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

When I was interviewing last year, I cut off an interview loop with a company primarily because I don't reside in California and their NDA was, "Anything you say, anything we say, forever." Since I was also interviewing with one of their direct competitors that I really preferred, I didn't want to put myself anywhere near a legal situation where they might try to mess things up for my career.

They freaked out when I told them I didn't want to complete the interview loop because apparently I had passed their initial "weeder" interview and they were getting really excited about the possibility of me joining. But I would have had to sign that "everything, forever" NDA to keep going, and they weren't willing to go back to legal or do anything to change it, so that was that.

I personally know several people in my state who had their careers impacted due to threats from former employers over an NDA, so I really don't feel like that was an overreaction on my end. And I'm super-happy where I ended up.

I just wanted to provide a data point on how NDAs that go overboard ("everything, forever") can cut both ways.

It depends entirely on your target goal.

If your target goal is something like "maximization of worker pay",for example (really, i'm not suggesting that's what you want, it's just a convenient example), then no, there will never be a compelling argument for non-competes, because they always stand in the way of that particular goal.

This is because costs by employers can always be expressed without non-competes somehow to within some reason, and not get in the way of that goal (but may harm others).

For example - there are fields where large amounts of on-the-job training is paid for by employers. Certainly they don't get nothing out of it in the end, but they have upfront costs too. It is more frontloaded cost wise, such that if the employee leaves immediately after training, the employer would lose money.

The literal training cost can simply be expressed as an actual penalty for leaving rather than a non-compete. But the loss of time and need to train someone else (IE the time during which you would have made more money on the person who just left) is harder to value as a penalty (since it depends on what your profit would have been, which is probably variable, and lots of other things). So that is often expressed as a non-compete. But that would still stand in the way of "worker pay maximization", so that particular difficulty is not compelling for that goal (IE you could just assign a value to it and deal)

Similarly, there are fields where there are not enough people, and great upfront cost may be spend in acquiring people (doctors in rural areas, etc). Normally they would non-compete them and give a significant hiring bonus. You can also express this as a penalty, but it still puts you out a doctor for the time it takes to recruit someone else, etc, which is bad for the community. But not for worker pay!

If you go for worker pay maximization, them taking a 250k bonus to go work in that area, then leaving a year later (or whatever), maximizes their pay. It also likely forces the community to pay more to the next person to have that not happen!

So again, if your target goal is maximization of worker pay, no, I think there is no compelling arguments for non-competes.

If you switch your goal to say something like "maximization of production of useful things", maybe you could get to more compelling argument, because constant job hopping by everyone, while maximizing worker pay, probably interferes with maximizing the production of useful things.

Or if you introduce some balance of goals, maybe.

Maybe as an edge case. I think this argument underestimates survival instincts.

Some will, for sure. But plenty of others will struggle severely or even enter into depression.

Productive work is a major factor in psychological well-being. And a lot of people have spent their career being a highly specialized expert in one thing.

Expecting them to abandon that for a year or more in order to instead contribute "entry-level skills" at something else can be difficult. It's already known how retirement can lead to depression and a painful feeling of emptiness -- imagine how much worse that can be in the prime middle of your career.

It's not about the money or whether GDP measures something or not. It's about the ability to contribute what you're best at, where your excellence lies, or having that ability taken away. For many people, there isn't any kind of easy substitute for their primary area of expertise.

If something unethical works doesn't mean it should be condoned.