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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

#181

Post by wccrawford »

tjic wrote: post #146
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…

> 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…

Non-competes do have value to employers. But if they really don't have value to employees or society, what exactly is he supposed to argue with? There's no way to prove the non-existence of something.

He could prove they're detrimental in some way, but that's different than proving that they have no positive aspect for those groups.

It sounds to me like he has already stopped and pondered it, and came away with nothing. Then he posted here, offering people a chance to correct his ignorance.

So far as I can tell, he's done everything correctly.

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

#182

Post by ams6110 »

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.

Mostly federal laws prempt state laws by threat of witholding some sort of funding. When the federal interstate speed limit was 55mph, states could still have higher limits but they would lose their federal transportation funding.

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

#183

Post by ams6110 »

Silhouette wrote: post #112
elcct wrote: post #105

Earlier quoted context omitted.

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

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?

Are you more attractive to the new employer because of the training and education that your current employer has provided?

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

#184

Post by tristor »

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…

To summarize your argument, you're saying that in practice NDAs are meaningless as a term of your employment contract, so adding an even more onerous and one-sided term, the non-compete is advisable? Contracts are only as good as their enforcement and the honor of those involved in the agreement. If an employee leaves and spreads your trade secrets to your competitor, then you sue them and the competitor, the same as if your competitor hires that employee in violation of a non-compete. The difference here is the NDA is specific, a non-compete is broad. The NDA says not to share your secrets while working at a competitor, the non-compete prevents you from working for the competitor entirely.

Since the secrets aren't yours to share at will, they belong to the company, there's nothing that restricts your freedoms in an NDA. It's more of a covenant than a restriction. You're making a legally enforceable promise to not spread about things you know full well are supposed to be confidential. A non-compete however restricts your freedom of movement in the labor market and directly provides a tool for the employer to coerce your actions in and outside of work. There's a huge difference in consequences and incentives, while the NDA provides sufficient protection for the things that matter in your scenario.

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

#185

Post by dsr_ »

I'm perfectly OK with a non-compete agreement... as long as it pays me for my downtime.

You think the information in my head is so valuable that you don't want me working for a competitor for three years after I leave? OK, pay me for three years.

It's not worth that much to you? Well, how much is it worth?

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

#186

Post by tristor »

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.

Client lists are covered under NDA and you can add a non-solicitation clause which is different from a non-compete and seems both reasonable and fair.

NDA + non-solicitation: You can't start your own HVAC company by handing your sales person a copy of my client list and calling everyone who currently works with me.

Non-Compete: You can't start your own HVAC company. Full-stop.

Do you see the difference? Do you understand why one is reasonable and fair and the other is not?

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

#187

Post by ams6110 »

jacalata wrote: post #82
sjg007 wrote: post #49

Earlier quoted context omitted.

Take the job and let them sue. Scotus won't enforce a noncompete.

Jimmy John's managed to enforce it on their employees for years http://m.huffpost.com/us/entry/7042112

Um... that story states that the clause was never actually enforced therefore there was no valid claim of harm.

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

#188

Post by didgeoridoo »

A ban seems heavy-handed. Since a noncompete essentially ties up an employee for a period, I'd prefer to see that tie-up treated by law as a continuation of employment at the existing salary. Surely companies must value their precious IP more than a single employee's salary for a year or two — and if they don't, perhaps it isn't that valuable after all.

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

#189

Post by supercanuck »

nothrabannosir wrote: post #156
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…

1) deontological: freedom to contract is always a good thing. It is a human right, and government has no legitimate moral power to remove that right from people. That's not a strong argument either. You could substitute "contract" with anything. I say this as a staunch libertarian. Government restrictions aren't bad because "government", but because restrictions. The free market works best when government restricts t…

I am in favor of banning non competes, but only because we lack the freedom due to lack of competition. I think the evidence of that is when Jimmy John's can have force fast food workers to sign them.

To me it seems, banning non-competes, will create more competition.

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

#190

Post by didgeoridoo »

dredmorbius wrote: post #37
throw_away_777 wrote: post #5

Why can't congress do something about this? Non-competes are clearly terrible for workers, and should at the least be illegal without a severance agreement. If a company wants to keep me from working they should pay for the privilege. Workers also need to start refusing to sign egregiously bad non-compete agreements.

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.

Wickard v. Filburn can be twisted in virtually any way you like: "Noncompetes in one state affect national labor market price levels, thus are subject to the commerce clause, and are heretofore banned."

Not that I support this reading, but it's been used to shake off commerce clause challenges for the better part of a century now.

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