alignment an employer needs to maintain after separation, it seems a lot more common to use some sort of advisory or consulting contractual relationship to keep them close as long as necessary…
- ivan_gammel 1y agoI know an example of a garden leave for 2 years for an engineer working on trading algorithms. Maybe he falls into that 1000 people category (PhD in math).
- throwaway2037 1y agoExactly: That person falls into the 0.01% of the finance industry.
- JoshTriplett 1y ago> Normally it's to stop a person leaving from stealing clients. I have a lot more sympathy for "you may not take clients with you" clauses than for "you may not work in the same industry" clauses.
- 1vuio0pswjnm7 1y agoThere is a difference between non-solicitation and non-compete. In the US, the former obligation might be acceptable while the later might not.
- throwaway2037 1y agoThe "non-solicitation" agreements are so stupid. There is a cottage industry in headhunters where you tell your next employer who you want to recruit, then they ask a 3rd party recruiter to go track down that person after X months... and invite them to interview. I have seen it so many times in career.
- ghaff 1y agoIt's definitely fuzzy. I mean, someone like an account rep or a financial advisor (and their clients) can't unknow somebody. So even if someone isn't taking their client list and calling/emailing everyone, there's inevitably going to be an element of client "poaching" so long as they're still in the same business.
- coderatlarge 1y agofyi there are clauses in contracts that try to control the use of residuals in “unaided memory” , trying to refer to stuff you just happen to know by dint of having been exposed to them, even though they’re in no explicit notes.
- hmottestad 1y agoWould be very interested to read more about that. Do you have a link?
- marcosdumay 1y agoOr the Brazilian law, that requires 100% compensation, and puts the onus on the company to prove that the non-compete is necessary before it can be enforced. If you ever see one of those contracts here, it's usually usually for a very reasonable situation and a well paid position.
- benjamincburns 1y agoI generally ask for 150% - usually on the expectation that it’ll make the non-compete go away. It’s not at all a ridiculous ask, either. I’ve made a career out of going after high-impact roles in whatever is the fastest growing area of technology at the time. The non-compete isn’t just asking me to sacrifice the income from my next role, it’s asking me to sacrifice the experience as well. It also limits my ability to renegotiate comp while on the job, because they know your BATNA isn’t to just go get a better offer from a competitor. If a company wants me to give all of that up, I’m sure as shit not doing it just for the privilege of working for them.
- margalabargala 1y agoIf it's 100%, I'd rather the noncompete not go away. If I am able to live off the salary, why not take the free paid vacation if it's offered? I can spend the time doing and learning things for myself, rather than the company.
- marcosdumay 1y agoIn principle, if you are changing jobs, it's because you found one with something like a raise or better working conditions. Being unable to look for those has a cost.
- onion2k 1y agoImagine if Tesla had been able to stop Andrej Karpathy working at Open AI just by spending 1/3 of what his salary was when he was on Autopilot. That sounds like a terrible idea.
- idkfasayer 1y ago[dead]
- Spivak 1y agoI mean under the current rules they could have stopped him for 0/3 of his salary.
- kragen 1y agoWasn't he in California? If so, they couldn't have.
- bravesoul2 1y agoI'm betting AK was clued up and would negotiate that out. He was hot property from the get go.
- v5v3 1y agoThat's a terrible law. 30% of your total monthly income as it was, when you are likely leaving for more money at a competitor or to start your own company...
- taneq 1y agoSo do it four times and retire. Hmm… in four different industries, though… Yeah okay there might be some issues.
- trhway 1y agoI'd think it isn't about employee getting 30%. It is about the companies would be paying money really for nothing in most cases, and thus forcing the companies to avoid blanket enforcement (and unpredictable at that as it avoids the company having the free option of coming after you nilly-vanilla when they feel like it years later) - and such avoidment is great for innovation industry-wise. If your confidentiality agreement is really meaningful, then probably you can negotiate much better payment.
- tianqi 1y agoI believe this is the interpretation that most closely reflects the intent of the legislation. This is not a form of income, but rather a means of discouraging companies from acting recklessly.
- muzani 1y agoBad if you leave for a competitor. I've never really done so. Fintech, social media, recipes, bidding, e-commerce, fashion, saas, mental health, games, and so on. There's just a wide range of fields you can go into that don't compete and still use the same skills. Unless the previous employer is slow and incompetent, if you've done good work, they'd probably be ahead and better funded. I'd take the money.
- IshKebab 1y agoOnly if you're a generalist. What if you're an expert on some specific tech? I mean I would probably take the money and temporarily switch fields too but I don't think it's quite that simple for a lot of people.
- aforwardslash 1y agoIn Portugal is generically the same - non-compete clauses require the payment of a monthly compensation for the duration of the non-compete clause; If non-compete clause exists, but no specific compensation is specified in the contract, the employee may demand the full salary during the specified period (I know at least one case).
- schmichael 1y agoOregon at least makes it 50% IIRC. Anything less than 100% seems useless though. Usually when taking a new job in the same industry you expect a pay bump, so even a 100% rate is likely leaving money on the table.
- deleted 1y ago[deleted]
- Sharlin 1y agoWell, yes, but you don't have to work.
- ghaff 1y agoFor a lot of people, taking 50% of base salary (absent bonus/RSU/etc.) isn't very practical. Even if there's some alternative like Starbucks.
- hippari2 1y agoMore like you are not allowed to work. Loss of work experience, loss network, not even accounting for inflation.
- bigiain 1y agoI would welcome an opportunity to walk away from the entire tech industry with a guaranteed-for-life income, allowing me to pursue dreams without them needing to be financially viable. Setting up as a high end timber boat builder without ever needing to turn a profit while still having the same income I do now is something I'd jump at immediately.
- jaggederest 1y agoPlus, nobody says you can't work in any other field you like, just not whatever you used to do. Net present value of 50% of salary for the next 30 years is something like a million dollars for most HN commenters, I'd guess.
- jjallen 1y agoThen the employee is only making 30% and presumably not working elsewhere or that would defeat the purpose. So how is this a good approach? I would get 80% or more but don’t see how this is effective.
- helpfulclippy 1y agoThis is the first I’ve heard of this so I’m just rolling it around… but I suppose this would make it cost-prohibitive for companies to insist on non-competes unnecessarily. As the employee, it’s still clearly a bad position for me unless I can find a non-competing job that pays me at least 70% plus whatever pay bump I’d expect for career advancement.
- scarby2 1y ago> unless I can find a non-competing job that pays me at least 70% plus whatever pay bump I’d expect for career advancement. This clearly depends on your role and industry. I can write code in a bunch of industries I've actually never had 2 jobs in the same industry. If I were an oil pipeline engineer it would be different.
- neximo64 1y agoThat actually sounds bad, since after the payments end you can basically speak about IP and its as if you're encouraged to do so after payments stop.
- Buttons840 1y agoSpeaking of China: The free movement of workers is important to having an efficient economy. The US could do a lot better here; we have bad safety nets, non-competes, "trade-secrets". When workers move freely and spread trade-secrets, this results in all companies performing better, on average. This is good for everyone except the lazy owners who would lose money to those who perform better. While the US worries about limiting the free movement of workers, non-competes, and "trade-secrets", China is going to build approximately a billion homes and factories. If we take the "free" out of "free market", then we're just a market, and far from the most efficient one.
- Craighead 1y ago[dead]
- galuggus 1y agoU.S doesn't have a hukou system.
- roncesvalles 1y agoI think the lack of universal healthcare is a very significant limiter to freedom of job movement in the US, especially if your whole family depends on the health insurance you get from work.
- scarface_74 1y agoYou mean a billion homes that no one lives in and ends up being a Ponzi scheme? https://www.newsweek.com/what-happened-china-ghost-cities-2047985 https://www.newsweek.com/what-happened-china-ghost-cities-20...
- nswest23 1y agoI guess corporations don't write the laws in China?