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The case for banning non-competes

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Re: The case for banning non-competes

#221

Post by slymon99 »

TuringNYC wrote: post #21
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…

This sounds good in theory, and I was once presented with a job opportunity with something similar to this. Except much of the compensation was not in salary. So while salary goes down 60%, total comp goes down way more -- all the non-salary components goes to zero.

This is definitely a problem, especially because industries who frequently utilize the paid non-compete (e.g. finance) often have a significant percent of comp from non-salary (bonuses etc).

But you could fix this with craftier legislation instead of banning non-competes, e.g. maybe you have to pay the persons last years total compensation instead of just their salary

Re: The case for banning non-competes

#222

Post by mabbo »

tshaddox wrote: post #32
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…

> Obviously, if I work as a developer making a stock trading app, I shouldn't be making a competing stock trading app after hours. Why is that obvious? If I work as a studio musician can I also be working on my own album after hours?

You know, you're right?

I've been so indoctrinated in how non-competes work that I didn't even see that this wasn't obvious. Gah.

Re: The case for banning non-competes

#223

Post by jfengel »

verall wrote: post #215
jfengel wrote: post #209

Earlier quoted context omitted.

It's interesting to hear you say that, moments after coming from a thread where people were explaining why California is so terrible. I feel like the symbol of the 2020s is Chesterton's Fence[1], people chafing against restrictions and then having to reinvent them. I'm sure that some people are indeed fleeing California, and will then immediately start reinventing it. Not that that's necessarily a bad thing. The rein…

Maybe we could keep the protections for labor and drop the many additional protections for landowners.

I wonder if that would be necessary. San Francisco is kind of a special case as a small peninsula. That puts limits on the ways it can grow. You could probably build more housing units but you'll rapidly run into limits on streets, utilities, schools, etc.

I don't know how much the issue is with the rest of Silicon Valley. There used to be a lot of undeveloped area not too far from Palo Alto.

Texas may want to avoid the wrong kind of over-dense housing, since they've got plenty of land, though there are also reasons to encourage people not to commute multiple dozens of miles per day.

Re: The case for banning non-competes

#224

Post by mabbo »

adrr wrote: post #213
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…

The second one is worse than that. You’re a line cook and due to businesses not wanting to pay benefits. You can only find part time gigs. Forced to sign a non compete now limits your options for a second job. Line cook is an extreme example but it happens to other professions like personal trainers. There has been cases where non competes were forced on restaurant workers.

> but it happens to other professions like personal trainers

Funny enough, this exact issue caused me to lose a personal trainer.

See, he opened a gym that competed with the gym he trained me at. Like, he was the owner and manager of that other gym. While also being an employed personal trainer at my gym. And did not hide this fact from anyone.

When the gym told him he had to quit or be fired, even he was of the "I'm surprised it took this long" perspective and understood their reasoning.

Re: The case for banning non-competes

#225

Post by ownagefool »

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…

Actually.

Why shouldn't you be able to make a stock trading app after hours?

Re: The case for banning non-competes

#226

Post by s1artibartfast »

lamontcg wrote: post #163
lacker wrote: post #152

Earlier quoted context omitted.

The second kind is "You can't compete with us while you work here". It's just semantics, but these restrictions are usually not covered by "non-compete agreements". They are more often called something like an "IP assignment agreement", where you agree that anything you produce in your employer's area of work while you are employed there, the IP belongs to your employer. In practice, many employees simply ignore thes…

Yeah that would be solved by NDAs and trade secrets. Then if you write a stock trading app... Did you have any contact with the team that was writing the companies stock trading app, did you sign any NDAs about that, did you receive any information about that, did you have any trade secrets? No? Then they shouldn't have any claim. IP assignment and non-competes should be eliminated for non-managerial employees. Or fo…

NDAs and trade secrets are difficult to enforce in practice for many types of ip that can't go in a patent, like market and product strategy.

Re: The case for banning non-competes

#227

Post by b3morales »

ozim wrote: post #135
wolverine876 wrote: post #91

Earlier quoted context omitted.

> 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.

Not to mention that the person making the assurances -- hiring manager, or even worse, recruiter (who may not even be an employee!) -- is not likely the person who makes the decision to enforce the clause.

Re: The case for banning non-competes

#228

Post by lordnacho »

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…

The problem is that if there's any chance an employer will win, there's a cost that the employee needs to consider. If it's not clear that non competes are going to fail immediately, people are going to get bullied by letigious employers, and less letigious employers will actually benefit from the will-he-won't-he of it too.

Also note that there's a fair bit of legal myths floating around society, so if it's not made clear some people will end up backing out when they would have won.

Re: The case for banning non-competes

#229

Post by orangecat »

tshaddox wrote: post #32
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…

> Obviously, if I work as a developer making a stock trading app, I shouldn't be making a competing stock trading app after hours. Why is that obvious? If I work as a studio musician can I also be working on my own album after hours?

Why is that obvious?

Because it creates a clear conflict of interest; stock trading apps compete with each other much more directly than do music albums.

Re: The case for banning non-competes

#230

Post by HWR_14 »

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…

> it seems strange that any state would want to wound its own economy by restricting employee mobility.

That's because you think the goal is to maximize the state's overall revenue/economy. It's not. It's to maximize the income to specific well connected individuals and their investments.

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