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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

#381

Post by gen220 »

Digory wrote: post #354
gen220 wrote: post #282

Earlier quoted context omitted.

That makes sense as to why an employer would want a non-compete. Is there some way that this translates into why "we the people" would want to allow companies to enforce non-competes? From my perspective, if a company's sauce is personal relationships, the non-compete is not particularly effective in engendering loyalty and extracting the greatest value from that relationship. A disaffected salesperson is not going t…

1. Shifting profits from the entrepreneur (with skin in the game of providing consumer wants) to the middleman can be deadweight. You'd want some evidence that rewarding disloyal middlemen results in we the consumer surplus, not just a flourishing middle-man economy. There can be price-discovery benefits to middlemen, like market makers at the NYSE. But the financial markets usually involve fungible goods. Consumers…

Good points! Let me try to dissect them, let me know what you think.

1. I agree with the themes of not paying disloyal middlemen, but I'm not sure if it applies to the example.

> You'd want some evidence that rewarding disloyal middlemen results in we the consumer surplus,

If entrepreneur Y is willing to pay 2x the salary of entrepreneur X for the same employee, presumably its because Y thinks they can use the salesperson's relationships (at least) twice as productively.

In that case, Y has a product to sell that is twice as valuable as X's. As a consumer, don't we want companies we engage with to use the most valuable products?

I'm not suggesting that we pay unaligned people more (obviously, this is bad). Rather, I'm saying we shouldn't erect barriers to prevent disgruntled employees from leaving, because we're paying the opportunity cost of them not being a more productive employee at a competitor.

2. I'm not sure if this holds up in 2023, where talent networks are global and talent discovery is so cheap.

I think this argument makes sense if the skills of people who are signing non-competes were not so rare and in-demand. If I exclusively depended on family ties to run a company in 2023, I'd expect my competition to run me over.

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

#382

Post by sagarm »

MiddleEndian wrote: post #316
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.

This seems equivalent to simply retaining the employee.

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

#383

Post by andirk »

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…

To a lot of us, career growth and the knowledge thereof is a requirement; we seek to be onward and upward whether in skillset, enjoyment, pay, etc. I have learnt in recent HN thread that this is not as common as I thought [0].

Non-competes are stupid period and thankfully in California are not enforceable. It's similar to a prenuptial agreement in marriage except who the f is marrying their employer?? A good employer wants to keep you, will compensate you to do so, and if they can't, they are proud of you and wish you well, _even if that means a stronger competitor_ .

[0] https://news.ycombinator.com/item?id=34257325

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

#384

Post by mcv »

steelframe wrote: post #332

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…

Contracts that restrict you, whether non-compete, NDA or otherwise, should be as narrow as possible and limited to a reasonable time. Overly broad restrictions are stupid, dangerous, and unnecessary.

I had quite a bit of discussion about this for my current project. It had two non-competes; one for the client and one for the intermediary, and the important one, the one by the client, sounded very broad and vague, and I wanted explicit and in writing how broad they meant it. (Turned out to be only about a handful of their direct competitors.)

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

#385

Post by nerpderp82 »

steelframe wrote: post #332

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…

It is legally lazy of them to throw that in there and good for you to stand your ground.

Make them sleep in the bed they make!

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

#386

Post by encryptluks2 »

steelframe wrote: post #332

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…

Smart choice. If they are trying to get you to sign an NDA before even being offered a job then they better be offering some kind of amazing package. I've seen recruiter companies try to do the same just to interview.

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

#387

Post by andirk »

asdff wrote: post #374
ErikVandeWater wrote: post #311

Earlier quoted context omitted.

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

Sure, but your next employer isn't going to care that you took up fly fishing, they will just see a gap in your resume and ding you for that.

Whenever asked why there's a gap in my resume, I take insult, laugh, and say I didn't feel like working. I am compensated handsomely for my skills and that offers me the opportunity to be away from FTE as I so desire. I also have this and that side project I worked on because I'm obsessed with this coding shit. And then I ask them why is there no break in their resume? What are they afraid of? Are they not good at saving $? Have no desire to see the world outside of work? Never seen the-- you get the point.

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

#388

Post by andirk »

stcredzero wrote: post #158
Rayhem wrote: post #132

Earlier quoted context omitted.

It is always interesting to me how much 'morality' (in the sense that an individual/corporation 'should' abide by these rules) can be derived from applying symmetry principles.

People aren't particles, though. What symmetry tests are good for with regards to human beings, is to see if something like a principle which claims to be "fundamental" is really fundamental.

I think it's safe to argue that every single thing in a contract is for the benefit of the employer and has zero to do with morality. And it is up to the employee to have their own internal contract that the employer must align to. It's like legal court where the prosecution and defense go full court press not out of morality but because the belief that if both sides pull their hardest then the truth will be found.

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

#389

Post by bumby »

steelframe wrote: post #332

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…

>I personally know several people in my state who had their careers impacted due to threats from former employers over an NDA

I'm curious, was there any actual legal action or was it just the threat? I'm not dismissing the fact that a threat can create enough risk to make someone change their behavior, but I've also heard these NDAs are tough to legally enforce. Of course, nobody wants to be the one calling their bluff only to find out it wasn't an idle threat.

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

#390

Post by rnk »

encryptluks2 wrote: post #386
steelframe wrote: post #332

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…

Smart choice. If they are trying to get you to sign an NDA before even being offered a job then they better be offering some kind of amazing package. I've seen recruiter companies try to do the same just to interview.

Everyone always thinks their non-compete is good for you and the industry, don't worry about it. They are all bs. I once had a job offer at a startup in seattle where the noncompete said something along the lines of you can't ever say anything about bill gates, who was one of the investors (it seemed extremely broad). I said fuck that, you aren't going to prevent me from making my own political comments about him, whatever they are. I think they wanted to limit people from saying things about his personal family or something. Anyway, I wasted some money on my own lawyer who negotiated a much stricter thing with them. Just say no to these.
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