3 ms·

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

by 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.
      - godelski 1y ago
        There's multiple reasons for noncompetes[0] You're right, it is about protection. A nondisclosure only goes so far. You have to prove in court that the nondisclosure was violated. Because how do you prove that a prior employee gave that knowledge as opposed to Pepsi just reverse engineering it?[1] A noncompete is an extra layer of protection because the barrier for proof is lower. You don't have to prove they violated the NDA, you just have to prove they work for the competition. You recognize that these are different things, right? I stressed that it can be subtle, but if you're having a hard time recognizing they are different then please give it a little more thought. A noncompete *also* means your previous employee isn't taking institutional knowledge and training with them. These won't be covered by a NDA! As an employer you invested in an employee by training them, right?[2] So you lose that investment? The reason I put so much stress on this second part is because it is exactly what the above conversation has been about. The employer is thinking in the instant and narrowly, not more broadly. Yes, you lose employees you invested in, but you can also get employees you didn't invest in. That's the bigger picture. Plus, you can... you know... pay your existing employees more than you pay new employees with similar skills. Instead of threatening them against leaving incentivize them to stay. You get a bigger return on your investment anyways [0] personally, I don't think it justifies having them but we can still understand the reasoning, right? [1] this is something most people with an undergraduate education in chemistry could probably do. So good luck [2] I stressed this above
        dylan604 1y ago
  - OkayPhysicist 1y ago
    The behavior depicted in Silicon Valley is (a humorous exaggeration of) the real response to California's prohibition on noncompetes. You can't force your employees not to jump ship, so instead, you pay them not to. Continuously, and competitively. At any time, said workers are free to go work for your competitors, so you need to actually compete to keep them, even if your only interest in them is having them not working on anything important. This is why Google has a dozen different applications that all do the same thing. Google didn't want high-level talent competing with them, so they just hired as many of the top developers as they could, and then paid them enough for them to be content working on miscellany.
- lcnPylGDnU4H9OF 1y ago
  > artificially suppressing wages What if the 100% is of a competing offer?
- ElevenLathe 1y ago
  Workers on gardening leave could hold an auction between their new prospective employer and their current employer. If the old firm can match the new one, they can keep the employee on gardening leave. If they can't, they can take the new job, though I guess that's strictly less freedom for the employee than the system you describe.
  - OkayPhysicist 1y ago
    That's not a noncompete, as far as things like California's prohibition on them are concerned. That's just a job, where you have no job duties. There's nothing saying that an employer can't fire you for having a second job, and there's nothing saying your employees have to actually DO anything for you to pay them.
    - bottlerock 1y ago
      That's true for the State of California, AFAIK. But in places (or some type of organizations) with just cause instead of at will, firing you for moonlighting would be illegal if it didn't conflict with an actual required duty.
red-iron-pine 1y ago
this is known as "consideration", and is fairly common in Oil & Gas. can't speak to other orgs but I know people who basically were given 80% of salary + health insurance coverage to politely fuck-off from the job market for ~2 years. Very specific list of orgs and roles they cannot do, otherwise anything is game. My buddy basically took his time off and did a Master's, worked part time doing handyman work / light farm stuff, and then jumped back into a 6 figure gig.
deleted 1y ago
[deleted]

by teeray 1y ago

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.
    - godelski 1y ago
      There's multiple reasons for noncompetes[0] You're right, it is about protection. A nondisclosure only goes so far. You have to prove in court that the nondisclosure was violated. Because how do you prove that a prior employee gave that knowledge as opposed to Pepsi just reverse engineering it?[1] A noncompete is an extra layer of protection because the barrier for proof is lower. You don't have to prove they violated the NDA, you just have to prove they work for the competition. You recognize that these are different things, right? I stressed that it can be subtle, but if you're having a hard time recognizing they are different then please give it a little more thought. A noncompete *also* means your previous employee isn't taking institutional knowledge and training with them. These won't be covered by a NDA! As an employer you invested in an employee by training them, right?[2] So you lose that investment? The reason I put so much stress on this second part is because it is exactly what the above conversation has been about. The employer is thinking in the instant and narrowly, not more broadly. Yes, you lose employees you invested in, but you can also get employees you didn't invest in. That's the bigger picture. Plus, you can... you know... pay your existing employees more than you pay new employees with similar skills. Instead of threatening them against leaving incentivize them to stay. You get a bigger return on your investment anyways [0] personally, I don't think it justifies having them but we can still understand the reasoning, right? [1] this is something most people with an undergraduate education in chemistry could probably do. So good luck [2] I stressed this above
      - dylan604 1y ago
- OkayPhysicist 1y ago
  The behavior depicted in Silicon Valley is (a humorous exaggeration of) the real response to California's prohibition on noncompetes. You can't force your employees not to jump ship, so instead, you pay them not to. Continuously, and competitively. At any time, said workers are free to go work for your competitors, so you need to actually compete to keep them, even if your only interest in them is having them not working on anything important. This is why Google has a dozen different applications that all do the same thing. Google didn't want high-level talent competing with them, so they just hired as many of the top developers as they could, and then paid them enough for them to be content working on miscellany.
lcnPylGDnU4H9OF 1y ago
> artificially suppressing wages What if the 100% is of a competing offer?
ElevenLathe 1y ago
Workers on gardening leave could hold an auction between their new prospective employer and their current employer. If the old firm can match the new one, they can keep the employee on gardening leave. If they can't, they can take the new job, though I guess that's strictly less freedom for the employee than the system you describe.
- OkayPhysicist 1y ago
  That's not a noncompete, as far as things like California's prohibition on them are concerned. That's just a job, where you have no job duties. There's nothing saying that an employer can't fire you for having a second job, and there's nothing saying your employees have to actually DO anything for you to pay them.
  - bottlerock 1y ago
    That's true for the State of California, AFAIK. But in places (or some type of organizations) with just cause instead of at will, firing you for moonlighting would be illegal if it didn't conflict with an actual required duty.

red-iron-pine 1y ago

this is known as "consideration", and is fairly common in Oil & Gas. can't speak to other orgs but I know people who basically were given 80% of salary + health insurance coverage to politely fuck-off from the job market for ~2 years. Very specific list of orgs and roles they cannot do, otherwise anything is game. My buddy basically took his time off and did a Master's, worked part time doing handyman work / light farm stuff, and then jumped back into a 6 figure gig.

deleted 1y ago

[deleted]