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The case for banning non-competes

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Re: The case for banning non-competes

#131

Post by claytonjy »

austincheney wrote: post #80

I have never encountered a non-compete in my home state of Texas, so I looked this up: https://www.texasnoncompetelaw.com/articles/noncompete-agree... It appears in Texas non-competes are a thing, but only to restrict the direct transfer of business/market responsibility to a competing business, which I imagine generally applies to only senior executives and sales agents. It seems at one point almost all of the trave…

Good to know; I got a rather broader non-compete from an Austin startup recently, though they have an overseas HQ. To their credit, they removed it upon my request, though I ultimately accepted a different role.

Re: The case for banning non-competes

#132

Post by ghaff »

benrbray wrote: post #18
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.

> sign a contract for $100,000 that you won’t work in field x for 2 years Wow, sign me up!

Most people are not in the position to take a couple years off for $100K or to work, for almost certainly lower pay, in an unrelated field assuming they can find a professional job.

Re: The case for banning non-competes

#133

Post by skohan »

benrbray wrote: post #18
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.

> sign a contract for $100,000 that you won’t work in field x for 2 years Wow, sign me up!

It could be a really bad deal if you're basically throwing away 2 years of your career when you have maximum bargaining power

Re: The case for banning non-competes

#134

Post by rytis »

etothepii wrote: post #88
rytis wrote: post #41

I'm in this pickle right now. It's a scare tactic. New employer would not take a bet, and that's understandable. Current employer responds with the most vague legalese possible to my straight up question "are you going to enforce?". The choices are: a) take a gamble against an entity that has so much more to fund their legal team than I will ever dream of or b) suck it up. Take a guess what most people pick, even if…

Have you checked if your legal fees might be covered on your home contents policy.

I do have legal coverage as part of home insurance package, however, it seem that it's only against direct "attack" towards me, and employment disputes aren't covered. Pretty useless tbh.

Re: The case for banning non-competes

#135

Post by ozim »

wolverine876 wrote: post #91
trentnix wrote: post #62

Earlier quoted context omitted.

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)…

> 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? Exactly. 'That's great; we can resolve that issue easily. Let's just skip the non-compete - you're not using it anyway and I'm not comfortable with it.' EDIT: A non-lawyer's suggestion (talk to a lawyer before you do this): Skip signing or edit do…

They are not using it but just imagine that company gets acquired by people who do those kind of things.

Contract with company is not contract with current management only. I don't know who will be there in 2 years in charge.

My current company was acquired by a bigger company like a year ago, fast forward one year - even bigger company is now owner of our parent company.

Re: The case for banning non-competes

#136

Post by jvreagan »

masklinn wrote: post #60
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.

Problematically though, in most of the US ridiculously broad NCCs are enforceable. The only place where you're safe is California, where the only way for an NCC to stick is related to business (co)-ownership (selling the business, dissolving a partnership, or dissolving an LLC). Out-of-state NCCs are also un-enforceable in California.

I would like to understand whether there are any states that even occasionally backs the employer in non-competes for the general layperson. In my experience, courts tend to side with someone who's willing to work over employers.

This is why non-competes are a joke in the US. Courts aren't going to enforce them. Almost every state has an industry where moving between companies, or starting companies to compete with existing companies, exist (midwest auto industry, New York financial industry, Texas energy, etc).

It's great that California is so explicit. I wish other states would follow suit. But the only times I've ever seen a court uphold a non-compete is for highly (8 figures) compensated employees.

Re: The case for banning non-competes

#137

Post by ectopod »

light_hue_1 wrote: post #13

There's so much wrong here. > 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. No. If companies couldn't coerce workers to stay with them against their will, then they would have to pay better and be b…

>> 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.

> No. If companies couldn't coerce workers to stay with them against their will, then they would have to pay better and be better employers. And we would all be better off.

The author is presenting the standard business argument, i.e. trade secrets are good for business and society generally because they generate wealth, non-competes protect trade secrets, so without non-competes trade secrets would be revealed and business and society would be poorer, so everyone would be worse off. The author isn't agreeing with this pov (and neither do you or I), they want to ban non-competes.

Re: The case for banning non-competes

#138

Post by zippergz »

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)…

Also the people claiming (and believing) that they have no intention of suing are not the people who make the decision to sue or not (unless it's an extremely small company, or you are an important enough hire to be discussing this with the CEO and General Counsel). Even if they have the best intentions, some random recruiter or manager really has no insight into this.

Re: The case for banning non-competes

#139

Post by cortesoft »

benrbray wrote: post #18
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.

> sign a contract for $100,000 that you won’t work in field x for 2 years Wow, sign me up!

If it isn't worth it to the company to pay, then they should let the person work for a competitor.

Re: The case for banning non-competes

#140

Post by neilwilson »

This is where the U.K’s “try not to be a dick” approach to law wins out.

A former employer has to show the court that they will suffer genuine damage if the clause is not enforced and even then the court won’t enforce it unless it is reasonable. The case law on that is pretty tight.

If you’re setting up in direct competition and trying to poach clients and staff the courts will favour the former employer. If you’re just moving to another job then courts will likely favour you.

The courts recognise that there is an imbalance of power between employer and employer in the job market. Although each case turns on the specifics the English concept of reasonableness runs through its resolution.

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