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

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

#311

Post by ErikVandeWater » Thu, Jan 05, 2023, 7:11 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…

Highly motivated/skilled people will probably do valuable things with their time off that is not measured well by GDP.

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

#312

Post by wpietri » Thu, Jan 05, 2023, 7:12 PM UTC

1vuio0pswjnm7 wrote: post #274

yardie wrote: post #210

Earlier quoted context omitted.

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.

In the US, I have never seen a severence agreement that did not include confidentiality provisions. However (IMO) the inclusion of non-compete provisions has become more common across all levels of employment and all job categories. The vast majority of US workers will sign these agreements. That cultural trend makes it (a) easier for employers' legal counsel to manage any issues raised by the minority and (b) more d…

Yeah, having been in that situation, my thought is that negotiation is worth a go, but the real response is having a good BATNA. Yet another reason to have savings at the 6-months-of-expenses level.

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

#313

Post by Nomentatus » Thu, Jan 05, 2023, 7:13 PM UTC

It's interesting to consider Marx's viewpoint here, namely that businesses are always, even during good times, in a rigorous exploitation contest for the right to stay in business; and so only the businesses that use every possible means of exploiting their workers to the max, and thus piling up the biggest heap of surplus value as liquid assets; will be able to draw on pile that long enough to survive severe economic downturns (thus selecting for max exploitation over the longer run.) (Really a dollar auction, not that he used that phrase.) This seems esp poignant, and accurate, re low-wage and low-skill workers having to sign non-compete clauses. (Downturns were both more frequent and more severe in Marx's day.)

However I think Marx would be confounded by the Justice Department fully pushing this initiative, if indeed it does; since he believed the elites had an iron grip on democracies that was not going to be shaken. He would have predicted a far higher GINI than the (kinda high) one we have. More like Russia's, at least.

I may be selling him short though, he might view the Justice Dept action as mostly theatre; allowing other forms of exploitation to proceed apace and only addressing abusive clauses that weren't being enforced anyway; and the expansion of skilled and better-paid work in our day as only an apparent exception to his views.

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

#314

Post by OkayPhysicist » Thu, Jan 05, 2023, 7:15 PM UTC

CodeWriter23 wrote: post #272

Doesn't this diminish the value of a startup, say, if the buyer hands the principals a mountain of cash in a buyout then the principals use that cash to build in the same industry / market the startup they would have if they had all that cash in the first place? Without having the non-compete with the principals, who would even want to buy your startup?

I don't know if you've noticed, but there's this little state "California" that gets a lot of press in the start-up scene. Non-competes are basically illegal there, and it doesn't seem to have hampered either the start-ups, nor the build up of megacorporations who buy them.

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

#315

Post by gusgus01 » Thu, Jan 05, 2023, 7:15 PM UTC

Conan_Kudo wrote: post #75

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.

I think Maryland does this?

There are a lot of requirements that need to be met to make non-competes enforceable in MD, eg must meet salary bar, geographic location and duration must be specified, etc.

But I don't think it requires paying the employee during the non-compete time.

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

#316

Post by MiddleEndian » Thu, Jan 05, 2023, 7:16 PM UTC

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.

Even that seems too much in favor of non-competes. Instead it should simply be treated like another job that I can quit at-will.

If you don't want me to work for a competitor, pay me some amount of money we negotiate like a salary. It's up to you if you think it's worth enough to pay me not to work, and me to be paid enough not to advance my career how I choose during that time.

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

#317

Post by OkayPhysicist » Thu, Jan 05, 2023, 7:16 PM UTC

adventured wrote: post #231

This is both something I support (a huge win for labor), and it will accelerate the tech giants shifting work overseas to save money (incomes will rise as labor is able to more freely act to take advantage of opportunity, big tech will have to pay more for the same labor; to offset, they'll attempt to offshore more aggressively).

Those "tech giants" already have huge presences in California, where noncompetes are already illegal.

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

#318

Post by Natsu » Thu, Jan 05, 2023, 7:17 PM UTC

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.

To be honest, this always made the most sense to me. If they want a non-compete, fine, but it should have money attached because it has value they should pay for.

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

#319

Post by madcaptenor » Thu, Jan 05, 2023, 7:17 PM UTC

danhon wrote: post #302

mnehring wrote: post #290

Earlier quoted context omitted.

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 your first case, I'm pretty sure I've seen contracts that require the repayment of e.g. relocation costs if the employee leaves within x time period.

I was recruited with paid relocation at my current job, and I would have had to repay relocation costs if I left within a year.

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

#320

Post by r00fus » Thu, Jan 05, 2023, 7:19 PM UTC

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?

This sounds great (as a worker).

I could imagine it poses some risk of gaming the system (ie, have your friends startup fake hire you at 2/5x and use that to bypass noncompete or get a huge raise) - but then the company's out is to not enforce their noncompete (which is essentially what CA enforces) so I think it's a nice "velvet handcuffs" option for employers.