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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

#101

Post by throw_away_777 »

nickff wrote: post #92
bryanlarsen wrote: post #69

Earlier quoted context omitted.

In my understanding, you can't unilaterally quit the severance to terminate your non-compete.

My understanding is that severance is usually terminated when the former employee accepts a new position; I am not sure how a former employer could prevent the former employee from accepting a position from a competitor without use of a non-compete. Do you agree that NDAs are flawed in the ways I described?

The non-compete keeps someone from signing a position with a competitor. But in order for a non-compete to be legal, the company should have to pay the employees salary (or a significant fraction of the salary) for the duration of the non-compete contract.

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

#102

Post by Sacho »

Gibbon1 wrote: post #95
nickff wrote: post #68

Earlier quoted context omitted.

You are speaking to emotions, which means I have no way of addressing your concerns, but I will try to highlight why I do not share your conclusions: > "makes me not want" I do not want to agree to many terms, so I do not agree to them; this does not make me want to ban those terms. > "It is like a reverse market regulation" Non-competes are 'like' any other business agreement to me. In any case, I am not sure what a…

The way I look at a job is you get paid three ways. 1. Money. 2. Skills and Knowledge. 3. Career Contacts. With non-competes a company is trying to screw you out of #2 and 3.

As a counterpoint, it allows companies to give you a higher salary in exchange for #2 and 3. Or alternatively, if non-competes are the norm, it would allow a business to provide lower salaries for the incentive of no non-compete clause.

The argument whether to ban non-competes should be rooted in the practical applications of the clause. Highly skilled, in-demand workers have the power and financial safety to negotiate a non-compete clause.

The question is when the power dynamic between employer and employee is heavily skewed yowards the employer, can they abuse this imbalance to force non-competes as a market equilibrium.

For example, for a person struggling financially, the slightly higher salary may be a short-term requirement, while the non-compete ruins their long-term prospects.

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

#103

Post by justinlardinois »

golemotron wrote: post #94
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…

Why don't they just make an Executive Order?

Because executive orders have limited power and are controversial and possibly unconstitutional.

Almost all executive orders direct federal agencies, which are part of the executive branch, to take a given action. An executive order that attempts to compel a state to enact a certain policy is unheard of.

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

#104

Post by justinlardinois »

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…

> I'm beginning to think none of you have ever worked in companies that actually produce IP.

All software companies produce intellectual property.

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

#105

Post by elcct »

drawkbox wrote: post #10

Non-competes, the most anti-innovation, anti-skilled worker, anti-free market, anti-business and anti-American thing in working today. Non-competes are protectionism for larger businesses over small/medium businesses. As a freelancer, contractor and self-employed business owner/worker, please make these illegal, tired of these. The worst part about non-competes is they are blanket protectionism usually and up to 2+ y…

Non compete is fine if you were paid full salary for the entire time.

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

#106

Post by dredmorbius »

sjg007 wrote: post #51
dredmorbius wrote: post #37

Earlier quoted context omitted.

Among other reasons, Congress has the power to regulate interstate commerce, but not intrastate commerce. Congress might, say, prohibit noncompetes across state lines , but would have a harder time making the case for a noncompete prohibition within a given state. Perhaps not impossible. OTOH, there are Federal standards for labour in the US under the NLRA -- National Labor Relations Act. Lay understanding of law.

They can regulate companies who do any business across state lines.

Point.

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

#107

Post by greglindahl »

nickff wrote: post #99
greglindahl wrote: post #98

Earlier quoted context omitted.

Sorry, I don't agree with how you approach the entire problem. Labor law exists mainly because there's information asymmetry between companies and employees. You seem to be presuming that there's a free market for labor; that's not the case when there's information asymmetry. Your "evidence" falls apart when there's information asymmetry.

I think it is well known that there is information asymmetry in every transaction/deal/agreement involving more than one individual; saying that there is information asymmetry proves nothing. There is a highly regulated market for employees, and for employers. I didn't provide any evidence at all; I just asked if you agreed that in certain situations, it was possible for a non-compete ban to be anti-employee.

You said "My first piece of evidence" and now "I didn't provide any evidence at all". Given all the downvotes you've gotten, I recommend that you sharpen your debating tactics. You'll probably get better engagement that way.

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

#108

Post by masklinn »

elcct wrote: post #105
drawkbox wrote: post #10

Non-competes, the most anti-innovation, anti-skilled worker, anti-free market, anti-business and anti-American thing in working today. Non-competes are protectionism for larger businesses over small/medium businesses. As a freelancer, contractor and self-employed business owner/worker, please make these illegal, tired of these. The worst part about non-competes is they are blanket protectionism usually and up to 2+ y…

Non compete is fine if you were paid full salary for the entire time.

For the entire extent of the non-compete or for the entire time of your job? If it's the former then maybe (Germany requires at least 50% gross for the extent of the non-compete, and it can still be struck down by courts if it unreasonably hampers the former employee's ability to find a new job)

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

#109

Post by pjwal »

ekianjo wrote: post #11
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…

> California also prohibits any employee agreement which claims employer ownership of intellectual property developed on the employee's own time I have always wondered how could such a claim on ownership could exist in the first place. This reduces the employee to a mere company slave.

Which is why you rarely see successful lawsuits by companies toward former employees on this matter.

Law is solidified by precedence and the rulings have been more and more against employers, rightly so. It's OK to trust in the system on this matter, as no one is ruling for employers on the matter.

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

#110

Post by nickff »

throw_away_777 wrote: post #38
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?

If a company is preventing me from working, and doing so is actually important to the company above and beyond a tool to keep me working for them, they can afford to pay a salary for the duration of the non-compete. The fact that companies aren't willing to do so reveals that the companies want non-competes so they don't have to pay market wages and to restrict freedom of movement of employees. It is a terrible stand…

The fact that companies are unwilling to pay you to avoid harming them after you no longer work for them proves very little in my view. I understand that a non-compete could reduce potential future earnings, but prospective employees should take that into account, as you seem to have done.

I commend you for looking out for your long-term self interests, and agree that more people should carefully scrutinize their employment agreements. This does not bring me to conclude that non-compete terms should be banned, as they are simply one of many terms of the contract which should be priced appropriately.

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