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

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

#291

Post by curiousllama » Thu, Jan 05, 2023, 6:58 PM UTC

snowwrestler wrote: post #267

gen220 wrote: post #253

I think we're all pretty familiar with the arguments against non-competes. Does anybody have a compelling argument for them, as practiced in 2023 in the US? While we're at it, does anybody have a compelling justification for allowing non-poach agreements, too? From my perspective, they both seem like a non-durable benefit to $current_employer at the expense of a compounding opportunity cost to the greater economy (in…

The argument is basically that trade secrets violations are incredibly hard to detect and pursue. You can’t see inside a person’s brain, and (short of industrial espionage) you can’t see inside a competitor either. So a person could come work for you, gain some knowledge of your trade secrets, and then go get a huge offer from a competitor based on that knowledge. In contrast, it is extremely easy to detect a person’…

This is a solid summary. Another, related argument I've heard is that it incentivizes R&D + upskilling. Much of the value is "we now have people who can do X", not X itself. Without noncompetes, it's a better strategy to try to poach your competitor's R&D employees, rather than invest in your own, which very quickly leads to less research + upskilling.

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

#292

Post by Nomentatus » Thu, Jan 05, 2023, 6:59 PM UTC

seneca wrote: post #96

simplotek wrote: post #85

Earlier quoted context omitted.

> 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…

Your reply is nonsense much more than the one you're replying to. Voluntarily entering a contract with bad terms has a lot less in common with feudalism than heavy handed government does. It's fine that you prefer the authoritarian government, but it doesn't change what feudalism was.

FWIW, and not meant as a contradiction: while (talking Britain here particularly) many were still literally slaves under Feudalism (not serfs) and others Villiens (serfs tied to a property - the root of the once-classist word villain); there were also a great many free people taking contracts under bad terms, if only because it's easy for Lords to collude re wages for servants, etc, etc.

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

#293

Post by 1vuio0pswjnm7 » Thu, Jan 05, 2023, 7:01 PM UTC

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 are unnecessary and also don't hinder technological development."

If there were another US state where noncompete agreements were "essentially legal" whose economy "worked" what would that show.

Are there any other factors one should consider that affect whether a state's economy "works".

Is it possible to work for a competitor of one's former employer without violating the former employer's intellectual property rights.

(NB. I am in favour of regulating non-competes.)

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

#294

Post by govg » Thu, Jan 05, 2023, 7:02 PM UTC

berniedurfee wrote: post #265

eclipsetheworld wrote: post #27

In Germany we have non-competes, however, the employer has to continue paying the ex-employee (a part of) their salary for the non-compete to have any effect.

Sadly, this concept somehow feels very much counter to American culture. I don’t think this would ever be implemented here.

It is implemented in certain areas. For example, "gardening leave" is the term used for similar situations in finance.

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

#295

Post by QuercusMax » Thu, Jan 05, 2023, 7:02 PM UTC

flakiness wrote: post #286

QuercusMax wrote: post #270

Earlier quoted context omitted.

Only thing that comes to mind is a scenario where a sales person goes to another company and takes all their sales leads with them. This happened at a previous employer, at which time they instituted noncompetes for all the salespeople and most of the engineering force. They forgot to have me and several other very senior engineers sign the noncompete, which was extremely hilarious to me when I went to another compan…

Any stories after that conversation?

Not really. My new job was in CA which doesn't honor noncompetes, so they really didn't have a leg to stand on. Mostly just funny.

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

#296

Post by p_j_w » Thu, Jan 05, 2023, 7:03 PM UTC

mnehring wrote: post #290

gen220 wrote: post #253

I think we're all pretty familiar with the arguments against non-competes. Does anybody have a compelling argument for them, as practiced in 2023 in the US? While we're at it, does anybody have a compelling justification for allowing non-poach agreements, too? From my perspective, they both seem like a non-durable benefit to $current_employer at the expense of a compounding opportunity cost to the greater economy (in…

So, here are a couple of arguments for: 1. I have a relative who is an MD. He was recruited cross-country at great expense. (Average cost to recruit an MD can be about $250K). So, if his comp was $200K/year and it cost $250K to recruit, a neighboring practice could monitor for new incoming docs, and make an offer of $220K/year in salary to the newly hired doc. If that happened, it would be in the best interest of the…

> In the case of the MD relative, he was fired, essentially without cause, and his non-compete forced him to be unemployed for a year before he was finally able to convince the former employer to waive the non-compete.

It seems like an easy and obvious solution that the non-compete is automatically null and void if the employee is let go for any reason.

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

#297

Post by neycoda » Thu, Jan 05, 2023, 7:04 PM UTC

Wow, that's a big deal. While NCCs I've signed have generally looked fair, I've seen a few lives destroyed by them. When somebody has expertise in a career in a certain field, and leaves a company, they shouldn't be punished for continuing on with their expertise in another company, even their own. This is called competition. It shouldn't be stifled. Stealing trade secrets is one thing, but competing in a field should be regulated by companies that don't wanna compete.

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

#298

Post by dragonwriter » Thu, Jan 05, 2023, 7:05 PM UTC

aidenn0 wrote: post #287

Eumenes wrote: post #188

Earlier quoted context omitted.

Why are they suddenly making this decision in 2023? Seems like something congress should change.

Congress is rapidly becoming a failed institution. They have gradually outsourced their duties to various administrative authorities (such as the FTC) to the point that the only thing they must do to keep the US running is pass the annual budget and raise the debt ceiling. I think any time an administrative authority or, even better, the courts do something that a legislator wants done, they breathe a sigh of relief…

> congress spent nearly zero time passing any pro-choice laws.

What pro-choice federal law do you imagine would have substantive effect in the face of what would be (and was) necessary for Roe to fall:!a Supreme Court that is (1) so dismissive of well-established precedent as to strike down the cases establishing abortion as a 14th Amendment right (thereby both removing the independent bar to state anti-abortion law and removing the enforcement clause of the 14th Amendment as a basis for federal law), (2) from a faction also opposed to expansive readings of the Commerce Clause (thus rendering abortion protection grounded in the Commerce Clause unviable).

This isn’t like same-sex marriage where Congress has a separate, less factionally controversial in bounds, Constitutional grant of power (in the Full Faith and Credit clause) to act under.

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

#299

Post by rajeshp1986 » Thu, Jan 05, 2023, 7:05 PM UTC

Does anyone know if this would retro-actively applied to employees who signed the non-compete contracts?

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

#300

Post by wpietri » Thu, Jan 05, 2023, 7:05 PM UTC

mnehring wrote: post #290

gen220 wrote: post #253

I think we're all pretty familiar with the arguments against non-competes. Does anybody have a compelling argument for them, as practiced in 2023 in the US? While we're at it, does anybody have a compelling justification for allowing non-poach agreements, too? From my perspective, they both seem like a non-durable benefit to $current_employer at the expense of a compounding opportunity cost to the greater economy (in…

So, here are a couple of arguments for: 1. I have a relative who is an MD. He was recruited cross-country at great expense. (Average cost to recruit an MD can be about $250K). So, if his comp was $200K/year and it cost $250K to recruit, a neighboring practice could monitor for new incoming docs, and make an offer of $220K/year in salary to the newly hired doc. If that happened, it would be in the best interest of the…

I think those are all reasons a company might want it. But asking the government to force people to not work requires reasons why it's good for society, not just the company.

In the first case, you're talking about a company that wants to pay below-market salaries. Why should that be the employee's problem?

In the second, there's a case for carrots to make the acquired team stay, like the stock options you mention. But from a societal perspective, why should the company be able to use the courts as a stick if the carrots turn out to be insufficient?

In the third, I again get why companies want to treat employees like property. But I don't see any societal argument for that other than "rich company wants things".