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White House urges ban on non-compete agreements for many workers

reuters.com

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Re: White House urges ban on non-compete agreements for many workers

#71

Post by pmontra »

greglindahl wrote: post #48
elmigranto wrote: post #30

Earlier quoted context omitted.

On the other hand, you work at a company for most of your professional life, and become an expert in a field you love. One day you are no longer employed for some reason, but due to non-compete there is no way to get a job you want, since your expertise is somewhat niche. So you are forced to build websites or sell coffee for two years. Or drop your life in US and work some other place. If the person from your quantu…

Well, the counter-example is that the tech industry in California completely collapsed because... oh, wait, we're doing OK.

According to other posts here, CA banned non competes some 150 years ago.

Re: White House urges ban on non-compete agreements for many workers

#72

Post by Cidan »

greglindahl wrote: post #70
Cidan wrote: post #67

Earlier quoted context omitted.

Federal legislation can not weaken state legislation in most situations where a state legislation is stricter. A good example of this is minimum wage at the federal and state level. If legislation at the federal level were to apply a weaker standard for who can not be covered by a non-compete clause, a state can still expand coverage to all jobs.

Federal laws frequently explicitly preempt state laws. When CAN-SPAM was passed, it invalidated California's stricter spam law. California has stricter auto emissions because Federal law allows it. Other states are allowed to follow the California standard, because Federal law allows that.

Yep; these are very specifically crafted situations though, which is why I said most and not all.

Re: White House urges ban on non-compete agreements for many workers

#73

Post by azernik »

Animats wrote: post #4

Note that this is being proposed as something states should do. Federal legislation is not being proposed. Worst case would be Federal legislation which was weak and pre-empted state legislation, weakening California's ban. California employment law prohibits non-compete agreements for employees, and has since 1872. California also prohibits any employee agreement which claims employer ownership of intellectual prope…

Ideally, you could get something like the motor vehicle emissions model - the federal government passed restrictions only after California, and they were less strict, so the California Air Resources Board got dispensation to set stricter standards. Individual states could then decide to follow the EPA restrictions or the stricter CARB ones; this has led to a gradual convergence of EPA regulations to the stricter CARB standards.

Re: White House urges ban on non-compete agreements for many workers

#74

Post by jomamaxx »

bsder wrote: post #22
jomamaxx wrote: post #17

Earlier quoted context omitted.

From your comments I gather you might not understand the problem. Were Soft Engs simply to do 'work' then you would be absolutely right. But in a world of IP ... it's a different story. Company ABC brings you in, trains you on their know-how and core IP, which took a lot of struggle, $, and R&D to create - then you leave, go to a competitor, and effectively communicate and give away ABC Corps. most valuable asset. No…

> Company ABC brings you in, trains you on their know-how and core IP, which took a lot of struggle, $, and R&D to create - then you leave, go to a competitor, and effectively communicate and give away ABC Corps. most valuable asset. Um, that's covered by an NDA--Non-Disclosure Agreement. Those are generally QUITE enforceable, even in California and often last for 3 to 5 years. Non-compete is quite different.

Your comments about NDA's are not quite right. NDA's do not capture a lot of the essential issue.

Pragmatically speaking, it's nary impossible to work in some fields, and then move to a competing firm without passing on know how or trade secrets.

Even the 'manner of approach' to a problem, while it may not be a trade secret, is basically a core part of the 'true IP' that is developed by a company.

Using DWAVE as an example - there are thousands of 'little things' that they will have had to figure out along the way - from which parts to use, which vendors work well, material types, tooling, physical test units, support gear (like cooling etc.) - all of this is IP.

Any number of small issues can be the 'key ingredients' that make or break a project. When DWAVE spends a year trying to figure out how to keep some material at a steady temperature in order to bind it to another ... then that's IP.

It's a paradox when nearly one's entire skill set is tantamount to 'trade secrets' but it's feasible.

An NDA - in the broadest sense - in this case would be a de-facto 'non compete' - because there's hardly a thing this Eng could do for Google that wouldn't involve giving away important information.

In case you guys are not aware: hiring people to steal away trade secrets and know-how is very common in the Valley, often by major players and firms.

If you haven't noticed - the biggest and most successful tech companies all have either natural monopolies (i.e. Facebook/Twitter with network externalities), or insurmountable massive barriers to entry keeping others out (i.e. Apple having MacOS/iOS, a retail distribution chain, massive leverage over supply chain, and market share).

In business scenarios it happens as well, in less 'protectable' scenarios. Apple snared away tons of BlackBerry sales/BD execs - not because they were necessarily skilled or talented - but because of their established relationships within carrier channels. Apple was buying access to Verizon and AT&T - not random sales guys abilities.

Re: White House urges ban on non-compete agreements for many workers

#75

Post by aikah »

nickff wrote: post #54
aikah wrote: post #53

Earlier quoted context omitted.

> Why is it fair that an employee can stop working at their job or commit fraud, then immediately sell all the non-public information they have to a competitor? Then sue if you have proof. What is not fair is to reduce a worker's opportunity to work when he isn't on your payroll.

You can sue people for not working at their job? There are many people who simply stop accomplishing tasks when they want to be laid off or fired. The parent's logic would say that if someone does this, the only way to stop this 'bad employee' from selling all your non-public information is to pay (at least) their full salary indefinitely.

> You can sue people for not working at their job? There are many people who simply stop accomplishing tasks when they want to be laid off or fired.

Then let them quit and go somewhere else. NDA cover corporate secrets, non-compete are anti freedom, anti competition and should be illegal. If your employee stops working then perhaps you should question the way you do business and how you manage your work environment. Usually it's a clear sign you treat your employees like shit. They should have all the rights to go work in a better environment whether it is at a competitor or not doesn't matter.

Re: White House urges ban on non-compete agreements for many workers

#76

Post by greglindahl »

codeonfire wrote: post #64
greglindahl wrote: post #56

Earlier quoted context omitted.

Non-competes are successfully enforced (outside CA) all of the time. Just take a look at the tech press, there are quite a few articles about it.

Non-compete lawsuits are typically only worth it for VP level people who have strategic secrets. No one cares about or sues 99.9% of workers who go work somewhere else.

I agree that when it hits the news it's generally a lawsuit against a VP, but you have no idea how many times lawyers send nasty letters, which are pretty effective.

Re: White House urges ban on non-compete agreements for many workers

#77

Post by nickff »

oxide wrote: post #65
nickff wrote: post #21

Earlier quoted context omitted.

How would a company "pay for the privilege" of preventing you from transferring their trade secrets without being able to enforce non-competes?

Isn't that what the Non-Disclosure Agreement is for? I don't understand how a non-compete keeps trade secrets safe, it's not like you can't transfer a trade secret a year later, or however long the non-compete lasts.

My comment from a child:

"NDAs are nice, but there is no way to know whether a trade secret has been transferred to a competitor (if the competitor keeps their secrets secret)."

The other problem with allowing NDAs but disallowing non-competes is that it provides a huge loophole, where businesses can classify all non-public information as trade secrets, thereby preventing the former employee from implementing any competing system (which will inevitably contain some non-public process from the previous employer)."

I am unsure what you mean by the following quote:

>"it's not like you can't"

Re: White House urges ban on non-compete agreements for many workers

#78

Post by Hondor »

jomamaxx wrote: post #60
aikah wrote: post #36

Earlier quoted context omitted.

> But in a world of IP ... it's a different story. If the employee violates the IP then sue him for that. No need for non-compete agreements. If you're worried the employee will steal your clients then you're not giving your clients a good deal at first place, and the employee shouldn't be prevented from working with your clients. This is a free market. Non compete agreements are completely anti-freedom of both enter…

"It doesn't matter how much R&D was created. That's the role of patents to deal with that thing." I'm beginning to think none of you have ever worked in companies that actually produce IP. First off - that's not what patents are for. Patents protect publicly known information - not trade secrets. And they don't do it very well. There are very few things you can defend with a patent. What companies are concerned with…

> If you work for ABC corp and they make a 'sales automation tool' - and you go off and build your own 'sales automation tool' - then fine. It's not about IP or trade secrets. You can do as you like.

Unless you have a noncompete clause. That's exactly why they're a problem. You can't develop your professional skills. When you leave, you have to start from scratch in a different industry.

Re: White House urges ban on non-compete agreements for many workers

#79

Post by flukus »

> The Obama administration on Tuesday also urged states to ban non-compete agreements that are not proposed before a job offer or promotion is accepted and said employers should not be able to enforce the agreements when workers are laid off.

Won't this just move the non-compete to be included in the job offer instead of the formal employment contract? That's a slight improvement at best.

Re: White House urges ban on non-compete agreements for many workers

#80

Post by greglindahl »

gok wrote: post #23

Great! ...as long as this doesn't just mean nonsensically narrow rules like the new Illinois law, which only applies to low wage workers (< $13/hour).

Most laws are a reaction to something stupid, and in this particular case it's a reaction against sandwich shops requiring low-wage workers to sign non-competes.
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