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

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

#221

Post by r00fus » Thu, Jan 05, 2023, 5:50 PM UTC

netheril96 wrote: post #160

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.

I disagree. The law can only mandate salaries during noncompete periods. It cannot mandate bonuses or stock grants, both of which can be significant. And as an employee, I prefer that noncompete has no effect. Even if I were paid during noncompete period, I would be outcompeted by other people who are working rather than being idle. It would set my career back.

Would you be ok if it was total compensation (averaged over a reasonable period) and not salary?

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

#222

Post by jacobr1 » Thu, Jan 05, 2023, 5:51 PM UTC

crazygringo wrote: post #191

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…

But even that has major drawbacks -- if you're not actually working, then you're not building your resume, you're not getting promotions, you're not advancing. And if you find your work meaningful and satisfying, that meaning and satisfaction is gone. Not to mention who determines how much "being paid" means, when compensation isn't just base salary but also variable things like company bonuses, individual performanc…

I would agree these are system-wide less efficient, but shouldn't paid "garden leave" be legal if parties agree upfront?

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

#223

Post by arrosenberg » Thu, Jan 05, 2023, 5:51 PM UTC

ssharp wrote: post #186

brightball wrote: post #164

Earlier quoted context omitted.

IMO the primary concern at an office like that is having access to patient data and then enticing them to go elsewhere. If the person wants to go work elsewhere, totally fine. The concern is trying to take customers or other staff with them. I know somebody that happened to. Company opened a branch office and one of the senior staff rented an office around the corner, took half the staff and patients. Stuck them with…

There are usually non-solicitation clauses as well that prevent you from actively recruiting former co-workers and clients/customers. That's different than a non-compete.

Which should also be unenforceable. Freedom of association is in the Constitution.

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

#224

Post by gnopgnip » Thu, Jan 05, 2023, 5:52 PM UTC

cataphract wrote: post #34

TSiege wrote: post #3

This is a bigger deal then the title suggests since it appears it would be retroactive and nullify existing non competes > The commission’s proposal appears to address this issue by requiring employers to withdraw existing noncompetes and to inform workers that they no longer apply. The proposal would also make it illegal for an employer to enter into a noncompete with a worker or to try to do so, or to suggest that…

> Given the hostility of the current Supreme Court to federal agencies, the pessimist in me says that this would be challenged by an employer go all the way to the supreme court and be used by them to dramatically limit the power of FTC More likely, in the short term it will be challenged in individual arbitration and we'll never hear about it.

That isn’t how it works with non competes. The old employer threatens to sue the new employer unless they fire you.

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

#225

Post by mebiles » Thu, Jan 05, 2023, 5:52 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…

yeah if you've switched sectors then you clearly did not get the "secret sauce" lol

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

#226

Post by r00fus » Thu, Jan 05, 2023, 5:53 PM UTC

manicennui wrote: post #205

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.

How did the supposed captured government agency (FTC) happen to even propose this? Is it a) FTC is not captured b) proposal that goes nowhere (ie, Lucy with the football scenario) or c) perhaps that "group politicians really care about" realize the gains may be worth the cost ?

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

#227

Post by pvarangot » Thu, Jan 05, 2023, 5:54 PM UTC

LeonM wrote: post #150

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…

> And this is about the only way they hold up in court

I think if your company gets bought and you get stock compensation of the company buying it, both as a founder or an employee, they can also make it hold in court.

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

#228

Post by dzader » Thu, Jan 05, 2023, 5:54 PM UTC

xyzelement wrote: post #208

lotsofpulp wrote: post #193

Earlier quoted context omitted.

> 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 wa…

I don't know what the role was but I'm 100% sure that's not true at all. there are 0 roles that would disappear if non competes became illegal. 0

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

#229

Post by wewtyflakes » Thu, Jan 05, 2023, 5:54 PM UTC

xyzelement wrote: post #208

lotsofpulp wrote: post #193

Earlier quoted context omitted.

> 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 wa…

The onboarding was optimal for you, having the non-compete was not optimal for you. The ideal situation would be to have that great onboarding experience while also not having a non-compete, something that companies in California do all the time.

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

#230

Post by jacobr1 » Thu, Jan 05, 2023, 5:56 PM UTC

mumblemumble wrote: post #57

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…

This is the standard I knew from the trading industry. I would say that, while it does initially seem more palatable, it also has some downsides. One that might be particularly relevant to programmers is that it sets up a structure that functions somewhat like a penalty of 1 year's worth of paid vacation for choosing a new job outside the industry. I don't have the business or economic bonafides to back this up, but…

Even in California, you can get sued for violating an NDA when going to competitor if you bring private technical data, which seems like a reasonable compromise. You can bring your expertise, but no code. Intersecting with this are patents. A company can also protect its IP with patents, but when should choose to disallow, or have more liberal patent laws? It seems there are similar tradeoff between the value to companies, competitors and public interests.