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Laws barring noncompete clauses spreading

businessinsurance.com

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Re: Laws barring noncompete clauses spreading

#111

Post by ghaff »

harry8 wrote: post #105
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…

Beyond banning them de-jure you've also got to ban them de-facto. "We all know non-competes are unenforceable and illegal." There are no consequences for forcing someone to have the stress, expense, time and to secure the financing so that if everything works as it should (which it often doesn't in all the various legal systems) you get only some of that back. If it doesn't work as it should you're toast. Not a nice…

I worked for a very small company. We wouldn’t hire anyone with a non-compete end of story end of discussion. Just wasn’t a risk or cost management was willing to even entertain.

Re: Laws barring noncompete clauses spreading

#112

Post by ghaff »

vkou wrote: post #82
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…

> Every such scheme has generally failed because they refused to emulate the one key piece of California law that is necessary for a startup ecosystem to exist – banning noncompetes. As I look out the window of my Seattle apartment, observing a literal forest of new construction, sky-rocketing rents and costs of living, I must interpret the tech boom here as 'the next Silicon Valley failing', because Washington state…

You can argue the degree to which non-competes have contributed to Silicon Vslley success but there are a ton of companies elsewhere in the country with various degrees of non/compete enforcement that have had and have considerable success in various technology sectors. Another example is MA which historically did allow non-compete enforcement (now somewhat weakened) which spawned the whole Route 128 computer industry and more recently biotech/pharma.

Although allowed, I only once had to sign a pretty limited non-compete with an MA company. And people jumped between the various minicomputer companies all the time although tenures tended to be longer for other reasons.

Re: Laws barring noncompete clauses spreading

#113

Post by lovich »

JackFr wrote: post #93
lovich wrote: post #92

Earlier quoted context omitted.

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

Really?

Well I guess that’s what I get for giving you the benefit of the doubt

Re: Laws barring noncompete clauses spreading

#114

Post by pyuser583 »

bigmattystyles wrote: post #61
deathanatos wrote: post #18

Good 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.

I’ve heard this from attorneys. The gist is: arbitration/mediation make sure the case is settled quickly. Big corporations can afford attorneys to appeal and appeal and appeal. With arbitration that does happen.

Re: Laws barring noncompete clauses spreading

#115

Post by PeterisP »

prirun wrote: post #78
lazide wrote: post #22

Earlier quoted context omitted.

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".

Sure, and in this case as soon as the pay stops, the non-compete obligations stop as well.

Re: Laws barring noncompete clauses spreading

#116

Post by jahewson »

lazide wrote: post #104
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 surely you’ll have no issues providing a cite of the relevant criminal code?

I think you missed the “civil suit” part. Common law business torts are not found in statute.

Re: Laws barring noncompete clauses spreading

#117

Post by PeterisP »

lazide wrote: post #104
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 surely you’ll have no issues providing a cite of the relevant criminal code?

Criminal code is specific to jurisdiction, in California this would probably be the most relevant section - https://codes.findlaw.com/ca/penal-code/pen-sect-499c.html . Whether a customer list is a trade secret depends on a bunch of factors in that state's (or countries) trade secret laws (the penal code is just a fraction of them) but in general a mere list of names and telephone numbers likely will not qualify, but a list that includes their buying habits or pricing of current contracts likely will.

Re: Laws barring noncompete clauses spreading

#118

Post by lazide »

DiggyJohnson wrote: post #106
lazide wrote: post #39

Earlier quoted context omitted.

Trade secrets have a very specific definition, and a mere list of contact information that is already likely public in an unfocused way (aka contact lists) almost certainly doesn’t qualify. Neither would a list of company names, etc. That information however IS highly valuable, especially paired with knowledge of how a company is doing sales, how it is positioning itself internally strategy wise, etc. some of those t…

The idea of a client or customer list being public information is profoundly ludicrous. It’s the canonical example, as another commenter put it.

I never said it was public information. I saw it might be, in some cases, a collection of otherwise public information.

As to if it could be protected as a trade secret depends entirely on how it is stored, secured, what it contains, and who is given access to it.

But very unlikely. It has an actual definition [https://www.law.cornell.edu/wex/trade_secret]

As to if someone could sue someone else for damages related to breach of an otherwise valid contractual obligation, then of course.

As to if such a lawsuit would be successful will of course depend on a lot of factors, including if that obligation is valid under law, if anyone can show proof it occurred (and wasn’t say someone ‘using their extensive personal connections in the industry’), etc.

But that is an expensive, time consuming, and ultimately shitty time in court with few guarantees unless someone was really sloppy.

Re: Laws barring noncompete clauses spreading

#119

Post by Cupertino95014 »

harry8 wrote: post #105
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…

Beyond banning them de-jure you've also got to ban them de-facto. "We all know non-competes are unenforceable and illegal." There are no consequences for forcing someone to have the stress, expense, time and to secure the financing so that if everything works as it should (which it often doesn't in all the various legal systems) you get only some of that back. If it doesn't work as it should you're toast. Not a nice…

I've never heard of a court case involving a noncompete. Have you?

(of course, I live in California.)

It's maybe a little different if you're a chef and you've spent a lifetime mastering a particular recipe which is very hard to get right. You teach it to someone, and he goes out and opens his own restaurant selling that same dish. You can see the intuitive appeal of a noncompete, even if it's usually ineffective, and actually harmful to a high-tech ecosystem.

Re: Laws barring noncompete clauses spreading

#120

Post by gruez »

bhaney wrote: post #21
exabrial wrote: post #16

I 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.

This seems like the equivalent of a predatory loan with the interest paid in opportunity cost, and doesn't even properly address the same problem that noncompetes do.

>This seems like the equivalent of a predatory loan with the interest paid in opportunity cost

I don't see the issue. If you feel like you might bail later, you're free to keep the money in an interest bearing account so you can pay it back.

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