Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

The case for banning non-competes

slowboring.com

Post reply on HN
Print view View original

121–130 of 338 posts

Re: The case for banning non-competes

#121

Post by daveFNbuck »

johnrbent wrote: post #107

> The main idea of the non-compete agreement is that employers want to stop people from walking off the job and taking trade secrets to rival companies. If companies weren’t able to secure those protections, they’d need to pay lower salaries, and we’d all be worse off. Anyone else confused by this statement? How do you make the leap from non-competes to higher salaries, or conversely, that a ban on non-competes would…

I think the idea is that the non-compete increases your value to the company, and that your salary is strongly tied to your value to the company. Both of those are pretty questionable.

Re: The case for banning non-competes

#122

Post by cletus »

So let's differentiate between conflicts and noncompetes.

Conflicts arise when you do work for someone else while employed by a company that may compromise your ability to effectively work for that company or may be detrimental to that company's business. This is an employment condition that is common and reasonable burt with large companies may exclude pretty much everything because large companies compete everywhere.

Often companies will have a blanket rule on such things. This could be as simple as "this is your full time job, you can't have another" but it shouldn't exclude running a restaurant if your company is a food delivery app.

Noncompetes apply after the end of employment. There are a very few high-level employees for which this makes sense. If someone can leave a company and take all that company's clients then that's a problem. But again noncompetes are used for normal employees that make no sense.

We don't need to ban them. We need to force companies to pay for the privilege.

Courts generally uphold the principle that a company can't deny you the reasonable ability to earn a living. So if you're a plumber and your noncompete says you can't work for another plumber within the same state then that's likely not enforceable.

Rather than this interpretation, how about we force companies to say "we will pay you a year's salary upon termination and you agree not to work for X".

I think you'll see a whole lot less noncompetes.

Re: The case for banning non-competes

#123

Post by masklinn »

trentnix wrote: post #62
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)…

> I'm in a US state that allows non-competes and recently turned down a job because I wasn't comfortable with the non-compete 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?

FWIW you can try editing the contract, removing the NCC clause, or tacking on steep consideration for exercising the NCC (as well as hard limit on it).

If they never sued anyone and have no intention to, they don't need an NCC clause, strike it out and ask them to sigh the updated contract.

Re: The case for banning non-competes

#124

Post by gumby »

throwawaygh wrote: post #111
gumby wrote: post #104

Earlier quoted context omitted.

I share your concern but modulate the concern with two factors (you may not agree): 1 - if you work at a company like that (faang, basically) you probably have a choice of working elsewhere and they are paying you handsomely to give up the ability to have almost any software or electronics side projects (my gf wants me to go work at one of them and I have decided it’s not worth the money, though I can understand why…

> if you work at a company like that (faang, basically) you probably have a choice of working elsewhere Heh. I advise early career students from my alma mater. One of them took a job with a mom-and-pop web dev + IT firm. Super mom and pop. Like, maintaining word press and similar installs for maybe a few hundred clients and then bundling that with generic IT services (computer repair, maintenance, blah blah blah). Ba…

Yeah, Junior devs are in the majority who don't have a symmetrical relationship with the employer. In California such a broad remit would not be enforceable.

FWIW court battles are rare. But better to get rid of the noncompetes regardless.

> > 2 - every such agreement I have signed has had a “carve out” clause: you can list things you’ve been working on (which is vague, I have listed areas I’m interested in and have looked into and counted that as ”work”) and exclude the stuff listed there from the agreement.

> Wait, are you sure that list works how you think it does?

Yes, that's the whole point of that list and the language is very clear.

FWIW I've mostly been the employer, not the employee and I always scrutinize those lists carefully (if someone writes anything there I have to approve it before the agreement can be signed). Not because I care what people do in their free time, but to see if there's anything there that could cause a disagreement, especially if it would be an innocent disagreement. And I have never seen anyone write something that seemed unreasonable there. TBH most people leave that blank.

These docs always go with the employment offer; if the employee doesn't see them until their first day what kind of negotiation is there then? The whole point is to have someone join us and be happy to work with us, not to take advantage of them.

Re: The case for banning non-competes

#125

Post by MajorBee »

masklinn wrote: post #57
lifeformed wrote: post #52

Earlier quoted context omitted.

If you're using melodies and samples from work hours, then maybe not. And it would be tough to argue that your at-home trading app code is completely uninfluenced by ideas you have at work.

> If you're using melodies and samples from work hours, then maybe not. That would not be a question of competition, but of IP theft. > And it would be tough to argue that your at-home trading app code is completely uninfluenced by ideas you have at work. How is that of any relevance? I can have ideas about a better way to wipe my ass at work, is my novel ass-wiping implement competing with the company? And even if i…

Well, if your company is in the ass-wiping business...

Re: The case for banning non-competes

#126

Post by ghaff »

laGrenouille wrote: post #117
masklinn wrote: post #48

Earlier quoted context omitted.

> There are two kinds of non-competes, and both have problems. There are more kinds of non-competes. Neither of the kinds you're listing is blanket-legal anywhere in Europe, as far as I can tell, but there are still NCC/NCAs. Generally speaking, in Europe, NCC/NCAs must: * show a reasonable business interest, mere competition does not ever qualify * be geographically limited * be temporally limited (rarely more than…

> be financially compensated (significantly, usually on the order of 50% gross salary for the entire period) I think this is the most important protection that's needed in the US. NCCs for high-level executives with golden parachute clauses actually makes a lot of sense. If their former company is essentially paying them (usually a lot!) after they leave during the NCC period, that is unlikely to get abused and overu…

For C-suite execs, I can definitely see it being a reasonable thing. And, honestly, at that level especially in large companies, skills are far more transferable to even totally different industries.

Re: The case for banning non-competes

#127

Post by baron816 »

trentnix wrote: post #62
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)…

You did the right thing. It’s totally possible that they come back to you and say “alright, we’ll drop the non-compete.” Especially if the feds appear to be heading towards voiding them all anyway.

Re: The case for banning non-competes

#128

Post by skohan »

jakelazaroff wrote: post #73
elliekelly wrote: post #51

Earlier quoted context omitted.

> We do ML, you can't do ML outside of work (I asked legal that one). Keep in mind the legal department represents your company , not you. They will tell you the interpretation of the non-compete most favorable to their client. It doesn’t mean it is correct or even enforceable.

Sure — but if they use that interpretation to decide whether to pursue a lawsuit, then it's relevant to you even if it turns out to be unenforceable. (See the last couple paragraphs of this comment: https://news.ycombinator.com/item?id=27857407 )

Yeah especially in the US, if a large corporation wants to pursue legal action against you, this can be enough to destroy your life. In lots of places, the loser of a lawsuit has to pay the legal fees of the winner, but that's not generally true in the US. That means a large law firm or legal team can file a dubious lawsuit in such a way as to tie up years of your life, and cost you a significant portion of your wealth.

Re: The case for banning non-competes

#129

Post by masklinn »

knappe wrote: post #45
mountainriver wrote: post #12

Earlier quoted context omitted.

What state is this?

California, in all likelihood. California Business and Professions Code Section 16600, “every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.”

Probably not california, NCC applicability / legality is so restricted that I don't see how

> they could try to make my life difficult with legal proceedings if they wanted.

could work, the first judge involved would throw the entire thing out and threaten the company for wasting the court's time.

Re: The case for banning non-competes

#130

Post by lostcolony »

ghaff wrote: post #114
lostcolony wrote: post #89

Earlier quoted context omitted.

This is a bit out of date, but - https://www.beckreedriden.com/wp-content/uploads/2019/01/Non... There are three states where non competes are essentially not permitted. California, Oklahoma, and North Dakota. Now, certainly, it's up to the company whether or not it imposes a non-compete, and to what it covers/applies to. It might be that you never took a job with one. But I've been subject to them at every place I'v…

I've never had one in LA, MA, or NH except for one time when EMC (who was one of the big players who resisted the non-compete changes that MA finally put in place) acquired the company I was at. The non-compete was reasonably narrow in scope--couldn't take a senior exec position at a storage vendor--but they were also very clear this wasn't negotiable. But I've certainly been aware of non-compete enforcement by the b…

Certainly; I don't think anyone is claiming they're universal. Just that enough players do it that it's a concern; you can't easily name and shame the companies that do have them, as an employee, because most companies do. And that they're net negatives, and shouldn't be legal (at least, not in the form many are in).
Post reply on HN