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Laws barring noncompete clauses spreading

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Re: Laws barring noncompete clauses spreading

#121

Post by nraynaud »

jasonwatkinspdx wrote: post #20
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.

Believe it or not they're now being used for fast food employees.

What is a bit hilarious is the idea that the new guy will change any procedure at his new place because of his experience somewhere else. “Thank you, but it’s the franchise HQ who makes the rules, not the rank and file”

Re: Laws barring noncompete clauses spreading

#122

Post by lazide »

PeterisP wrote: post #117
lazide wrote: post #104

Earlier quoted context omitted.

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…

Yeah no.

From your link ‘9) “Trade secret” means information, including a formula, pattern, compilation, program, device, method, technique, or process, that:

(A) Derives independent economic value, actual or potential, from not being generally known to the public or to other persons who can obtain economic value from its disclosure or use; and

(B) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.’

Pretty hard to imagine a customer list meeting any of those criteria.

Re: Laws barring noncompete clauses spreading

#123

Post by lazide »

jahewson wrote: post #116
lazide wrote: post #104

Earlier quoted context omitted.

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.

No, I didn’t miss it. You’re moving the goalposts.

That something is a civil tort doesn’t mean it’s a criminal offense (what is generally referred to as ‘illegal’). Trade secret theft is illegal.

But trade secrets have a specific definition which can pretty much never plausibly include a list of customers.

Re: Laws barring noncompete clauses spreading

#124

Post by diob »

lazide wrote: post #95
diob wrote: post #81

Earlier quoted context omitted.

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 b…

Yeah, I'd say that's different, not sure how the anecdote applies whatsoever.

Re: Laws barring noncompete clauses spreading

#125

Post by biomcgary »

NegativeK wrote: post #110
cma wrote: post #107

Earlier quoted context omitted.

Why even allow this? Just makes things less competitive and pays people to be unproductive.

No business would do this; non-competes would be de facto banned. It's not a sincere suggestion.

I think rare situations can exist where a company would reasonably conclude that paying the employee not to compete is worth a lot more to the company than their salary. However, they should pay for it, not the employee (or the market, for that matter).

I think open source, the internet, and Stable Diffusion have shown that the diffusion of knowledge is generally in the public interest. I really think judges made a serious mistake when they stopped treating non-compete clauses as unlawful prior restraints on trade. They are not remotely in the public interest.

Re: Laws barring noncompete clauses spreading

#126

Post by singleshot_ »

Cupertino95014 wrote: post #119
harry8 wrote: post #105

Earlier quoted context omitted.

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, an…

I have heard of such cases.

The situation regarding the difficult recipe could be handled under the Uniform Trade Secret Act, as adopted in various states, or under common law related to tortious misappropriation of classified information.

This might be a place where restrictive covenants not to compete aren’t really relevant, and if they disappeared, employees might still have all the tools they need to protect their interests.

Re: Laws barring noncompete clauses spreading

#127

Post by bdw5204 »

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…

I'm fine with allowing non-competes as long as the company pays the ex-employee their full salary for the length of the non-compete and can't rescind the non-compete without mutual consent. For example, an 18 month non-compete would mean 18 months of paid vacation after you leave a job.

I imagine this would be functionally equivalent to a ban on non-competes because it seems like it'd be an insane waste of money but if a company wants to provide a paid vacation on the way out I see no reason to stop them. Unpaid non-competes should be illegal as somebody's right to earn a living trumps a corporation's right to impose an unconscionable contract on its employees.

Re: Laws barring noncompete clauses spreading

#128

Post by MichaelZuo »

bdw5204 wrote: post #127
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…

I'm fine with allowing non-competes as long as the company pays the ex-employee their full salary for the length of the non-compete and can't rescind the non-compete without mutual consent. For example, an 18 month non-compete would mean 18 months of paid vacation after you leave a job. I imagine this would be functionally equivalent to a ban on non-competes because it seems like it'd be an insane waste of money but…

This is a smart way to go about it.

Only a tiny portion of truly critical positions would have compensated non-competes under this system and the rest would have no such blocks.

Re: Laws barring noncompete clauses spreading

#129

Post by lazide »

diob wrote: post #124
lazide wrote: post #95

Earlier quoted context omitted.

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 b…

Yeah, I'd say that's different, not sure how the anecdote applies whatsoever.

The reason it’s relevant is because that is literally what a non compete is supposed to be for.

Re: Laws barring noncompete clauses spreading

#130

Post by divbzero »

bdw5204 wrote: post #127
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…

I'm fine with allowing non-competes as long as the company pays the ex-employee their full salary for the length of the non-compete and can't rescind the non-compete without mutual consent. For example, an 18 month non-compete would mean 18 months of paid vacation after you leave a job. I imagine this would be functionally equivalent to a ban on non-competes because it seems like it'd be an insane waste of money but…

Paying to delay competitors could be a good use of money for companies in many circumstances. That would work fine for an individual from a financial perspective, but keeping talent away from work is suboptimal for society as a whole.
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