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Send Noncompete Agreements Back to the Middle Ages

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Re: Send Noncompete Agreements Back to the Middle Ages

#51

Post by chii »

paulie_a wrote: post #19
wpietri wrote: post #16

Earlier quoted context omitted.

From the perspective of any normal employee, "non-enforceable" doesn't matter. That I can eventually win in court doesn't matter if I can't afford the time, money, and stress to get that ruling. Exactly the goal, I'm sure, of the people writing up these agreements.

From the perspective of the normal employee they should understand they pretty much won't be enforced. The threat will be made. And then no follow up.

In most cases, yes, it is an empty threat. However, the possibility is there. The company (or, individuals in the company who dislike you) can selectively use it against you to make your life harder. Or, if you whistleblow, they can use it to retaliate.

Re: Send Noncompete Agreements Back to the Middle Ages

#52

Post by mindslight »

rrggrr wrote: post #17

Q: I'm willing to pay you $100,000 to sign a non-compete to work on the project with my company. If I don't pay, the non-compete isn't valid. Okay? A: No. Q: $500,000? A: No. Q: $1m? A: No. Q: $10m? A: Yes. The point being... the problem is NOT non-competes. The problem is the exchange of value. They serve a useful purpose in support of business risk-taking and investment. Make them fair, not unenforceable.

In states that presently discourage non-competes, employers could easily offer parting employees a "stay at home" wage of say one third salary, yet they do not. Which implies they do not value non-competition anywhere near what the employee does.

In general it's impossible to put a price on an unworkable concept. Attempting to do so just adds token compensation as a fictional justification for the existing problems.

Re: Send Noncompete Agreements Back to the Middle Ages

#53

Post by munk-a »

rrggrr wrote: post #17

Q: I'm willing to pay you $100,000 to sign a non-compete to work on the project with my company. If I don't pay, the non-compete isn't valid. Okay? A: No. Q: $500,000? A: No. Q: $1m? A: No. Q: $10m? A: Yes. The point being... the problem is NOT non-competes. The problem is the exchange of value. They serve a useful purpose in support of business risk-taking and investment. Make them fair, not unenforceable.

Assuming non-competes are perfectly valid and fair (which I disagree with but that's a separate point) is this scenario fair if a large portion of the employee pool is unaware of the ramifications of their non-compete on signing?

I am quite thankful non-competes are unenforceable because I believe they (and much other contract legalese) are a soft form of classism that creates an unequal information state between the majority of employers and employees. The end result is that these sorts of inequalities distort the free market.

Re: Send Noncompete Agreements Back to the Middle Ages

#55

Post by chii »

dunpeal wrote: post #29
cryptonector wrote: post #22

Earlier quoted context omitted.

This wouldn't be realistic even if non-competes were perfectly enforceable at low cost. An enforceable non-compete does not raise an employee's value to the employer, and anyways they would not be able to afford exorbitant salaries. Non-competes really do cost employees (who mostly act as though they are enforceable), and they seem to put up with it, and since they put up with this then in a sense it is already the c…

Non-competes are so vague that nobody knows how much to demand even if they were possible to negotiate (which they aren't). A friend of mine received two offers for almost the exact same compensation. One had a non-compete clause buried deep in the employment contract. Most candidates probably wouldn't even find it. He asked what the non-compete means. They told him it's almost never enforced. As in, by the mere lang…

What if you judge the cost of a NC agreement to be the cost in lawyer fees to fight it?

Ask for that, and if you ever get sued over it, well...the fees are covered...

Re: Send Noncompete Agreements Back to the Middle Ages

#56

Post by dunpeal »

woolvalley wrote: post #45
dunpeal wrote: post #38

Earlier quoted context omitted.

Not a bad attempt, but what's "full pay"? For most senior engineers, the base salary is just a part of the compensation package. What about bonus? Also, most employees move for a better opportunity, which often means a much better base comp + potential for much higher bonus. If I'm not going to be compensated for that, how is that "fair"? Finally, my resume and likely my skillset will take a hit for sitting 1-2 years…

Full pay would be your tax return saying what the full amount of compensation you got from the employer. Stock rewards, bonuses, etc are all reported from specific employers. Your highest year in your previous years of employment with the employer is the year I would chose. And add other benefits like health insurance and such. Basically your still 'employed' on garden leave with the company until the non-compete per…

OK, I think full taxable income is a nice suggestion. But it will require legislation, i.e. probably will never happen.

Moreover, the point of the article is that NCAs are a long-term drag on the economy. If the main reason there's SV in California and not near Boston, is the lack of NCAs, then that seems like a huge cost and a drag on the economy as a whole.

Re: Send Noncompete Agreements Back to the Middle Ages

#57

Post by elliottkember »

nraynaud wrote: post #39
samstave wrote: post #33

I would love to see a spoof where a middle age serf is going to move to a new farm, but his current lord forces him to sign a contract which precludes the serf from using his wheat farming skills for the new lord who is the current lords political competition.

nice try but serves were attached to the land by nature.

This is correct but it's serfs not serves

Re: Send Noncompete Agreements Back to the Middle Ages

#58

Post by munk-a »

chii wrote: post #51
paulie_a wrote: post #19

Earlier quoted context omitted.

From the perspective of the normal employee they should understand they pretty much won't be enforced. The threat will be made. And then no follow up.

In most cases, yes, it is an empty threat. However, the possibility is there. The company (or, individuals in the company who dislike you) can selectively use it against you to make your life harder. Or, if you whistleblow, they can use it to retaliate.

A curious parallel to this is a lot of company's "no reference" policies. Due to the fact that a negative reference can have legal ramifications in a lot of jurisdictions a number of companies have adopted a policy where they publicly state that no reference will be given to leaving employees. I've known several companies like this that will then inform employees that are leaving privately that they'll be happy to give them a positive reference.

Some parts of society can be really weird and distorting and I have no idea how we'd go about solving them.

Re: Send Noncompete Agreements Back to the Middle Ages

#59

Post by munk-a »

chris_engel wrote: post #30

Thank god the german law requires a NC clause to have a compensation directly mentioned in the contract that is not allowed to be less than 60% the person earned in the company in the last year she worked there. If the compensation is missing or too low, the NC is against the law. In other words: if a company wants me to not compete, they need to pay me for the time the NC is active. Its also limited to a maximum of…

If a particular NC is creating financial hardship can you still negotiate out of it? (I'm assuming while forfeiting the compensation)

Basically, "This NC is so burdensome I can't pay my mortgage if I obey it. I'm petitioning the court to release me from it and cease payment so I am not forced into foreclosure."

Re: Send Noncompete Agreements Back to the Middle Ages

#60

Post by ghaff »

mindslight wrote: post #52
rrggrr wrote: post #17

Q: I'm willing to pay you $100,000 to sign a non-compete to work on the project with my company. If I don't pay, the non-compete isn't valid. Okay? A: No. Q: $500,000? A: No. Q: $1m? A: No. Q: $10m? A: Yes. The point being... the problem is NOT non-competes. The problem is the exchange of value. They serve a useful purpose in support of business risk-taking and investment. Make them fair, not unenforceable.

In states that presently discourage non-competes, employers could easily offer parting employees a "stay at home" wage of say one third salary, yet they do not. Which implies they do not value non-competition anywhere near what the employee does. In general it's impossible to put a price on an unworkable concept. Attempting to do so just adds token compensation as a fictional justification for the existing problems.

Massachusetts now has 50% garden leave. But it’s not a panacea. Some see that and go where can I sign up. But the reality is that, for a lot of people, hanging out and maybe doing some side stuff for a year for half their former base pay isn’t a great or even practical option.
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