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The case for banning non-competes

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Re: The case for banning non-competes

#61

Post by Uehreka »

cortesoft wrote: post #3

My feeling has always been that non-competes are ok as long as it is an entirely separate agreement from employment. For example, you can sign a contract for $100,000 that you won’t work in field x for 2 years. If you decide to work in the field, you give up that money. The unfair thing is making it just a part of the standard employment contract.

I have never heard of an employer detaching a noncompete from the terms of employment, much less offering anything like $100k as a carrot. If some employers do this, then cool, but I don’t find a lot of merit in arguing about whether it’s OK to do something that almost nobody does.

Many many employers attach noncompetes to the terms of employment, won’t modify them for anyone and have the leverage to make even developers sign it (the job market’s good, but it’s not that good). That’s a bad state of affairs, and it really seems like employers won’t drop this unless compelled to, we aren’t going to be able to negotiate them into the deal you’re describing.

Re: The case for banning non-competes

#62

Post by trentnix »

mabbo wrote: post #23

There are two kinds of non-competes, and both have problems. First, there's the really nasty ones saying "If you ever work here, you can't work for any competitor for X years", and they're clearly abusing of employees, labor, etc. I hope there is a straight up ban on that. The second kind is "You can't compete with us while you work here". And that is a much more complex beast. Obviously, if I work as a developer mak…

But my employer does everything. There is no field that my employer is not involved in, somehow. You can guess who they are, probably, or just read my profile. And they say "You cannot do anything that competes with anything we do". Which is everything. Want to make a Sudoku app? That's a game, we do games. Want to do some open source ML library work? We do ML, you can't do ML outside of work (I asked legal that one). And that's ignoring the who-knows-how-many secret un-released projects that might relate.

I'm in a US state that allows non-competes. I recently turned down a job because I wasn't comfortable with the non-compete I was compelled to sign expressly because the company's opinion of its own market was so broad. They implored me to trust that they had "never sued anyone" and "have no intentions to", and I think they honestly believe that. But then why have the non-compete at all?

And even if they are true to their word, what happens when they sell the company to someone else that exploits the leverage the non-compete provides?

A friend of mine was sued by their ex-employer over the violation of a non-compete. He lawyered up and fought it. And he won! But it was a Pyrrhic victory that resulted in a significant expensive of time (the judge granted an injunction that forced him out of business until the case was resolved - which was around 18 months) and money (he was granted no financial judgement). I am convinced the plaintiff's lawyer knew they'd lose, but to the suing party the process was punishment and that became their goal.

His should be a cautionary tale - even if you're advised that the non-compete isn't enforceable, it can still hurt you.

Re: The case for banning non-competes

#63

Post by alistairSH »

fallingknife wrote: post #28
ghaff wrote: post #4

Earlier quoted context omitted.

Some people might think that was a good deal to travel the world but not everyone. So you're at the peak of your career and you need to take a couple years off at significantly lower total comp (because no bonus/equity).

But a non-compete doesn't mean that you have to take that time off. It means that you can't work for a competitor.

Sure, but depending on employer or industry, that could be many/all other employers.

Biologist/chemist working on novel drugs - pretty limited field.

Developer at Amazon - Amazon does a bit of everything, I bet their legal team would prefer you didn't work elsewhere.

As noted elsewhere, it's not even so much about an NDA/non-compete is enforceable - just the threat of legal action is enough to stop employees moving or stop other employers hiring people.

Re: The case for banning non-competes

#64

Post by brightball »

Teknoman117 wrote: post #33

I lived in Alabama for 4 years or so and at least at the time (I have no idea if it's changed since I left), their non-compete situation was garbage. They were valid and enforceable even if you got laid off or fired. One of my friends' mother got laid off in the 2008 financial crisis from Bellsouth (or AT&T, I don't recall if the (re)merger was finished yet). She was told she couldn't work for any other telecom in th…

In right to work states, non-competes can’t prevent you from earning a living.

Re: The case for banning non-competes

#65

Post by ghaff »

deregulateMed wrote: post #56
ghaff wrote: post #49

Earlier quoted context omitted.

You live in a serious bubble if you think the typical person can shrug, say "what's $200K," and casually leave or take a break from the field they've been earning a living in.

We are talking about people who's company actually used the non compete. These are not typical people.

There is absolutely no guarantee of this.

Re: The case for banning non-competes

#66

Post by awsthro00945 »

deregulateMed wrote: post #56
ghaff wrote: post #49

Earlier quoted context omitted.

You live in a serious bubble if you think the typical person can shrug, say "what's $200K," and casually leave or take a break from the field they've been earning a living in.

We are talking about people who's company actually used the non compete. These are not typical people.

You really underestimate. Even standard entry-level developers are under NCAs, and I've had a former colleague (who was certainly "typical", and an additional $200k would have been life changing for them) who was hit with one. I have many other colleagues (again, just "typical" people) who lost out on job offers because the new company didn't even want to deal with the threat of an NCA.

Re: The case for banning non-competes

#67

Post by Avshalom »

WaitWaitWha wrote: post #40

EDIT: I have completely went off on the wrong thought path. As noted, despite reading the article and comments, somehow my mind got latched onto NDAs instead of NCAs. Sorry. ---- I will be the contrarian. For those who insist on no NDA , what prevents ex-employees from spilling secrets to be hired at a competitor? I understand the concerns with NDAs. I was under one which limited my work in a radius, and within a ver…

Arguing for the status quo is not contrarian.

Re: The case for banning non-competes

#68

Post by Frost1x »

WaitWaitWha wrote: post #40

EDIT: I have completely went off on the wrong thought path. As noted, despite reading the article and comments, somehow my mind got latched onto NDAs instead of NCAs. Sorry. ---- I will be the contrarian. For those who insist on no NDA , what prevents ex-employees from spilling secrets to be hired at a competitor? I understand the concerns with NDAs. I was under one which limited my work in a radius, and within a ver…

It's interesting how we celebrate that capitalism instills competition that leads to global improvement for everyone, yet we like to hand-pick the segments of capitalism where we want competition and the segments we don't want competition. An NDA is one case of this, as are non-compete agreements, and many behaviors within cartels, say when Apple et al conspired to not hire each others labor.

Usually, this hand-picking is performed by those succeeding the most in the given system because they have resources and leverage to dictate such terms and force them on others, yet another anticompetitive behavior. The fact is that most people just celebrate capitalism when it benefits them and reject it when it doesn't.

Personally, I think any such agreements should be illegal. If we had more labor unions where the labor force organized and created their own anticompetitive behaviors to counter balance the leverage of large capital holders, then I'd be far more sympathetic. Such is not the case and the labor force is on a near Darwinian level of competitiveness so I have no sympathy for any sort of anticompetitive behaviors from businesses.

To be clear, I understand how this perspective blows up many business models, but it has also blown up the livelihoods of many of us in the labor force on this push to commoditize labor for the goodness of whatever. I say, why don't we commoditize these business secrets for the same unknown goodness? Why is it we keep picking and choosing who gets breaks on competition and who doesn't. Let the markets decide.

Re: The case for banning non-competes

#69

Post by ARandomerDude »

Teknoman117 wrote: post #33

I lived in Alabama for 4 years or so and at least at the time (I have no idea if it's changed since I left), their non-compete situation was garbage. They were valid and enforceable even if you got laid off or fired. One of my friends' mother got laid off in the 2008 financial crisis from Bellsouth (or AT&T, I don't recall if the (re)merger was finished yet). She was told she couldn't work for any other telecom in th…

Unless I were really a big deal, I probably would have just gone to another telecom anyway. They have to notice you're at the other company, then go through the trouble of suing you. For relatively low-level workers, I doubt it'd be worth the trouble.

I am not a lawyer and this is not legal advice.

Re: The case for banning non-competes

#70

Post by masklinn »

mrweasel wrote: post #10

You don’t exactly need to ban them, but the employees should be compensated during the non-compete period and limit the lenght of the non-compete contract. In Denmark my employeer can’t make non-compete contract for more that 12 month, during which I’m entitled to 60% of my salery. It’s also only valid within the same field. That is: You can’t jump from Microsoft, developing Windows, to Apple and work on macOS, but y…

> In Denmark my employeer can’t make non-compete contract for more that 12 month, during which I’m entitled to 60% of my salery. It’s also only valid within the same field. That is: You can’t jump from Microsoft, developing Windows, to Apple and work on macOS

You probably can tho, unless they're justifying that you're privy to some super important stuff which endangers the company if you go work for Apple. Which… seems like something you'd have a hard time convincing the labour court of.

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