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U.S. moves to bar noncompete agreements in labor contracts

nytimes.com

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Re: U.S. moves to bar noncompete agreements in labor contracts

#141

Post by kelnos »

Alex3917 wrote: post #61
ecshafer wrote: post #21

Non-Competes being legal is only acceptable I think if the worker will continued being paid for the period of the non-compete. I can see reasons that non-competes exist, but those reasons don't really make sense in a world where patents and trademarks also exist. The fact that they are essentially illegal in California, and California's economy works shows that they are unnecessary and also don't hinder technological…

> The fact that they are essentially illegal in California, and California's economy works shows that they are unnecessary and also don't hinder technological development. The general rules that most states use for deciding when non-competes are enforceable aren't that bad. E.g. if you work at a bakery, you're not going to be allowed to open your own bakery two blocks away within a year, but it's fine if you do it a…

What? No, that bakery example is completely crazy.

Re: U.S. moves to bar noncompete agreements in labor contracts

#142

Post by richbell »

endisneigh wrote: post #95

I disagree with banning noncompetes. The issue IMO isn't noncompetes, it's the fact that an employer doesn't have to pay. The rule should be that they can make you not compete, but you must be compensated monthly at your salary level prior to departure. A non compete without having to pay is having your cake and eating it to so to speak.

> The rule should be that they can make you not compete, but you must be compensated monthly at your salary level prior to departure.

> A non compete without having to pay is having your cake and eating it to so to speak.

Agreed. Noncompetes and NDAs have become standard boilerplate in job contracts despite being inappropriate in the vast majority of cases. In my opinion, it's an intimidation used by employers against employees: "we don't actually enforce this, unless you do things like leave us a negative review on GlassDoor".

Despite being unenforceable where I live, I know several people who have been threatened by their ex-employers. Even if such legal action is frivolous, most people don't have the time or money to spare fight it off, and employers know this. This relates back to the bargening inequality mentioned in another thread.

Re: U.S. moves to bar noncompete agreements in labor contracts

#143

Post by AlexandrB »

donatj wrote: post #50
simplotek wrote: post #6

Noncompete clauses for workers is the most anti-american, anti-free-market policy anyone could pull. If workers aren't free to switch to better jobs and at the same time are left to fend off for themselves them the economic system starts to resemble feudalism.

> anti-free-market policy I go back and forth on that. It seems like the free market ideal would be to allow them and if people didn't like them they wouldn't sign them. No one telling anyone what to do. It certainly hasn't panned out that way though.

> It seems like the free market ideal would be to allow them and if people didn't like them they wouldn't sign them.

This only works with a robust social safety net where a worker can have no job and still be ok. Otherwise you're usually going to be choosing the lesser of several evils when it comes to employment contracts.

Re: U.S. moves to bar noncompete agreements in labor contracts

#144

Post by Moissanite »

simplotek wrote: post #109
benrbray wrote: post #72

Earlier quoted context omitted.

They should be legal, but expensive. If it is so valuable to companies that their workers not leave to work for competitors, they should be required to pay 100% salary for the non-compete period.

> they should be required to pay 100% salary for the non-compete period. I'd argue that falls way short of being useful and still screws over employees. People switch jobs because they get better offers, and being forced to not only forego better offers but also get stuck with the same income while your offers get taken away from you hardly seems something that's in the worker's interests. In fact, it looks an awful…

How about:

If you get a written offer from company B while working for company A under a non-compete, A must either:

- Allow you to leave unopposed

- Keep you in your current role by negotiating a more attractive offer

- Pay the value of offer B to put you on gardening leave for the non-compete period or 12 months, whichever is longer, and also compensate B for their recruitment costs

Would never happen, but it would be amusing to watch CEOs pitch a fit about it on Twitter.

Re: U.S. moves to bar noncompete agreements in labor contracts

#145

Post by bumby »

ericmay wrote: post #135
bumby wrote: post #127

Earlier quoted context omitted.

Workers have mechanisms to balance that power. E.g., forming a union, which could ensure the contract is more fair. I don't know what to make of the fact that they don't use them. In your opinion, is there a reason why something like a union couldn't be used to negate or modify non-compete clauses?

You are right, they do. But in practice it doesn't materialize. The other problem with "just create a union" besides the risk involved and inequality of bargaining power in starting a union in the first place is that you typically create a bureaucratic institution which has its own drag on economic efficiency. Banning non-competes has no clear downside, but does have clear upside. It makes sense to allow workers to f…

Those are all good points. I would probably push back on the idea that economic efficiency is treated as an end to itself, rather than a means to an end. There's a tipping point where increased economic efficiency isn't necessarily a net good for society overall.

I think part of me just laments the fact that previous generations took a much bigger risk to form unions and modern generations have largely let it fall to the wayside.

Re: U.S. moves to bar noncompete agreements in labor contracts

#147

Post by giantg2 »

simplotek wrote: post #85
giantg2 wrote: post #60

Earlier quoted context omitted.

There are many things that still resemble feudalism. Per capita tax, property tax, conservation easements on deeds, zoning, etc. I'm not saying these things are necessarily good or bad. Just saying that most laws around income, taxes, and land have their roots in feudalism. And of course the ruling class still make themselves well to do off of the hard work of their subjects, just not to the same degree as kings. And…

> There are many things that still resemble feudalism. Per capita tax, property tax, conservation easements on deeds, zoning, etc. Nonsense. Contributing back to society doesn't even register as a concern when your employer can force you to not have any alternative to work for him under his term, and apply harsh penalties to you and your loved ones if you step out of line. These nonsensical anarchist tropes only come…

You're doing a lot of personal attacking and not much explaining.

How is what I said "nonsense"? Do you not see that if the government decides to zone your land as conservation so you can't build on it that is one sided? Or if they use eminent domain. Even if it's in the best interest of society it's certainly one sided for the affected individual. And if they decide not to comply, you can bet the punishments will be much harsher than a non-compete.

You see, in this example society and company can be largely interchangeable - a group of people imposing something on an individual. Yeah, sure, most of the time society is acting in everyone's best interest. However, you have to remember that isn't always the case, such as with salvery or segregation. There are still injustices today.

If you reread my original comment, I never said those activities were good or bad, merely that many of our laws have their historic roots in feudalism. In many cases, those activies can be applied to either good or bad ends. There are examples of eminent domain being abused, and others which have provided benefits to society and generously compensated the owners. The important tie in to feudalism is that in either case the government is the one who owns the land while the "owner" holds the title of deed. You can hold the land as long as you abide by the rule of the government. Violate that rule (not paying taxes, use it for committing criminal activity, violate zoning) and they can take that land back, fine you, imprison you, etc.

Re: U.S. moves to bar noncompete agreements in labor contracts

#148

Post by [deleted] »

ajsnigrutin wrote: post #19

I understand noncompetes in some fields... but this can be solved in other ways. In my country (slovenia), a noncopete is valid only if you're being financially compensated by some amount while the noncompete lasts. It's a bit complicated here, but ideally companies wanting noncompetes could be forced to pay the difference between what the worker would've earned if they stayed (+ some safety factor for a potential ra…

[deleted]

Re: U.S. moves to bar noncompete agreements in labor contracts

#149

Post by weakfortress »

ajsnigrutin wrote: post #19

I understand noncompetes in some fields... but this can be solved in other ways. In my country (slovenia), a noncopete is valid only if you're being financially compensated by some amount while the noncompete lasts. It's a bit complicated here, but ideally companies wanting noncompetes could be forced to pay the difference between what the worker would've earned if they stayed (+ some safety factor for a potential ra…

I don't understand them in any field. I was forced into signing one for tech that blocks me from working from any competitor for up to 2 years. Depending on how loosely you define competitors that could mean I can't work in tech for 2 years after this job. Unfortunately for me I can't afford a lawyer. Fortunately for me non-competes of this level are generally unenforceable.

You have NDAs already. It's not like you're working for Lockheed with secret stealth aircraft knowledge where a non-compete might be a national security protection. It's a representation of the inequality of bargaining power. If I didn't take the job I would've been out another job for possibly months to reach my payscale (Staff). They are a representation of the scourge of the neo-liberal variety of capitalism. It's not true capitalism, it's actually neo-feudalism, and it's not the only symptom of it.

You will never get anyone in power to agree to make non-competes force payment of a stipend while you're under one. The powers that be have paid off congress. The fact the FTC even wants to look into this after decades of this abuse just demonstrates that fact further.

Re: U.S. moves to bar noncompete agreements in labor contracts

#150

Post by LeonM »

ajsnigrutin wrote: post #19

I understand noncompetes in some fields... but this can be solved in other ways. In my country (slovenia), a noncopete is valid only if you're being financially compensated by some amount while the noncompete lasts. It's a bit complicated here, but ideally companies wanting noncompetes could be forced to pay the difference between what the worker would've earned if they stayed (+ some safety factor for a potential ra…

> a noncopete is valid only if you're being financially compensated by some amount while the noncompete lasts.

And this is about the only way they hold up in court, otherwise the non-compete would be a one-sided contract.

IANAL, but I was once sued by a former employer over a non-compete (an entry level IT job). The judge basically swept the floor with it.

Also, it made me understand why severance packages exist, it is usually a salary compensation for the non-compete duration. Now when you hear outrage over some bank exec getting a million dollar severance, know that this can be because of a non-compete.

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