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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

#171

Post by fmavituna »

tristor wrote: post #139

I don't understand why there's so many people in the comments defending non-competes. They have literally no value to society, or to individual employees. They are a tool of restrictive coercion to stifle an employees freedom of movement in the job market. Trade secrets, IP, secret sauce: covered by NDA and IP assignment agreements Client lists, contract terms, sales strategies, reported metrics, financials: covered…

> Trade secrets, IP, secret sauce: covered by NDA and IP assignment agreements

As a developer pretty much none of these matter or protects anything.

Imagine this scenario; - John has no idea about video encoding but a good developer.

- John joins to a video encoding startup

- This startup encodes videos 3 times faster than the competitor

- After working on the core product for 2 years, John knows a lot about video encoding, because he's been trained. He also knows why they can do faster than anyone else. It's not one thing, bunch of things.

- Then John receives an offer from the competitor with 50% more salary (obviously this is smart thing to do for competing company). He obviously leaves, because 50% more! All the know-how, experience etc. will be just automatically transferred to this competitor. NDA, copyright etc. nothing can prevent it.

So how is this good for anyone but John? If you think this kind of stuff doesn't happen and all this kind of advancements are public domain anyway, you are wrong. There are many niche fields where competing advantage comes from technical excellence and understanding couple of key things better than your competition.

Not to mention John will have inner knowledge of so many other non-technical but important details that can give obvious unfair competitive advantage.

When non-competes are removed companies do need to treat their employees differently. "If I don't trust this employee enough I shouldn't give them the important bit of the source code, shouldn't train them on X know-how that we internally produced" etc. which is pretty bad for everyone.

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

#172

Post by dvtv75 »

aikah wrote: post #59
jomamaxx wrote: post #57

Earlier quoted context omitted.

"Bullshit, that's what NDAs are for." Totally false and completely naive. Most knowledge and know-how is not explicit - they are often learned. For example - suppose you worked at Nuance, and helped develop their new AI/Neural Network speech recognition system. Everything you know about Speech + AI you learned from them, in that language specific setting. If you went to work on Google's new Speech Recognition, which…

> For example - suppose you worked at Nuance, and helped develop their new AI/Neural Network speech recognition system. Everything you know about Speech + AI you learned from them, in that language specific setting. And the knowledge and experience you got from your previous job before Nuance ? where does it come from ? why would the buck stop at Nuance ? or the former company ? or the company before it ? your point…

Actually, that's a very interesting question - your prior knowledge in a field, particularly if you've paid for your education, might become significantly more valuable if a non-compete is implemented. Valuable enough perhaps to refuse Nuance the right to use your work.

Of course, the counter-argument there is that they paid you for your work, and that's why it's their property. It may follow that if the work is theirs and you can't use it, then surely your student loan in its entirety would also be their responsibility for just that reason.

Shame I have more important problems to solve in the meantime, that idea could be quite fascinating to work through.

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

#173

Post by kefka »

TeMPOraL wrote: post #155
Silhouette wrote: post #112

Earlier quoted context omitted.

Which full salary, the one you got before, or the one you could make as a skilled software developer moving to a much better gig with a rival employer willing to offer a more attractive deal?

Depends. I'll happily take my old salary for just sitting on my butt and not doing anything. Of course, I would not be sitting like that - I'd probably take a part-time job somewhere else, and spend the rest of the time educating myself (for my field as well as for other things). Non-competes don't cover reading books.

That, or go back to school on their dime. Then you make yourself that much more wanted.

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

#174

Post by debaserab2 »

fmavituna wrote: post #171
tristor wrote: post #139

I don't understand why there's so many people in the comments defending non-competes. They have literally no value to society, or to individual employees. They are a tool of restrictive coercion to stifle an employees freedom of movement in the job market. Trade secrets, IP, secret sauce: covered by NDA and IP assignment agreements Client lists, contract terms, sales strategies, reported metrics, financials: covered…

> Trade secrets, IP, secret sauce: covered by NDA and IP assignment agreements As a developer pretty much none of these matter or protects anything. Imagine this scenario; - John has no idea about video encoding but a good developer. - John joins to a video encoding startup - This startup encodes videos 3 times faster than the competitor - After working on the core product for 2 years, John knows a lot about video en…

> So how is this good for anyone but John?

How about the consumer/society as a whole who now widely benefits from advanced technology being proliferated through the industry instead of being hoarded by one company?

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

#175

Post by tjic »

jhardcastle wrote: post #165
tjic wrote: post #146

Earlier quoted context omitted.

> I don't understand why there's so many people in the comments defending non-competes. They have literally no value to society, or to individual employees. To go meta for a moment: I think that this sort of statement exposes a flaw that many of us have in debates. It's related to the "argument from ignorance" fallacy, but is not exactly the same thing. I take it as one of my priors that people at news.yc are intelli…

The fact that the grandfather comment is the top-rated comment (as of this writing) in the thread to me suggests that a great number of people agree with him/her, which sort of contradicts your "argument from ignorance" point. Just because thousands of HN readers are intelligent engineers, founders, scientists, marketers, etc. doesn't make them legal experts, or political experts. You assume that "freedom to contract…

> You assume that "freedom to contract" means that both parties enter with equal knowledge and equal bargaining power.

No, it doesn't. I'm Hayek-friendly, so I don't think two entities EVER have the same knowledge.

"Freedom to contract" no more implies equal knowledge than "freedom to drink" implies equal knowledge of brewing, or "freedom to date" implies equal attractiveness.

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

#176

Post by bahularora »

Today, after completing almost a month of my trial at a new job, HR asked me to sign a document on Stamp paper with a very vague 1 year non-compete clause. All my objections to the same were casually shrugged of by her, by saying they don't use it until I would directly hurt the revenue of the employer.

When I refused to sign it she said that it might be hard to offer me a job in the case I don't sign it. Which very much sounded like a threat to me. If they insist I would most probably sign it, as without the salary I wouldn't be able to afford rent next month. According to her all the other employees have signed it and none questioned her on it.

Notably non-competes are mostly illegal in India, still almost all agreements I have come across have the clause mentioned in them. I don't understand the point in having a clause like this, when its non-enforceable.

Many other points of the agreement were as egregious as the non-compete clause. Also the whole agreement was extremely one sided. It also said all the IP/Products/patents I develop, even in my own time, during my tenure would belong by the employer.

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

#177

Post by brightball »

tristor wrote: post #139

I don't understand why there's so many people in the comments defending non-competes. They have literally no value to society, or to individual employees. They are a tool of restrictive coercion to stifle an employees freedom of movement in the job market. Trade secrets, IP, secret sauce: covered by NDA and IP assignment agreements Client lists, contract terms, sales strategies, reported metrics, financials: covered…

Noncompetes are usually helpful in the service industry. If I hire you in my HVAC business and spend a year sending you on client jobs, then you leave, start your own HVAV business and start contacting all of my clients that I sent you to work on...that's a problem. Without a means of preventing that it's almost impossible to grow a service business.

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

#178

Post by a_imho »

fmavituna wrote: post #171
tristor wrote: post #139

I don't understand why there's so many people in the comments defending non-competes. They have literally no value to society, or to individual employees. They are a tool of restrictive coercion to stifle an employees freedom of movement in the job market. Trade secrets, IP, secret sauce: covered by NDA and IP assignment agreements Client lists, contract terms, sales strategies, reported metrics, financials: covered…

> Trade secrets, IP, secret sauce: covered by NDA and IP assignment agreements As a developer pretty much none of these matter or protects anything. Imagine this scenario; - John has no idea about video encoding but a good developer. - John joins to a video encoding startup - This startup encodes videos 3 times faster than the competitor - After working on the core product for 2 years, John knows a lot about video en…

IMHO in this scenario the leave is the company's fault for lowballing John for years.

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

#179

Post by masklinn »

Fiahil wrote: post #142
masklinn wrote: post #140

Earlier quoted context omitted.

> The only thing a non-compete does is say that Employee A cannot work in their chosen field for some period of time after they are fired or quit. In doing so it offers no consideration or compensation typically in the contract. Many (if not most) EU countries require compensation for non-competes to be valid (usually at least 30% gross), and the non-compete can still be challenged in court if e.g. it applies to too…

Yes, and it's rarely enforced. Most of the time its activation is at the employer's discretion.

It's not just that it's rarely enforced it's that it's rare at all, there's no point in putting one in the contract when there's 95% chance you'll get big fat middle finger in whatever labor court has jurisdiction if you try to activate it, and inane contractual obligations are a risky bet for the contract itself.

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

#180

Post by Eridrus »

brightball wrote: post #177
tristor wrote: post #139

I don't understand why there's so many people in the comments defending non-competes. They have literally no value to society, or to individual employees. They are a tool of restrictive coercion to stifle an employees freedom of movement in the job market. Trade secrets, IP, secret sauce: covered by NDA and IP assignment agreements Client lists, contract terms, sales strategies, reported metrics, financials: covered…

Noncompetes are usually helpful in the service industry. If I hire you in my HVAC business and spend a year sending you on client jobs, then you leave, start your own HVAV business and start contacting all of my clients that I sent you to work on...that's a problem. Without a means of preventing that it's almost impossible to grow a service business.

When I worked at a consultancy there was a separate non-solicitation clause about clients that was written into my contract and I'm pretty sure was written into the contract clients signed too to not poach consultants.
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