5 ms·

Noncompetes are a scourge. If your company requires them to survive, then it deserves to fail. Any argument in favor of them can be trivially nullified by point

Noncompetes are a scourge. If your company requires them to survive, then it deserves to fail. Any argument in favor of them can be trivially nullified by pointing at California's unrivaled economic success, "despite" (or perhaps in part because of) its complete ban on noncompetes dating back to its founding. Indentured servitude has no place in the modern world.

echelon 1y ago
> Noncompetes are a scourge. I can see why small companies might want non-competes to prevent their employees from being poached by hyperscaler monopolies. If non-competes continue to exist, they should be pared down to small-scoped work descriptions only, eg. not "AI" broadly, but rather something like "AI diffusion for skeletal movement". The non-competes shouldn't have durations longer than a year, and the companies enacting the contract should be required to pay departing employees a salary (or some large percentage of a salary) if they want to enforce the non-compete. Non-competes should also only be used to prevent employees from joining larger companies, not smaller ones. And they should never prevent work at a startup or new venture.
- candiddevmike 1y ago
  If an employee was worth X and the company made them worth Y, they should pay them Y to continue having them as an employee. Anything else distorts the labor market. Now having to pay back training or education if you leave before Z months seems reasonable.
- ryandrake 1y ago
  I take issue with the idea that I, as an employee, may be "poached". I am not a deer or wild boar, owned by a feudal lord, and protected on his land from hunters. I should be free to have agency and enter into business arrangements with anyone I choose. Just because my company "invested" money into my growth/education/training, doesn't mean they should own me for some period of time while they figure out how to make that investment pay off. Let's stop using this word poached. It's not analogous to an employer/employee relationship.
  - derektank 1y ago
    I don't actually disagree but it's worth pointing out the US government, which values freedom of association as a bedrock principle, itself takes the view that, if they invest in your education and training, they "own" you for a period of time. Military servicemembers are required to sign service commitments both when they enter the service, but also upon completion of training and the length of the commitment is tied to the length/intensity of training. Air Force pilots are usually committed to serving on active duty for up to 12 years, due to the value of their training and many immediately jump ship to private industry after reaching that point. Personally, I think banning non-competes probably does reduce the amount of investment in education that companies make, but it's a tradeoff worth making to improve overall labor market efficiency and better guarantee personal freedom.
    - OkayPhysicist 1y ago
      > the US government, which values freedom of association as a bedrock principle That's fresh. If your employees immediately jump ship after training, it means you're underpaying them, or mistreating them, or, in the case of the US military, probably both.
    - d4mi3n 1y ago
      > Personally, I think banning non-competes probably does reduce the amount of investment in education that companies make, but it's a tradeoff worth making to improve overall labor market efficiency and better guarantee personal freedom. I largely work for Californian companies and by and large the benefits have been excellent. While I wish more money was put into training overall, I feel this is driven more by short term financial planning than things like non-competes. What have you seen or encountered that led you to the conclusion that non-competes would lead to more educational investment? My assumption is that they’re more useful when a non-compete reduces the amount of people with key skills from a market—it seems counter-intuitive to do this and then disseminate those skills via training programs.
    - oooyay 1y ago
      > Military servicemembers are required to sign service commitments both when they enter the service, but also upon completion of training and the length of the commitment is tied to the length/intensity of training. Air Force pilots are usually committed to serving on active duty for up to 12 years, due to the value of their training and many immediately jump ship to private industry after reaching that point. You actually can't speak about this as a whole because there's various programs that involve education and they all have nuances. The one people run into the most is the GI Bill which is not and has not been taxpayer funded. It's self-funded by veterans and unlocked by 4 years of active service or 8 years of reserve service. You unlock it by paying into it. The next most well known program is the Naval Medical Corps and Naval JAG Corps which offer to put already qualified candidates the rest of the way through school or pay their school bills for four years of honorable service. It's probably the single most high value deal the military offers. The last is aviation school which (usually, depending on what you get chosen to fly) has very little overlap with civilian aircraft. Pilots usually have a minimum service of 10 years but they're not exactly locked into being a pilot. For instance, Marine Corps pilots are trained infantry officers so they can go on to serve in the infantry as an Air Officer. Other than the GI Bill scenario in each scenario you're paid a six digit salary and largely treated like a god in the military due to rank.
- lostdog 1y ago
  Ok, but let's make the non-compete bidirectional. If I leave or am fired from your company, then you are not allowed to hire anybody who works in my field for at least one year.
- OkayPhysicist 1y ago
  Don't want your employees to leave? Pay them more.
- Henchman21 1y ago
  Non-competes should not exist. Full stop. The only person who should be able to restrict my freedom of movement between employers is ME.
modeless 1y ago
There's no doubt in my mind that Silicon Valley's success should be credited in part to California's ban on non-competes. Bad for individual companies, but good for industries. Just look at Meta's current poaching spree, and previously the founding of Anthropic, SSI, Thinky. Whatever secrets OpenAI has will slowly but inevitably diffuse into other companies. Bad for OpenAI but strongly positive for literally everyone else in the world. It pushes OpenAI to keep innovating rather than rest on their laurels.
- antonvs 1y ago
  Well, it's "bad for individual companies" in the same sort of way as not being able to murder your competitors is bad for individual companies.
- MangoToupe 1y ago
  > There's no doubt in my mind that Silicon Valley's success should be credited in part to California's ban on non-competes. Maybe, but it's clear that even statute doesn't prevent bad behavior: https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_Litigation https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_L...
  - modeless 1y ago
    You linked to an example of statute preventing bad behavior. Yes, it took years, the law moves slowly, but it happened. Retroactive compensation was provided for those affected, but most importantly, corporate policies changed.
    - MangoToupe 1y ago
      > but most importantly, corporate policies changed. How confident are you about that? Given how small the compensation was, does this really represent much victory? Do you really think class action lawsuits as they stand present much disincentive?
      - 1y ago
noslenwerdna 1y ago
What other states have had non-competes similar to California? North Dakota and Oklahoma. It's possible that other factors might be more important in driving California's economic success...
- John23832 1y ago
  The point being that strict non-competes do not actually bolster the business environment.
  - danudey 1y ago
    They bolster businesses by making it easier for them to retain employees even if those employees are being treated like shit, because it makes it illegal for those employees to work anywhere else. That doesn't help the economy, but it helps the businesses.
- OkayPhysicist 1y ago
  When you're restricting people's freedom, you have to have a good justification for doing it. There are zero states that have achieved greater economic success than California by allowing noncompetes, thus it is safe to say that noncompetes are not necessary to achieve economic success.
- godelski 1y ago
  There's no singular factor in almost everything. We should use good faith interpretation and assume the parent understands this as well, unless there is other evidence otherwise
teeray 1y ago
I feel like noncompetes could work under one condition: the person is paid at 100% with full benefits for the entire non-compete period. You want contract terms that make someone unemployable for a year? That means you’re stuck paying for their year-long vacation. Don’t like it? Well, then maybe have a shorter non-compete or none at all.
- OkayPhysicist 1y ago
  This still gives an employer an unfair advantage, in that they don't need to compete to keep the employee. It also adds a significant amount of friction to the job market, artificially suppressing wages. The fair solution to the problem, which is actually legal even in places where noncompetes are illegal, is to pay the employee to not work elsewhere. As in, that's their job, and just like any other job, they're free to quit it at any time, in exchange for giving up their compensation for doing that job.
  - dylan604 1y ago
    But this does nothing for the company to protect its IP from that employee quitting to immediately go to work for a competitor. By keeping them on the payroll but working on "Special Projects" that is no where close to IP, they become stale in current state of the art. In the Silicon Valley show, this is why Big Head and the other folks "office" on the roof. They are segregated from the other employees while they continue to get paid.
    - godelski 1y ago
      You're confusing a noncompete with a nondisclosure They're related but they are different things. You can't go work for Coke, learn the secret formula, then go work for Pepsi and tell them the secret formula.
      - dylan604 1y ago
        No. Why do you think people are put on non-compete? They don't want competitors to be able to start doing what they are doing at the company. Sales is an easy example with the concern of clients being poached. There's no disclosures necessary there. If a sales person is put on ice for 12 months, that could destroy their relationship with the client. For techy people, there are ways of moving to a new company where they start up a way to directly compete with the first company without using any IP or breaking of a non-disclosure. Obviously, you can't recreate the formula for Coke at Pepsi, but you could create an RC Cola or a create a Dr. Pibb after leaving Dr. Pepper.
Henchman21 1y ago
> Indentured servitude has no place in the modern world. Which is why we have “elites” who want to bring back chattel slavery and feudalism. The very wealthy will see us all dead before they give up a single iota of power.

echelon 1y ago

> Noncompetes are a scourge. I can see why small companies might want non-competes to prevent their employees from being poached by hyperscaler monopolies. If non-competes continue to exist, they should be pared down to small-scoped work descriptions only, eg. not "AI" broadly, but rather something like "AI diffusion for skeletal movement". The non-competes shouldn't have durations longer than a year, and the companies enacting the contract should be required to pay departing employees a salary (or some large percentage of a salary) if they want to enforce the non-compete. Non-competes should also only be used to prevent employees from joining larger companies, not smaller ones. And they should never prevent work at a startup or new venture.

candiddevmike 1y ago
If an employee was worth X and the company made them worth Y, they should pay them Y to continue having them as an employee. Anything else distorts the labor market. Now having to pay back training or education if you leave before Z months seems reasonable.
ryandrake 1y ago
I take issue with the idea that I, as an employee, may be "poached". I am not a deer or wild boar, owned by a feudal lord, and protected on his land from hunters. I should be free to have agency and enter into business arrangements with anyone I choose. Just because my company "invested" money into my growth/education/training, doesn't mean they should own me for some period of time while they figure out how to make that investment pay off. Let's stop using this word poached. It's not analogous to an employer/employee relationship.
- derektank 1y ago
  I don't actually disagree but it's worth pointing out the US government, which values freedom of association as a bedrock principle, itself takes the view that, if they invest in your education and training, they "own" you for a period of time. Military servicemembers are required to sign service commitments both when they enter the service, but also upon completion of training and the length of the commitment is tied to the length/intensity of training. Air Force pilots are usually committed to serving on active duty for up to 12 years, due to the value of their training and many immediately jump ship to private industry after reaching that point. Personally, I think banning non-competes probably does reduce the amount of investment in education that companies make, but it's a tradeoff worth making to improve overall labor market efficiency and better guarantee personal freedom.
  - OkayPhysicist 1y ago
    > the US government, which values freedom of association as a bedrock principle That's fresh. If your employees immediately jump ship after training, it means you're underpaying them, or mistreating them, or, in the case of the US military, probably both.
  - d4mi3n 1y ago
    > Personally, I think banning non-competes probably does reduce the amount of investment in education that companies make, but it's a tradeoff worth making to improve overall labor market efficiency and better guarantee personal freedom. I largely work for Californian companies and by and large the benefits have been excellent. While I wish more money was put into training overall, I feel this is driven more by short term financial planning than things like non-competes. What have you seen or encountered that led you to the conclusion that non-competes would lead to more educational investment? My assumption is that they’re more useful when a non-compete reduces the amount of people with key skills from a market—it seems counter-intuitive to do this and then disseminate those skills via training programs.
  - oooyay 1y ago
    > Military servicemembers are required to sign service commitments both when they enter the service, but also upon completion of training and the length of the commitment is tied to the length/intensity of training. Air Force pilots are usually committed to serving on active duty for up to 12 years, due to the value of their training and many immediately jump ship to private industry after reaching that point. You actually can't speak about this as a whole because there's various programs that involve education and they all have nuances. The one people run into the most is the GI Bill which is not and has not been taxpayer funded. It's self-funded by veterans and unlocked by 4 years of active service or 8 years of reserve service. You unlock it by paying into it. The next most well known program is the Naval Medical Corps and Naval JAG Corps which offer to put already qualified candidates the rest of the way through school or pay their school bills for four years of honorable service. It's probably the single most high value deal the military offers. The last is aviation school which (usually, depending on what you get chosen to fly) has very little overlap with civilian aircraft. Pilots usually have a minimum service of 10 years but they're not exactly locked into being a pilot. For instance, Marine Corps pilots are trained infantry officers so they can go on to serve in the infantry as an Air Officer. Other than the GI Bill scenario in each scenario you're paid a six digit salary and largely treated like a god in the military due to rank.
lostdog 1y ago
Ok, but let's make the non-compete bidirectional. If I leave or am fired from your company, then you are not allowed to hire anybody who works in my field for at least one year.
OkayPhysicist 1y ago
Don't want your employees to leave? Pay them more.
Henchman21 1y ago
Non-competes should not exist. Full stop. The only person who should be able to restrict my freedom of movement between employers is ME.

modeless 1y ago

There's no doubt in my mind that Silicon Valley's success should be credited in part to California's ban on non-competes. Bad for individual companies, but good for industries. Just look at Meta's current poaching spree, and previously the founding of Anthropic, SSI, Thinky. Whatever secrets OpenAI has will slowly but inevitably diffuse into other companies. Bad for OpenAI but strongly positive for literally everyone else in the world. It pushes OpenAI to keep innovating rather than rest on their laurels.

antonvs 1y ago
Well, it's "bad for individual companies" in the same sort of way as not being able to murder your competitors is bad for individual companies.
MangoToupe 1y ago
> There's no doubt in my mind that Silicon Valley's success should be credited in part to California's ban on non-competes. Maybe, but it's clear that even statute doesn't prevent bad behavior: https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_Litigation https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_L...
- modeless 1y ago
  You linked to an example of statute preventing bad behavior. Yes, it took years, the law moves slowly, but it happened. Retroactive compensation was provided for those affected, but most importantly, corporate policies changed.
  - MangoToupe 1y ago
    > but most importantly, corporate policies changed. How confident are you about that? Given how small the compensation was, does this really represent much victory? Do you really think class action lawsuits as they stand present much disincentive?
    - 1y ago

noslenwerdna 1y ago

What other states have had non-competes similar to California? North Dakota and Oklahoma. It's possible that other factors might be more important in driving California's economic success...

John23832 1y ago
The point being that strict non-competes do not actually bolster the business environment.
- danudey 1y ago
  They bolster businesses by making it easier for them to retain employees even if those employees are being treated like shit, because it makes it illegal for those employees to work anywhere else. That doesn't help the economy, but it helps the businesses.
OkayPhysicist 1y ago
When you're restricting people's freedom, you have to have a good justification for doing it. There are zero states that have achieved greater economic success than California by allowing noncompetes, thus it is safe to say that noncompetes are not necessary to achieve economic success.
godelski 1y ago
There's no singular factor in almost everything. We should use good faith interpretation and assume the parent understands this as well, unless there is other evidence otherwise

teeray 1y ago

I feel like noncompetes could work under one condition: the person is paid at 100% with full benefits for the entire non-compete period. You want contract terms that make someone unemployable for a year? That means you’re stuck paying for their year-long vacation. Don’t like it? Well, then maybe have a shorter non-compete or none at all.

OkayPhysicist 1y ago
This still gives an employer an unfair advantage, in that they don't need to compete to keep the employee. It also adds a significant amount of friction to the job market, artificially suppressing wages. The fair solution to the problem, which is actually legal even in places where noncompetes are illegal, is to pay the employee to not work elsewhere. As in, that's their job, and just like any other job, they're free to quit it at any time, in exchange for giving up their compensation for doing that job.
- dylan604 1y ago
  But this does nothing for the company to protect its IP from that employee quitting to immediately go to work for a competitor. By keeping them on the payroll but working on "Special Projects" that is no where close to IP, they become stale in current state of the art. In the Silicon Valley show, this is why Big Head and the other folks "office" on the roof. They are segregated from the other employees while they continue to get paid.
  - godelski 1y ago
    You're confusing a noncompete with a nondisclosure They're related but they are different things. You can't go work for Coke, learn the secret formula, then go work for Pepsi and tell them the secret formula.
    - dylan604 1y ago
      No. Why do you think people are put on non-compete? They don't want competitors to be able to start doing what they are doing at the company. Sales is an easy example with the concern of clients being poached. There's no disclosures necessary there. If a sales person is put on ice for 12 months, that could destroy their relationship with the client. For techy people, there are ways of moving to a new company where they start up a way to directly compete with the first company without using any IP or breaking of a non-disclosure. Obviously, you can't recreate the formula for Coke at Pepsi, but you could create an RC Cola or a create a Dr. Pibb after leaving Dr. Pepper.

Henchman21 1y ago

> Indentured servitude has no place in the modern world. Which is why we have “elites” who want to bring back chattel slavery and feudalism. The very wealthy will see us all dead before they give up a single iota of power.