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Laws barring noncompete clauses spreading

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Re: Laws barring noncompete clauses spreading

#91

Post by exabrial »

shagie wrote: post #58
exabrial wrote: post #46

Earlier quoted context omitted.

1) That would be IP theft, and is already covered by other laws. 2) That is the problem I think this solves: retain your key employees. Maybe pay them a bit better than that 2% annual raise.

Starting up a consultancy to do installation of your former employer's software for clients isn't IP theft. If I worked for Atlassian and then created a company that did consulting for how to install Jira and and organize workflows - there's no IP theft involved there. Creating a new competitor isn't about retaining employees. Consider the situation of https://en.wikipedia.org/wiki/Rose_Blumkin > In 1989, six years a…

I'm sorry, I misread the parent comment. I thought they meant recreating the the software, not installing it.

Re: Laws barring noncompete clauses spreading

#92

Post by lovich »

JackFr wrote: post #70
jahewson wrote: post #43

Earlier quoted context omitted.

lol, no. Confidential business information is an area heavily protected by law. Customer lists are the canonical example. It’s much easier to win this kind of civil suit than a criminal case. The court can absolutely crush a business that is founded in this manner to compensate the former employer.

Then why didn't Dunder Mifflin sue the Michael Scott Paper Company?

Assuming you were asking seriously, its a comedy show that was not trying to accurately portray how businesses run.

Re: Laws barring noncompete clauses spreading

#94

Post by ChrisMarshallNY »

lazide wrote: post #9
ptudan wrote: post #2

Makes a ton of sense. Completely absurd for security guards and administrative assistants to have non-compete clauses. Just another way businesses were trying to reduce the willingness of employees to quit so that they can suppress wages.

Admin assistants (like actual admin assistants) usually have access to full customer contact lists, and exposure to rather intimate details of the business and executives lives. They’re definitely not comparable to security guards in that sense.

There are already laws against taking trade secrets/proprietary information, and using it elsewhere.

You go to jail for that. It's called "theft."

My company had us sign a ridiculous NCA. It pretty much made it impossible to get a job anywhere, after leaving the company; even if they fired you, or laid you off.

Their description of a "competitor" was so vague, that it could, literally, be applied to a 7-11, as they potentially sold peripherals that could be plugged into our devices.

Re: Laws barring noncompete clauses spreading

#95

Post by lazide »

diob wrote: post #81
paxys wrote: post #40

Over 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…

Right, the idea is to train + pay them well enough that they stay. It helps the local economy because rather than your business putting more into investments around the world (or wherever the rich store / grow their money), that person puts the money in the local economy. Folks understand this, but their pay depends on them not understanding it so. . . here we are perpetually. Funny enough, paying folks well often wi…

I saw first hand a sales guy at a prior company I worked for start a side business directly competing with the primary business he was working for in his day job, while still working with them. Including redirecting customers while working for them.

The owner got suspicious due to some comments made by customers, and started listening in on the phone calls he was making on the company phone system.

This was a small business, and it nearly tanked the company, as the customers were confused as hell, and the ‘new’ company wasn’t doing well either. She ended up having to fire him, and sue him, but it took years, and meanwhile he kept operating.

He was paid well, but for some people it’s never enough.

I don’t care what anyone says, that is shitty criminal behavior.

Re: Laws barring noncompete clauses spreading

#96

Post by brindlejim »

Banning non-competes is a great idea.

However, everyone here should be aware that lots of startups are now including "power of attorney" clauses in their employment contracts that grant to the employer power of attorney to assign inventions to themselves. Feels like there's a lot of room for abuse, which could discourage moves to competitors.

Re: Laws barring noncompete clauses spreading

#97

Post by shagie »

exabrial wrote: post #91
shagie wrote: post #58

Earlier quoted context omitted.

Starting up a consultancy to do installation of your former employer's software for clients isn't IP theft. If I worked for Atlassian and then created a company that did consulting for how to install Jira and and organize workflows - there's no IP theft involved there. Creating a new competitor isn't about retaining employees. Consider the situation of https://en.wikipedia.org/wiki/Rose_Blumkin > In 1989, six years a…

I'm sorry, I misread the parent comment. I thought they meant recreating the the software, not installing it.

I'm thinking more the professional services / support. "I used to work for $foocorp, pay me $money and I will help you install your software and support it better than $foocorp offers."

Another example is Epic's "not quite a non-compete" is that they won't release the certificates(?) that an employee got for supporting their software (as part of employee training) for a period of time after separating from the company. I'll admit to being hazy on this but (I believe) that this is to make it difficult to start a consultancy for installing health care software right after leaving as you wouldn't be able to demonstrate the certificates that you got while working there (and getting them again is costly).

Though, if you want an example of "recreate the software" (though not with IP infringements), look at Dave Hitz and James Lau from Netapp and that they formerly worked at Auspex. I'm sure that they dotted all the 'i's and crossed all the 't's with leaving a company and starting a new one that became a direct competitor - but that sort of thing happens too. I'm not sure what California's non-compete laws were like in '92.

---

The "you can't work anywhere using a computer" as a non-compete is certainly something that isn't reasonable. A "you can't start a competing company and try to get former clients to switch to you after selling your old one" is enforceable.

So where does the "you leave a company and then start a consultancy that competes directly with the professional services, consulting, or support of the previous company" fall? That's a question I haven't found an answer to.

As to the bit on some things being enforceable: Blue Mountain Enterprises, LLC v. Owen ( https://law.justia.com/cases/california/court-of-appeal/2022... )

> Primary Holding

> Court of appeal upholds the enforcement of a restrictive covenant against a former employee who had sold his ownership interest in the company while concurrently agreeing to the covenant.

And we've got an example where a non-compete / non-solicitation agreement was enforced, appealed, and found correct.

Re: Laws barring noncompete clauses spreading

#98

Post by rileymat2 »

paxys wrote: post #40

Over 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…

Does banning non competes help if you don't already have businesses attracted to an area in some critical mass?

I can see how it could make for a vibrant scene if you already have incumbents, but if you are an area trying to attract them, I am not sure that works.

Re: Laws barring noncompete clauses spreading

#99

Post by whimsicalism »

yamtaddle wrote: post #44
whimsicalism wrote: post #24

Earlier quoted context omitted.

This also happens in the US, it just isn't reported on heavily by the media. When the dining workers at my university in the US were campaigning for a contract, teamsters blocked most truck deliveries to the university

Labor action generally is barely reported on in the US. You have to go to far-left media like Democracy Now to hear about most of it. People who don't seek that out could be forgiven for thinking unions in the US almost never do anything at all.

It's worth noting also that this sort of "secondary strike" approach is explicitly illegal in the United States.

Re: Laws barring noncompete clauses spreading

#100

Post by debesyla »

drogus wrote: post #57
Natsu wrote: post #3

IMHO, 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.

This is how it works in Germany and in some other EU countries. Companies need to pay 50% of an average of 3 last months salary in order to enforce a non-compete clause.

Yeah, same in Lithuania.
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