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Resistance to Noncompete Agreements Is a Win for Workers

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Re: Resistance to Noncompete Agreements Is a Win for Workers

#21

Post by freewilly1040 »

bradleyjg wrote: post #14

There are trade-offs here even if looked at purely from the worker's point of view. While it is probably strictly superior from that POV to have the exact same job with the exact same terms except without a non-compete, the inability to commit to a non-compete means that the equilibrium is shifted and the exact same job with the exact same terms likely wouldn't have existed in the first place. Perhaps on the balance…

Noncompetes are a free lunch, for employers. They get to suppress wages at no cost to them.

As for them being necessary for certain jobs to exist, I’ll believe it when I see it. Different states are governed by different laws, so if it does happen examples shouldn’t be hard to find.

Re: Resistance to Noncompete Agreements Is a Win for Workers

#22

Post by freewilly1040 »

detaro wrote: post #4
fhrow4484 wrote: post #3

In Washington State, there was an almost full-ban on non-compete that was proposed a few years ago. Google came to the public hearings with full support for the law as it is (which make sense given the status for non compete in California - and how it got sued by Microsoft over one employee). The law would have made it that non-compete are void if laid-off, and void if over 1 year max or if you're not an executive em…

> - if employee is laid off and non compete is enforced, the company must pay base salary for the duration of non-compete. That sounds like a pretty big "nothing" to get out of it?

It’d be interesting to see data on what happened to the number of non competes enforced before and after the new law. That sounds like a pretty big disincentive to enforce them.

Re: Resistance to Noncompete Agreements Is a Win for Workers

#23

Post by lovich »

baronswindle wrote: post #16
bradleyjg wrote: post #14

There are trade-offs here even if looked at purely from the worker's point of view. While it is probably strictly superior from that POV to have the exact same job with the exact same terms except without a non-compete, the inability to commit to a non-compete means that the equilibrium is shifted and the exact same job with the exact same terms likely wouldn't have existed in the first place. Perhaps on the balance…

This is a great point. Non-compete agreements reduce risk of losing otherwise unprotected information to a competitor and probably increase retention of valuable employees. So preventing employers from using these agreements would increase risk and turnover, and employers might (read: probably would) decrease offered compensation in response. Now, this effect might be dwarfed by the upward pressure on compensation ca…

I disagree with the assumption here that employers are offering increased compensation. When it's standard practice to have non competes _and_ they take years to be out of effect then you don't get competition that would require increased compensation for employees.

At this point even if a competitor jumped in and offered no non competes for the same wage, it wouldn't matter as no one can work for them. The mechanisms of capitalism require little to no barriers to entry and industry wide practices like non competes add large barriers which prevent the normal supply and demand mechanisms

Re: Resistance to Noncompete Agreements Is a Win for Workers

#24

Post by baronswindle »

paxys wrote: post #18
baronswindle wrote: post #7

I am bound by a non-compete agreement, but until a few months ago, I didn’t remember that I had signed it. At that time, I received an offer for much more money and more responsibility from a competitor. However, a close friend and co-worker reminded me about the agreement when I told him I was mulling the offer. Ultimately, I decided I didn’t want to risk asking my manager for a release, and I certainly didn’t want…

> I don’t think it’s unreasonable to allow organizations to protect that kind of information. Why though? As you pointed out, it isn't protected IP, but rather knowledge and skills that YOU have developed and hold in your head. Does the company legally or morally have any license over or?

I didn’t learn this information in a vacuum nor on my own time. I worked on systems where I saw abstractions that worked well and others that could be improved. I spoke and tested ideas with users. I attended meetings where people presented findings that were the product of hundreds of hours of work and read countless reports with similar information.

If I left for a competitor, I would be working on a lot of similar problems. Of course, I wouldn’t immediately tell my new employer everything valuable I learned in my old job, but in the normal course of doing my new job, I inevitably would reveal information that my old employer spent time and money to learn.

Re: Resistance to Noncompete Agreements Is a Win for Workers

#25

Post by 1over137 »

ironmagma wrote: post #19
dredmorbius wrote: post #15

Earlier quoted context omitted.

It's talent, not employers, in short supply.

Not really true. The whole existence of a “brain drain” indicates that the places the workers are coming from have insufficient opportunities.

Or sufficient opportunities, but less compensation.

Re: Resistance to Noncompete Agreements Is a Win for Workers

#26

Post by matthewdgreen »

baronswindle wrote: post #7

I am bound by a non-compete agreement, but until a few months ago, I didn’t remember that I had signed it. At that time, I received an offer for much more money and more responsibility from a competitor. However, a close friend and co-worker reminded me about the agreement when I told him I was mulling the offer. Ultimately, I decided I didn’t want to risk asking my manager for a release, and I certainly didn’t want…

The problem with this line of reasoning is that it is not solely your decision to make. We as a society, as taxpayers and potential jury members, are being placed on the hook for the costs of enforcement and the negative consequences on the local economy that these agreements produce. If you and your employer want to engage in a non-enforceable personal agreement to avoid competition, that’s (mostly) your business. But if you ask us to use the court system we taxpayers pay for to enforce it, things are very different.

Re: Resistance to Noncompete Agreements Is a Win for Workers

#27

Post by pfarnsworth »

baronswindle wrote: post #7

I am bound by a non-compete agreement, but until a few months ago, I didn’t remember that I had signed it. At that time, I received an offer for much more money and more responsibility from a competitor. However, a close friend and co-worker reminded me about the agreement when I told him I was mulling the offer. Ultimately, I decided I didn’t want to risk asking my manager for a release, and I certainly didn’t want…

I'm sorry you feel this way. You lost out on a good opportunity because of an asymmetrically unfair legal agreement that you had to sign. I'm glad I live in California where it's not enforceable. If you came to California, you would see that your supposedly valuable knowledge isn't as valuable as you think. Certainly it has some value because you learned how to be good at your position, but it wouldn't tank the company, no one is that important.

Re: Resistance to Noncompete Agreements Is a Win for Workers

#28

Post by dredmorbius »

ironmagma wrote: post #19
dredmorbius wrote: post #15

Earlier quoted context omitted.

It's talent, not employers, in short supply.

Not really true. The whole existence of a “brain drain” indicates that the places the workers are coming from have insufficient opportunities.

Which results in talent being in short supply.

The talent is both better rewarded and considered and treated elsewhere.

It's quite possible for talent to depart locations based on nonfinancial considerations, or considerations with indirect financial effects, as with noncompetes. The Great Migration and Jewish refugee migration (1920s-50s, and later, Europe) are cases in point.

On multiple grounds, California ~1960 - 2000 offerred both better compensation and better considerations for technical talent. The pendulum is swinging based on a few factors, notably housing costs an conditions.

Re: Resistance to Noncompete Agreements Is a Win for Workers

#29

Post by AlexandrB »

baronswindle wrote: post #24
paxys wrote: post #18

Earlier quoted context omitted.

> I don’t think it’s unreasonable to allow organizations to protect that kind of information. Why though? As you pointed out, it isn't protected IP, but rather knowledge and skills that YOU have developed and hold in your head. Does the company legally or morally have any license over or?

I didn’t learn this information in a vacuum nor on my own time. I worked on systems where I saw abstractions that worked well and others that could be improved. I spoke and tested ideas with users. I attended meetings where people presented findings that were the product of hundreds of hours of work and read countless reports with similar information. If I left for a competitor, I would be working on a lot of similar…

> Of course, I wouldn’t immediately tell my new employer everything valuable I learned in my old job, but in the normal course of doing my new job, I inevitably would reveal information that my old employer spent time and money to learn.

This is ridiculous. Modern employers don't even invest much in employee training anymore and expect you to come with all the skills you need. And non-competes are like -ve training where anything you learn you're expected not to use for a period (and you forget some of it in the meantime).

In the big-picture view this seems like a huge waste of a country's human resources. When people are switching jobs the match between employee position is forced to be sub-optimal by non-competes, reducing overall productivity.

Edit: It's giving employers an awful lot of credit to say that they "spent time and money" to learn something. An employer is already short-changing their employees by paying them less than their productivity (see: profit). It's more accurate to say that you're spending time and money (in the form of profit you give up to the employer) to learn something for their benefit. And now the employer is expecting to have a monopoly on that as well. Terrible deal for a worker.

Re: Resistance to Noncompete Agreements Is a Win for Workers

#30

Post by baronswindle »

AlexandrB wrote: post #29
baronswindle wrote: post #24

Earlier quoted context omitted.

I didn’t learn this information in a vacuum nor on my own time. I worked on systems where I saw abstractions that worked well and others that could be improved. I spoke and tested ideas with users. I attended meetings where people presented findings that were the product of hundreds of hours of work and read countless reports with similar information. If I left for a competitor, I would be working on a lot of similar…

> Of course, I wouldn’t immediately tell my new employer everything valuable I learned in my old job, but in the normal course of doing my new job, I inevitably would reveal information that my old employer spent time and money to learn. This is ridiculous. Modern employers don't even invest much in employee training anymore and expect you to come with all the skills you need. And non-competes are like -ve training w…

Contracts of all sorts increase switching costs, but they also potentially create value. Sure, in some cases, one or more parties could become better off by taking some action that is prohibited by the contract, but that doesn't mean that we would be better off as a society if we outlawed all contracts that have the potential to encumber somebody in the future.
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