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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

#501

Post by Nomentatus »

dec0dedab0de wrote: post #418
Nomentatus wrote: post #280

Earlier quoted context omitted.

IANAL but I had (kinda unconsciously) assumed that what can be protected by trade secrets was broader than what patents protect (patents merely implementations - which might be broad.) So I'd like to know more; though I wouldn't be shocked (now that I think about it) if you're quite right. In any case, even if the employee refuses to work on a given task, that's information. Having to say: "Yeah, I think you want som…

As far as I understand it, the only time trade secrets are protected is when they are forced to be revealed in court. If for example Zildjan cymbals is in a lawsuit, and discovery requires that they divulge their trade secret for making cymbals, then the court will issue an NDA for everyone that sees it, and seal the records. However, if a former Zildjan employee writes a book with the details, then there is no prote…

No, that's one aspect of protection. Penalties apply otherwise see the Waymo/Uber case.

Apparently the US statutes of relevance are:

The Economic Espionage Act of 1996

The Defend Trade Secrets Act of 2016

Re publication I think you're referring to a possible US constitutional issue: https://www.dmlp.org/legal-guide/publishing-trade-secrets

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

#502

Post by trentnix »

humanistbot wrote: post #496
trentnix wrote: post #469

Earlier quoted context omitted.

100% It’s ridiculous how flippant and deceptive companies are about signing non-competes. Sometimes they neglect to mention it until you actually show up for work. So there you are, depending on this new job, standing in front of your new boss, compelled to create and maintain a positive relationship, presented with a legal contract that significantly damaged your leverage and alternate prospects. That might even be…

> That might even be criminal. Careful with that word. Non-competes are non-enforceable in California and other jurisdictions. Some people say "non-competes are illegal in California", but it is not a crime to ask someone to sign a contract with a non-enforceable provision.

The criminal part I referred to is when it is insisted that you sign it under duress.

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

#503

Post by Rayhem »

devmunchies wrote: post #426
notch656c wrote: post #51

Earlier quoted context omitted.

Should be reciprocal if it exists. I.e. if the employee leaves, the company would be barred from hiring anyone else for any remotely similar tasks. Make them taste their own medicine and decide if it's worth it.

It IS reciprocal. You're welcome to present that "non-comparable hire" contract to the company before accepting your offer, but they no doubt will rescind your offer. You have the same right to reject the offer if you don't like the contract they present. It's common for executive's lawyers to negotiate contracts with the firm before accepting an offer (including what the firm can or cannot do to the executive withou…

I guess I'd say that's true to first order. Sure, if a company does something egregious that I don't like it is within the realm of possibility that I can go found another one, double their revenue, and grind them out of existence before doing things my way. I suppose you could say that's reciprocal since that's kind of what they did to me in this hypothetical example. Fortune rarely favors that, though, and if you ask me companies have vastly more economic firepower than independent contributors but haven't adopted the corresponding responsibility.

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

#504

Post by heavyset_go »

simongray wrote: post #478
heavyset_go wrote: post #464

Earlier quoted context omitted.

If you think that's bad, I've been to multiple medical practices where part of the "standard legal stuff" they want you to sign would have you give them the right to sell your private information and info about your visit to their partners for the purposes of advertising, etc.

This is where you say the word GDPR (if you're in Europe). I've done it to some HR person and subsequently received a long email apology from the (very nervous) boss of the company the day after.

I'm unfortunately not in a country with good privacy laws, would love to be able to do that, though.

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

#505

Post by 22SAS »

humanistbot wrote: post #496
trentnix wrote: post #469

Earlier quoted context omitted.

100% It’s ridiculous how flippant and deceptive companies are about signing non-competes. Sometimes they neglect to mention it until you actually show up for work. So there you are, depending on this new job, standing in front of your new boss, compelled to create and maintain a positive relationship, presented with a legal contract that significantly damaged your leverage and alternate prospects. That might even be…

> That might even be criminal. Careful with that word. Non-competes are non-enforceable in California and other jurisdictions. Some people say "non-competes are illegal in California", but it is not a crime to ask someone to sign a contract with a non-enforceable provision.

One of the best quant firms, TGS, is located in CA and enforces non-competes no problem. They had an employee sue, his NC got waived but he had to pay 7-figures to TGS.

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

#506

Post by 22SAS »

makestuff wrote: post #176
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…

IMO it should be full compensation of your last years' w2. In finance they pay you garden leave but only base pay. So they are only out a small portion of your actual cost.

Not all of them do it that way. The HFT I work with, pays the greater of base salary or 75% of base+bonus averaged over the last two years.

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

#507

Post by 22SAS »

xyzelement wrote: post #180

Non competes are often necessary in the most interesting jobs. A few years ago I took a job at a hedge fund with a 2 year noncompete. I took a calculated risk doing so. In the 2 years I worked in the fund, I learned a tremendous amount thanks to being exposed to the "secret sauce" which would have been really damaging for me to take to a competitor. After I left the fund, I took the 2 year non-compete (ie: don't work…

I work for a market maker. Have a maximum possible one year NC. Thinking of doing something similar in case my firm slams me with NC > 6 months, when I resign.

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

#508

Post by 22SAS »

chaoz_ wrote: post #71

Would be interesting to see how contracts in HFT are going to change. From what I heard, when some specialists (e.g. hardware folks) are changing jobs, then the firm is likely to lose an "edge" as competitors will have access to similar technology/knowledge. Garden leave helps to mitigate this effect. If non-competes are banned, then TCs are (probably) going to rise even more.

I work at an HFT. I am expecting most of the major firms, especially Citadel Securities, lobby hard against this.

While non-competes on our side are paid, they're a pain in the ass to navigate if one is a visa worker (my case). So, I am praying for this to pass. If it does, I am starting interviewing with competitors the very next day.

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

#509

Post by 22SAS »

logicalmonster wrote: post #112
chaoz_ wrote: post #71

Would be interesting to see how contracts in HFT are going to change. From what I heard, when some specialists (e.g. hardware folks) are changing jobs, then the firm is likely to lose an "edge" as competitors will have access to similar technology/knowledge. Garden leave helps to mitigate this effect. If non-competes are banned, then TCs are (probably) going to rise even more.

Is it harder to come up a new idea for a trading strategy or is it harder to actually implement the system to perform those trades? Not being in that industry, to me it seems like the easiest part is coming up with a new trading idea. The hardest part would seem to be actually implementing it without bugs. Therefore, I'm not sure if noncompete clauses really provide a super-significant amount of value. Even if you le…

Both. If one is on a competitive exchange or a latency-sensitive asset class, need to be both smart and fast.

Also, strategies change all the time and are mostly the domain of quants and traders. What they did a year ago, could very well be history at the firm they worked at.

I'd say an idea that generates alpha is tougher. I have seen firms like XR have great technology, but sucky ideas. They were fast, not smart and hence they didn't make a killing like their competitors did, due to all the volatility in the last three years.

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

#510

Post by Falkon1313 »

TechBro8615 wrote: post #342
snowwrestler wrote: post #267

Earlier quoted context omitted.

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’…

"Trade Secrets" have always sounded like a form of protectionism to me, anyway. If you believe software patents shouldn't exist, then you should follow the same logic to lead to the conclusion that trade secrets shouldn't exist either. Both are expressions of business processes that shouldn't otherwise be restricted by blanket clauses or gag orders. To me (a non-lawyer and non-legal scholar), an NDA seems more approp…

With a non-disparagement agreement, it's often pretty easy to see if someone publicly disparaged them. A public tweet about how your last job was a hellhole or your boss was an idiot coupled with a Linkedin profile showing where your job was, or just a series of posts on one platform where one indicates your employer and another is disparaging.

Edit: Oops, I misread NDA as Non-Disparagement instead of Non-Disclosure.

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