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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

#241

Post by gdcbe »

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…

If they pay me close to my salary for doing nothing I’m all in. I can always side hustle something completely different on the side or just take the money and focus more on my kids. Please do enforce the agreement :D

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

#242

Post by fendy3002 »

jacobr1 wrote: post #222
crazygringo wrote: post #191

Earlier quoted context omitted.

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?

Well if all companies are doing it, employees will have no option other than to agree. This is the current case with non compete afaik.

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

#243

Post by lucasgonze »

kmod wrote: post #169

I mostly think this is a good thing, but there are some fields where I feel like employers will have to take other precautions that are not as nice. Most of us here are in tech where "ideas are cheap" is mostly true and commonly thought, but there are other fields (in particular, finance) where single ideas can easily be worth millions of dollars. (Imagine something like "the stock market goes down on Friday the 13th…

I doubt employers just won't hire. That would be self defeating. They'll look to protect their trade secrets in other ways, mainly through aggressive enforcement of non-disclosure agreements.

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

#244

Post by [deleted] »

arrosenberg wrote: post #223
ssharp wrote: post #186

Earlier quoted context omitted.

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.

[deleted]

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

#245

Post by twobitshifter »

thwayunion wrote: post #139

IMO the link should be changed to the FTC's press release, which has no paywall and provides a better summary: https://www.ftc.gov/news-events/news/press-releases/2023/01/... You can read the proposed rule and the full notice and factsheet here: https://www.ftc.gov/legal-library/browse/federal-register-no... Of note, an FTC commissioner (Trump appointee, so a minority voice in the executive atm) released a dissenting…

>The proposed rule would generally not apply to other types of employment restrictions, like non-disclosure agreements. However, other types of employment restrictions could be subject to the rule if they are so broad in scope that they function as noncompetes.

Do we think it would apply to non-solicitation clauses?

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

#246

Post by sebzim4500 »

cbb330 wrote: post #125

Government intervention is heavy handed and will cause unintended side affects with 100% certainty. What should happen is for: 1) employees to choose to not join companies with contracts that they don't agree with 2) employers offer better incentive to not leave for roles at risk to poaching e.g. RSUs. A natural market response to bad company policy is always preferred to government mandates.

Why is what you are describing preferable to the government outright banning them? California has effectively banned non-competes for years and their economy seems to have survived the ordeal.

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

#247

Post by aliher1911 »

blueprint wrote: post #216
weakfortress wrote: post #149

Earlier quoted context omitted.

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'r…

you're not automatically entitled to use or benefit from the IP developed by others and then disclosed to you just because you signed a paper that promises to pay you for work. maybe it makes more sense where your opponent is a horrible but huge company like facebook but this move can kill development of sensitive or novel tech by underfunded entrepreneurs. it is a mistake for the USA. maybe you guys should downvote…

I think you are confusing non-compete and NDA, IP rights, non solicitation agreements and the like. You can go work for competitor, but it doesn't allow you to use any of your previous employer's IP, poach colleagues, clients etc. Doesn't prevent you from using your expertise and come up with novel things. And some big companies do care that you don't do it, because they don't want to go into litigations because layers like to target fat cats.

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

#248

Post by [deleted] »

CJefferson wrote: post #236
r00fus wrote: post #221

Earlier quoted context omitted.

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

The problem there is people often leave one job for a job which might pay 2x, 5x, or even more. How about if you get another job offer, your original employer has to either "buy you out" of the new job offer, or you allowed to take it?

[deleted]

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

#249

Post by kevstev »

legitster wrote: post #157

My understanding is that most non-competes in the US are not enforceable in the first place. So while I think there are situations where non-competes are valid, I think it would be pretty safe to make a rule that says, "if you are not prepared to actually take an employee to court to enforce non-compete, you should be willing to go to court to defend it."

The problem is that the threat of litigation is enough to make them essentially enforced. Sure you could go to a lawyer that says this isn't worth the paper its printed on, but either you, or maybe your employer, is now going to have to fight this out in court.

This is not theoretical. A few years back, my wife, who is in ad sales, had very deep relationships with certain companies. These people had become her friends, we vacationed with them. She took a job at AOL, which at the time held many properties like Engadget, Joystiq- there was a whole host of sites that no one had realized on the surface were owned by them, but they had a decent sized media empire at the time. She had to sign a non-compete saying that she couldn't call on anyone she called on at AOL for a period of 2 years. She joins, and smashes her goal. However, about 3 months in, there was a re-org, she was let go, probably for making too much, and got some paltry severance.

She asked to be released from the non-compete. They said no. We lawyered up. He said straight out that he had represented AOL employees before, and they fight these things tooth and nail. He said we would probably win, but it would cost tens of thousands of dollars, and be a cloud over our head for at least the next year or two. He was just being brutally honest with us. We ended up not going that route.

It took her several years to recover. She had to take some jobs at kind of shitty companies because no one wanted to touch her with a non-compete like that, and most of her value was in the relationships she brought to the table. AOL essentially got a book of new business for the cost of a few months salary and commission. Its absurd.

My last company also tried to put an onerous non-compete on me- they only wanted to pay me my base salary which was a fraction of my total comp. They wouldn't even define who their competitors were. I fought against it hard. I was then labeled "difficult" by HR and what had been a bit of a rocket ship of a ride up there all of a sudden came to a stop- I stayed for another 2 years there, but it became clear there was a glass ceiling above me.

Non-competes in any form need to go away. This is restraining the US economy from achieving its potential by reducing labor mobility.

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

#250

Post by wizzwizz4 »

r00fus wrote: post #226
manicennui wrote: post #205

Earlier quoted context omitted.

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 ?

d) The FTC is not a monolith: it's a large group composed of a great many people, who have varying levels of loyalty to the organisation's purported raison d'être.
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