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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

#221

Post by microcolonel »

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…

>They are a tool of restrictive coercion to stifle an employees freedom of movement in the job market.

This is why they are a valuable part of an agreement. Including a non-compete means that your contract is lower risk for the employer, which can mean higher salary or better retention. Early termination terms exist for the same reason.

That said, a non-compete which prevents you entirely from practicing your craft would be a hard one to enforce, I've certainly never seen a contract like that.

If there are non-compete clauses in entry-level food service jobs, I hardly think they would bother to enforce them. The loss of a burger flipper from a McDonalds to a Burger King is less than the cost of lawyering them into a pit of despair.

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

#222

Post by JumpCrisscross »

sharemywin wrote: post #194
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…

Sales is tricky because you build up a relationship with said client on the companies dime usually. poaching customers seems wrong to me.

Non-solicitation clauses [1] cover this.

[1] https://www.contractstandards.com/clauses/non-solicitation

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

#223

Post by jedrek »

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…

> freedom to contract is always a good thing

Hardly. Freedom to contract would be a good thing if we could assume that the sides stand on more or less equal footing, which is almost unheard of in the case of corporations and people.

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

#224

Post by jedrek »

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…

The logical conclusion of a regulation-free system is of corporations large enough to destroy competition before it starts.

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

#225

Post by tristor »

brightball wrote: post #216
tristor wrote: post #214

Earlier quoted context omitted.

> "within 5 miles of this location, up to 2 years, cannot contact any clients of this business" What you just described is a textbook non-solicitation agreement. A non-compete would read something like: "You covenant and agree that, during the term of your employment with the Company and for twelve (12) months after the termination thereof, regardless of the reason for the employment termination, you will not, direct…

That's definitely where the disconnect is then. The non-compete you are describing would be totally illegal in a right to work state. I'm 36 years old, have run a business and dealt with a lot of contracts like this for clients in the area and this is the first time I've ever heard of a specific "non-solicitation" agreement. My guess is that's because around this area it's what we understand a "non-compete" to be. I…

> I can't imagine anyone would ever sign a document that said they couldn't work in their field at all because they worked for this company.

Yep, but they do. Even Jimmy John's was making employees sign a non-compete saying they wouldn't work for any competing fast food delivery chains if they quit. E.g. if you drove for Jimmy John's you can't quit to drive for Domino's. http://fortune.com/2016/06/22/jimmy-johns-non-compete-agreem...

They got sued and lost, but thousands of employees signed them because their only alternative was to not have the job or possibly any job.

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

#226

Post by cmdrfred »

tjic wrote: post #175
jhardcastle wrote: post #165

Earlier quoted context omitted.

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.

I have been told by a lawyer friend of mine that for a contact to be valid both parties must have the ability to negotiate it. He said that is why most non-competes are unenforceable in the first place as you don't really have the leverage to negotiate that for most jobs. I took his advice and advantage of his letterhead and told a previous employer to pound sand when they wanted me to not work for a competitor. Worked out fine.

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

#228

Post by heimidal »

fmavituna wrote: post #203
tristor wrote: post #184

Earlier quoted context omitted.

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…

Sorry I wasn't clear on the original comment, how can NDA stop a developer to use what he knows while writing code or creating procedures? If you are a developer and worked on a code for 2 years. NDA cannot cover what you know what you don't. Your know-how that you captured on that company can simply be replicated in another company. You'll write the code from scratch, and NDA or copyright, or even patent in majority…

If you replace "developer" with "general contractor" and "writing code" with "constructing a building", do you believe your argument holds up? How about "doctor" and "practicing medicine"? "Attorney" and "practicing law"? "Salesperson" and "selling effectively"? I could go on.

While employed, a person necessarily learns skills in order to perform their duties; as an employer, it would be impossible to derive value from the worker without training and knowledge transfer. Your argument is that it should be a two-way street until employment is terminated, then it becomes a one-way restriction against the employee. That's not fair to workers and is extremely biased toward the employer.

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

#229

Post by imglorp »

falcolas wrote: post #220
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. There are many "temporarily embarrassed" entrepreneurs that read HN who can't stomach the thought of their future tech lead stealing their idea. I personally worked for one such person, whose startup was so new that employees were being paid only with shares, but still had about 10 pages of legal documentation for new employees to…

As most readers here would agree, ideas are worth almost nothing but executing on them is the value.

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

#230

Post by tristor »

fmavituna wrote: post #203
tristor wrote: post #184

Earlier quoted context omitted.

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…

Sorry I wasn't clear on the original comment, how can NDA stop a developer to use what he knows while writing code or creating procedures? If you are a developer and worked on a code for 2 years. NDA cannot cover what you know what you don't. Your know-how that you captured on that company can simply be replicated in another company. You'll write the code from scratch, and NDA or copyright, or even patent in majority…

What you're describing isn't "intellectual property", it's experience. The company you work for has no legal claim to your experience. Your experience is a personal asset which has value in the market and is a direct reason why a company hires and compensates you to do that job.
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