U.S. moves to bar noncompete agreements in labor contracts • Hacker News Board

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

#201

Post by ipaddr » Thu, Jan 05, 2023, 5:32 PM UTC

AlexandrB wrote: post #130

Alex3917 wrote: post #61

Earlier quoted context omitted.

> 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…

This example seems extra crazy. The only entities it protects are large companies. The biggest threat to a local bakery is not their employee leaving and starting their own bakery, but a large bakery chain coming in and undercutting their prices. No non-compete will help with that. Meanwhile, the large bakery chain does benefit from being able to stop you from baking for someone else if you leave their employ. At a m…

It could increase wages as labor/labour would have one less worker in the pool increasing the demand and wages.

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

#202

Post by asah » Thu, Jan 05, 2023, 5:33 PM UTC

This is a huge deal for improving US competitiveness worldwide, can't wait for the comments period to open.

This is won't affect early stage startups much: startups have limited negotiating power and non-competes are a tag: it's such a bad look, entrepreneurs are quickly pulled aside by advisors, lawyers, etc.

This might affect California, which used them (their ban) to compete with other states. It's a soft thing along with sunshine, funding (easier, faster, better terms) and the talent pool (larger, better connected).

I've been affected by non-competes all my career and it was part of my decision to move from New York to California - the software industry was simply too volatile to attach yourself to one employer. As I graduated, I had companies recruiting me, it was impossible to pick. Decades years later, I have enough power (and savvy) to cross-out NCAs from contracts along with overly prescriptive SOWs, toothless financial promises, etc. But kids, if you're reading this, the negotiation never ends if you want to get paid and earn a living.

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

#203

Post by not_the_fda » Thu, Jan 05, 2023, 5:34 PM UTC

dmlerner wrote: post #184

not_the_fda wrote: post #166

Earlier quoted context omitted.

Often times you are not informed about non-compete until your first day of work unless you know to explicitly ask about it. They have you over the barrel at that point. I once took a job at a design service company. Asked about any non-competes and invention stuff. Said there wasn't any verbally. I get there and they have this draconian non-compete that you can't work for any other design services, start your own des…

How are you not informed in advance? Every job I've had, there's a contract I sign in advance with all terms, and no addendum on day one. I'd think you could refuse to sign an addendum, and even sue for promissory estoppel if they fire you for not signing.

Depends on state law. In "at will" to work states they can terminate you for anything.

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

#204

Post by [deleted] » Thu, Jan 05, 2023, 5:35 PM UTC

asah wrote: post #202

This is a huge deal for improving US competitiveness worldwide, can't wait for the comments period to open. This is won't affect early stage startups much: startups have limited negotiating power and non-competes are a tag: it's such a bad look, entrepreneurs are quickly pulled aside by advisors, lawyers, etc. This might affect California, which used them (their ban) to compete with other states. It's a soft thing al…

[deleted]

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

#205

Post by manicennui » Thu, Jan 05, 2023, 5:36 PM UTC

Robotbeat wrote: post #122

Banning noncompetes would be an awesome policy for economic growth and dynamism. It’s pro-freedom in the useful sense of the word. It’s also incredibly pro-worker. Sometimes you get a win-win-win idea.

Unfortunately the "loser" in this situation is the only group that politicians really care about.

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

#206

Post by whimsicalism » Thu, Jan 05, 2023, 5:36 PM UTC

bpodgursky wrote: post #7

I agree that noncompetes are bad, but the FTC declaring it without a congressional mandate seems deeply questionable.

The FTC does have a congressional mandate for administrative discretion.

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

#207

Post by ThrowawayIP » Thu, Jan 05, 2023, 5:37 PM UTC

xyzelement wrote: post #180

Non competes are often necessary in the most interesting jobs. A few years ago I took a job at a hedge fund with a 2 year noncompete. I took a calculated risk doing so. In the 2 years I worked in the fund, I learned a tremendous amount thanks to being exposed to the "secret sauce" which would have been really damaging for me to take to a competitor. After I left the fund, I took the 2 year non-compete (ie: don't work…

Non-Competes are absolutely sprung on employees and I am an example of that. The company I worked for was acquired and the 2 year non-competes were high-pressure "Sign it or you're fired" conversations. So I sit at the same desk, doing the same work, for the same compensation and can now not take another job with anyone doing work in my field.

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

#208

Post by xyzelement » Thu, Jan 05, 2023, 5:37 PM UTC

lotsofpulp wrote: post #193

xyzelement wrote: post #180

Non competes are often necessary in the most interesting jobs. A few years ago I took a job at a hedge fund with a 2 year noncompete. I took a calculated risk doing so. In the 2 years I worked in the fund, I learned a tremendous amount thanks to being exposed to the "secret sauce" which would have been really damaging for me to take to a competitor. After I left the fund, I took the 2 year non-compete (ie: don't work…

> I am not sure how this kind of role would work in a world of no non-competes but I suspect it would be suboptimal for everyone. In your example, non competes seem to be optimal for the hedge fund investors, but I fail to see how it was optimal for everyone. California has been pumping out quite a stream of “interesting jobs” and interesting businesses in a world of no non competes.

//but I fail to see how it was optimal for everyone.

It was also optimal for me as the employee because the fund could (a) hire me and (b) structure my role in a way that I could quickly learn and make impact which (c) enabled me to earn what I want.

Without the non-compete, the role/hire would not have been possible and would have to be structured in some less optimal way.

Like I said, if I didn't think this role was even w the non compete I'd have done something else.

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

#209

Post by jeremydeanlakey » Thu, Jan 05, 2023, 5:37 PM UTC

xyzelement wrote: post #180

Non competes are often necessary in the most interesting jobs. A few years ago I took a job at a hedge fund with a 2 year noncompete. I took a calculated risk doing so. In the 2 years I worked in the fund, I learned a tremendous amount thanks to being exposed to the "secret sauce" which would have been really damaging for me to take to a competitor. After I left the fund, I took the 2 year non-compete (ie: don't work…

> The bottom line is, a non compete is not something that springs on you.

It's pretty standard now for employers to spring on you a previously-unmentioned non-compete clause at the time that you're onboarding. I've learned to ask for it before accepting an offer but I don't think most employees know to do that.

I'm a capitalist and I think non-competes have a very valid purpose in a limited set of circumstances. But the ubiquitous use right now is to make it harder for employees to leave.

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

#210

Post by yardie » Thu, Jan 05, 2023, 5:39 PM UTC

1vuio0pswjnm7 wrote: post #189

0xAFFFF wrote: post #137

Earlier quoted context omitted.

In France a non-compete clause must be attached to financial compensation or it is considered void.

Imagine that the employer does not have a non-compete in place with her current employees. In the US, she may offer a single, token amount in exchange for signing an agreement containing a non-compete clause. This could, for example, be described by the employer as a "bonus". It does not have to be reasonably-based on the amounts the employee might gain from working for a competitor. It could be much lower. The emplo…

You can always turn it down. Contracts have whats called consideration.

I've seen companies try to get away with NCA/NDA by tying severance to signing one. I would have to be truly desperate to take the money over the health of my career, yet that is exactly what a lot of companies rely on.