Finland is currently transitioning to a system where employer must compensate for the time employee is restricted, and all previously agreed contracts must be either terminated before this year ends or employee will get paid for the time according to the new law - 40% of the salary if restriction is for less than six months, 60% if more than six months.
Laws barring noncompete clauses spreading
71–80 of 224 posts
Re: Laws barring noncompete clauses spreading
#72I think a better system is an up-front repayable bonus: "We'll pay you $2k on sign-on, but you have to stay for 2 years" or something. This benefits job applicants (extra money!), employers (retention), and protects applicants (employers abusing non-compete agreements for everything), and is a far easier legal process to execute.
I don't see how this addresses non-competes at all. Also that is already how many sign-on bonuses work.
Retention is only tangentially related to non-competes. People leave for all sorts of reasons. If a company wants to restrict what they can do after they leave then they can pay them for that supposed value. We'd find out really quickly that most non-competes are bunk.
Not to mention that you'd need to add a couple zeroes to that sign-on bonus for it to mean squat to anyone actually working with valuable proprietary information.
Re: Laws barring noncompete clauses spreading
#73Good riddance to this form of wage suppression. Let's do forced arbitration next.
For some reason (I never dug deeper), my friend who is an attorney said she prefers arbitration. Maybe because she already is an attorney? The only thing I can think of is that it is more expedient and having seen behind the curtain the talk of biased arbiters (biased towards the Goliath) are exaggerated. But if anyone can opine I'm all ears.
Forced arbitration is bad for employees, based on empirical evidence
* It has a chilling effect: less disputes are filed
* employees prevail less often
* when employees do win the employee portion of the award is less than standard litigation
https://facesofforcedarbitration.com/wp-content/uploads/2019...
Re: Laws barring noncompete clauses spreading
#74Earlier quoted context omitted.
This would make things interesting. I kind of want to see what would happen if states passed laws saying that all non-compete clauses contained an implicit agreement that the employee be paid their entire salary (including bonuses) for the pro-rated duration of the non-compete and that such clauses can be triggered by either party. We all know the value of a non-compete clause is $0 for most employees. Hell, they are…
The best part would be the rapid "Oh no, we don't need you on a non-compete anymore" throughout the state the day after the law passed. All of sudden how to fold sheets the Ramada way isn't a highly confidential trade secret.
>The best part would be the rapid "Oh no, we don't need you on a non-compete anymore"
I've witnessed this on the other end. Someone was being pressured to engage in sales that would violate her non-compete that was openly discussed during the hiring phase. When she essentially said, "Sure, I have no problem breaking it as long as you put it in writing that you'll cover any legal fees" suddenly the new employer didn't think sales in that region were quite as important.
Re: Laws barring noncompete clauses spreading
#75Earlier quoted context omitted.
Does JJ refer to their employees as sandwich artists too? I thought that was just a Subway thing. But yeah, beyond ridiculous, as if a JJ employee is going to leak some crazy trade secret to Subway or whoever.
That's the most hilarious double speak. I can only imagine the repressed artists getting told off for putting 5 slices of cheese on a foot-long instead of 4. "I was just trying to express myself, you said I was an artist."
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Re: Laws barring noncompete clauses spreading
#76Over the years so many different jurisdictions around the US and the world have stated their desire to be the "next Silicon Valley" and have poured an immense amount of money and effort to make it so, whether in the form of incentives for businesses, tax breaks, education, job training, or even just straight paying smart people to move there. Every such scheme has generally failed because they refused to emulate the…
Here (Canada) the courts almost always rule that the non-compete is unenforceable. The core issue is the rights of an individual to earn a living supersedes the rights of a corporation.
https://globalnews.ca/content/8363992/can-non-compete-clause...
" The majority of non-compete clauses challenged in the judicial system have been rendered unenforceable. Canadian courts, in my experience, look unfavourably on clauses that restrict an individual’s ability to use their knowledge and experience to earn a living."
What companies here do falls into two general categories:
1) attempt to get people to sign and hope they don't know it is unenforceable.
2) pay people to stay at home and not-compete - Given this is expensive it doesnt happen often.
Re: Laws barring noncompete clauses spreading
#77The existence of non-competes doesn't surprise me and I'm OK with companies being allowed to require them. But what shocks me is that companies do not offer commensurate severance packages. If you have a 12-month non-compete, then you'd better pay 12 months of total compensation as severance. Over the past year, I did 3 intense long interview loops and declined 2 offers and accepted the third (a FAANG where I work now). The first two places had me jumping through hoops - take home assessments, tricky behavioral interviews, intense live coding, etc., amounting to like 10+ interview rounds spent evaluating me before making an offer. At the offer stage I politely mentioned that the offer letter included an X-month non-compete agreement and I was only able to consider signing if the doc was amended to also include an X-month severance package with clear terms on "just cause" firings (when severance is exempted) and "good reason" quitting (when severance is owed even if I quit, very common in cases where 'just cause' is included), or, I offered, the non-compete can just be removed (one of the two firms already had its main presence in California but I live on the east coast where this role was based ... but still, why a company already complying with laws banning non-competes for 90% of their workforce feels a need to include it for east coast employees is just beyond me).
Of course, they both completely balked at this and we could not move forward so I declined both offers. The third company had a non-compete initially but removed it as soon as I asked - it was completely pedestrian.
It's an indication of crazy entitlement on behalf of employers that they think workers should give away *for free* significant rights (like, uh, getting a new job quickly after a layoff, in your field of expertise). These rights are clearly not compensated as part of your base compensation from a job offer and any employee would be crazy to agree to those terms without severance protection. It just communicates bizarre entitlement and unprofessionalism. I hope more candidates will wise up to this and require severance packages or else decline the offers.
Re: Laws barring noncompete clauses spreading
#78Earlier quoted context omitted.
This is not enough of an excuse to encumber someone from earning a living elsewhere. > “Employers need to get creative about how to impose restrictions to protect themselves against individuals” in whom they have made significant investments, or who have been allowed access to trade secrets, to protect themselves against such employees leaving, said Maxwell N. Shaffer, a partner with Holland & Knight LLP in Denver. T…
What is being banned are non-competes that don’t pay someone to not compete. There are legitimate reasons for actual non-competes in many of these cases, and CAlifornia for instance just requires you pay them for it. Which in such a situation seems justified.
> What is being banned are non-competes that don’t pay someone to not compete.
Employers will just say "the no-compete compensations is built in to your pay".
Re: Laws barring noncompete clauses spreading
#79IMHO, companies should have to compensate the employee for the period of the non-compete since they're still effectively working for them. Salary limits are okay, but don't really go far enough. If they want this it has a value and should be compensated for fairly.
Yep. This is what we do in finance. It sucks a bit because most of our comp is bonus and you only get your base pay on garden leave, but I’m shocked this isn’t a requirement.
Garden leave isn’t a panacea. And in MA it’s minimum 50% of salary. It does make the employer put skin in the game which is no small thing. But it may end up with someone not being able to be in a competitive job for a year for maybe 25% of their prior comp. Not a great situation for a lot of people.
Re: Laws barring noncompete clauses spreading
#80Years ago I had a former CEO throw a ridiculous tantrum over me leaving to work for a different company in an adjacent industry. He emailed me demanding I quit my job.
A quick review with a lawyer that the non-compete is unenforceable in my province and a nastygram sent by my lawyer, and he took his tantrum elsewhere.
The problem is that so many people, including some I know, get scared at the prospect of legal action that they fold, letting bully CEOs win.
These laws will help.