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Laws barring noncompete clauses spreading

businessinsurance.com

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Re: Laws barring noncompete clauses spreading

#211

Post by Bjartr »

lazide wrote: post #122
PeterisP wrote: post #117

Earlier quoted context omitted.

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…

A customer list can absolutely be reasonably considered to be information with actual and potential value from not being generally known to other persons (competitors) who would obtain economic value from it's disclosure.

So long as you make a reasonable effort to keep it from being public knowledge, it meets the criteria you quoted.

Re: Laws barring noncompete clauses spreading

#212

Post by omginternets »

yrgulation wrote: post #210
omginternets wrote: post #206

Earlier quoted context omitted.

Fwiw, I worked in the UK for several years and noncompetes were absolutely standard. Moreover, they appear to be enforceable.

What domain out of curiosity?

I did software consulting for a few different clients that built "smart" irrigation pumps. The work was an even split between a custom SOP/ERP/back-office system, and data-ingestion/processing pipelines. There was a fair bit of IP involved.

Re: Laws barring noncompete clauses spreading

#213

Post by bluGill »

sokoloff wrote: post #191
bluGill wrote: post #141

Earlier quoted context omitted.

The real danger is if you don't train your people and they stay. That risk is why you train everyone even those who leave. For cases of expensive training it is fair to demand they pay you back if you don't stay for a couple years. We are talking about a full masters at a major university though, not just some random 3 day design patterns class or whatever the hotness of the day is.

The clawback also needs to be contingent on the employee somehow requesting the training and initiating the end of the job. If you spend $20K on an MBA that I initiated and I quit, totally fair to have an arrangement where I have to pay some of that back. If you fire me? No obligation. If you send me to some series of certifications because you want me to have them? Also no obligation.

> If you fire me? No obligation.

Lets change fire to lay off. There is a subtle but important difference. If you fire someone it is generally for cause - that is they did something bad. You still want someone doing their job, but because of their bad behavior it can't be them. That is if someone gets a MBA, moves to a management position and starts demanding sex of their underlings, you fire them and demand they pay for the education you got.

By contrast when you lay someone off, you are saying "you were good at your job, but we don't need someone doing your job anymore" (or maybe we can't afford to pay someone to do the job). You lost your job, but there wasn't anything you could have done different if you wanted to stay.

Re: Laws barring noncompete clauses spreading

#214

Post by sokoloff »

bluGill wrote: post #213
sokoloff wrote: post #191

Earlier quoted context omitted.

The clawback also needs to be contingent on the employee somehow requesting the training and initiating the end of the job. If you spend $20K on an MBA that I initiated and I quit, totally fair to have an arrangement where I have to pay some of that back. If you fire me? No obligation. If you send me to some series of certifications because you want me to have them? Also no obligation.

> If you fire me? No obligation. Lets change fire to lay off. There is a subtle but important difference. If you fire someone it is generally for cause - that is they did something bad. You still want someone doing their job, but because of their bad behavior it can't be them. That is if someone gets a MBA, moves to a management position and starts demanding sex of their underlings, you fire them and demand they pay…

People mostly get fired for not doing or for sucking at their job rather than for sexual harassment. For a termination "for cause", I don't care much either way whether the training is reimbursable to the company. For termination for poor performance (still a "firing"), I think training should not be reimbursable.

Re: Laws barring noncompete clauses spreading

#215

Post by cafard »

ghaff wrote: post #154
m463 wrote: post #139

Earlier quoted context omitted.

wonder how that is solved in practice? (also wondering about the armed services and paying for medical school)

The armed forces are probably not the best example. There tend to be pretty severe consequences to just deciding you don’t want to be in the Army any longer.

What is the usual term of an enlistment?

Re: Laws barring noncompete clauses spreading

#216

Post by ghaff »

cafard wrote: post #215
ghaff wrote: post #154

Earlier quoted context omitted.

The armed forces are probably not the best example. There tend to be pretty severe consequences to just deciding you don’t want to be in the Army any longer.

What is the usual term of an enlistment?

I believe 4 years active duty and 4 years in reserves.

Re: Laws barring noncompete clauses spreading

#217

Post by SuperQue »

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 functionally how it works in Germany. Usually reserved for C-level types.

It's also done because it not allowed to have anti-poaching clauses IIRC.

Re: Laws barring noncompete clauses spreading

#218

Post by SuperQue »

makestuff wrote: post #145
bdw5204 wrote: post #127

Earlier quoted context omitted.

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…

Yeah that is pretty common in the hedge fund/trading world. They call it garden leave and you get your base salary for usually 6-18 months. The downside to that is you only get your base salary which is usually a fraction of the expected bonus.

> garden leave

It's called the same thing in Germany. The term also applies to when you quit, but the employer wants to cut your access to the company ahead of your contract termination date. It's typical to have 1-3 months of "notice period" in Germany.

Re: Laws barring noncompete clauses spreading

#219

Post by TheCoelacanth »

bluGill wrote: post #213
sokoloff wrote: post #191

Earlier quoted context omitted.

The clawback also needs to be contingent on the employee somehow requesting the training and initiating the end of the job. If you spend $20K on an MBA that I initiated and I quit, totally fair to have an arrangement where I have to pay some of that back. If you fire me? No obligation. If you send me to some series of certifications because you want me to have them? Also no obligation.

> If you fire me? No obligation. Lets change fire to lay off. There is a subtle but important difference. If you fire someone it is generally for cause - that is they did something bad. You still want someone doing their job, but because of their bad behavior it can't be them. That is if someone gets a MBA, moves to a management position and starts demanding sex of their underlings, you fire them and demand they pay…

Firing for gross misconduct is a reasonable exception, but not all firings in general.

Re: Laws barring noncompete clauses spreading

#220

Post by ryandrake »

sokoloff wrote: post #192
origin_path wrote: post #184

Earlier quoted context omitted.

The investment into training isn't merely money and can't usually be neatly calculated. It's usually paid in the form of time, motivation, distraction and lost opportunities by more senior staff. If you, personally, sink a year into training someone intensively, and then they leave, would you perceive it as merely lost opportunity costs? Probably not. Mentors and mentees are supposed to have a more than purely transa…

> why not just pay the higher wages to start with and skip the risky and slow training? It’s not like walking around with sacks of money and hiring people interested in that money is low-risk. I’ve found training to be lower risk/uncertainty than hiring in terms of fewer outright failures and negative surprises.

Yet, companies just love to hire instead of retain. Take an employee who just got trained/experience and is now worth $N, who is currently making $N-2. Most companies I've worked with would piss and moan about giving that employee a raise to $N-1. They'd rather let him leave. Then, they suddenly have no problem hiring a relatively unknown employee and paying him $N+2. It's never made sense to me in all my decades in this business. Obviously value-destroying behavior that's routinely done by most companies.
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