New York may ban noncompete employment agreements and Wall Street is not happy • Hacker News Board

Re: New York may ban noncompete employment agreements and Wall Street is not happy

#121

Post by gorbachev » Sat, Nov 18, 2023, 1:40 PM UTC

xvector wrote: post #79

vgatherps wrote: post #69

Earlier quoted context omitted.

Most tech work is not particularly novel at a technical level. Very few services have any sort of massive advantage in the technical IP. Some of them might have advantage in customer/data analytics, but most advantage is in the idea itself as well as being gaining the market and brand. Another firm can't just go "Ah, today we'll knock out X new app and take 50% of the market" This is not true in trading. If I go take…

Why is that the employee's problem? Pay the employee well and they will stick around.

The compensation model in investment companies is such that they will not be able to pay employees well compared to how much value they bring in, unless you're a partner.

Furthermore the industry attracts the sort of people who are never satisfied with what they got, and are always looking for more.

Not that I'm advocating for non-competes, just saying that you can't address the concerns non-competes are attempting to address by "paying employees well".

Re: New York may ban noncompete employment agreements and Wall Street is not happy

#122

Post by briandear » Sat, Nov 18, 2023, 1:44 PM UTC

felipelemos wrote: post #110

cj wrote: post #105

Earlier quoted context omitted.

> Which part of this is "IP"? I should have said conditional customer data. (Client lists, phone numbers, email addresses - basically whatever you can export out of Salesforce) In order to poach your old company’s customers, you’ll need confidential data from your prior employer, assuming that your employer doesn’t publish their client roster publicly. The debate is being dragged from poaching customers to how IP pro…

My email is not your confidential data. My phone number is not your confidential data. If your company can only exist by blocking other companies from competition with your customer, then your company should not exist in first place.

My list of your email is confidential data. The fact that I am talking to you is confidential. If you choose to disclose it, that’s your business, but a client list is absolutely confidential data.

Re: New York may ban noncompete employment agreements and Wall Street is not happy

#123

Post by mortehu » Sat, Nov 18, 2023, 1:45 PM UTC

jmyeet wrote: post #77

Here's my stance on noncompetes: I'm fine with them as long as the employee is compensated sufficiently. Wall Street firms will often have 12 month noncompetes but you get paid for that year. Details matter however. Like you might be paying for health insurance (COBRA). You won't be getting any bonus. Any bonus money in the fund gets removed and put into treasuries, which in some years may have a better performance s…

> the employee should get paid 1.5 times the annual average total compensation they had for the previous 2, 3, 4 or 5 years, whichever is best for the employee.

Wouldn't everyone quit after having two unusually good years back to back?

Re: New York may ban noncompete employment agreements and Wall Street is not happy

#124

Post by Spooky23 » Sat, Nov 18, 2023, 1:47 PM UTC

bradleyjg wrote: post #101

GuB-42 wrote: post #78

The article doesn't address what I think is the most important aspect of noncompete agreements: compensation. In France, and I believe in many other places as well, you can't have a noncompete without proper compensation. Compensation is relative to how it will affect the former employee career, it is usually less than a full wage, but it can be that if it makes finding a new job particularly difficult. There have be…

This is a problem in the tech industry but not on Wall Street. The norm there is paid time off between jobs (“gardening leave”). Everyone knows it is part of the system and that a mid level or senior hire can’t start right away. They also buy out still vesting bonuses and the like. It’s quite a civilized system and I think the law ought to leave it alone, while addressing abusive ones like we have in tech.

When this legislation was originally introduced, an Albany area Jimmy Johns franchisee got attention for suing former minimum wage employees who took the secrets of sandwich assembly to a nearby Subway and local deli.

Timing was poor - during the budget season when the entire legislature was in town. The notion that a sandwich stop should be allowed to restrict the future employment is absurd on its face.

Yet there are fields where it makes sense. When I was an employee of the government, ethics laws limited my ability to leave and sell my services to the government in various ways. There are similar scenarios in other industries.

Re: New York may ban noncompete employment agreements and Wall Street is not happy

#125

Post by dudul » Sat, Nov 18, 2023, 1:48 PM UTC

qwerty456127 wrote: post #17

I've heard about a good compromise option existing in a country in Europe: noncompete agreements are not banned completely but are limited to last just half a year after the employee leaves the company. It can also last much longer in case the employer agrees to keep paying half the salary to the former employee.

Sounds like a terrible compromise to me.

Why do I need to spend 6 months without pay and then more time with only 50%?

Re: New York may ban noncompete employment agreements and Wall Street is not happy

#126

Post by acdha » Sat, Nov 18, 2023, 1:48 PM UTC

cj wrote: post #117

felipelemos wrote: post #110

Earlier quoted context omitted.

My email is not your confidential data. My phone number is not your confidential data. If your company can only exist by blocking other companies from competition with your customer, then your company should not exist in first place.

We’re talking about an insider who has insider knowledge about accounts and maybe also a personal relationship that they were paid to develop with a client. Also, it’s a 100% fact that companies consider client rosters confidential. It’s fun to say no one can claim my name or phone number as confidential data… but that’s not how things work.

> Also, it’s a 100% fact that companies consider client rosters confidential. It’s fun to say no one can claim my name or phone number as confidential data… but that’s not how things work.

It is how things work legally. What you are confusing is the distinction between individual bits of information and a database: if a salesperson leaves and calls their old client, nobody reasonably expects them to forget about that relationship or be unable to look up a phone number.

If there’s an entire lead database, that might be a different story if it includes non-public data and the company can show that it’s treated as a valuable asset (limited access, confidentiality agreements, etc. ). If it’s something you could recreate with a few Google searches, you’ll have a hard time convincing a judge that there’s substantial value in its secrecy.

Re: New York may ban noncompete employment agreements and Wall Street is not happy

#127

Post by deezleguy » Sat, Nov 18, 2023, 1:49 PM UTC

cj wrote: post #111

lordnacho wrote: post #81

Earlier quoted context omitted.

> All of these contracts are time limited, FWIW. E.g. non-solicitation doesn't mean you can never work your your colleagues again. It protects against someone leaving and then immediately poaching all employees within 12 months. After 12 months you're welcome to poach as much as you'd like. For me that doesn't change anything. You should be allowed to tell your customer to come with you to a new business, the next da…

Say you join a startup. They get some early traction and they have 5 customers paying $5m/yr for a technology platform. Let’s say it took $20m in R&D and marketing to get the product built and to land those 5 multi-million dollar accounts. Without a non-compete and without a strong IP clause, a handful of employees could very easily steal the IP and steal the client list, start a new company, offer the same product f…

> Free market, yes. Unquestionably free market with no regulation, not going to work.

I agree with what you’re saying, but non-competes are an example of free market not a counterexample. The employer is willing to give you x amount of compensation in return for your labor and for an agreement not to compete for some period of time when employment ends.

Re: New York may ban noncompete employment agreements and Wall Street is not happy

#128

Post by potatolicious » Sat, Nov 18, 2023, 1:50 PM UTC

appplication wrote: post #114

bradleyjg wrote: post #101

Earlier quoted context omitted.

This is a problem in the tech industry but not on Wall Street. The norm there is paid time off between jobs (“gardening leave”). Everyone knows it is part of the system and that a mid level or senior hire can’t start right away. They also buy out still vesting bonuses and the like. It’s quite a civilized system and I think the law ought to leave it alone, while addressing abusive ones like we have in tech.

Where do you see this issue in tech? Certainly not CA.

NY, WA, other tech hubs in the US that aren’t California.

That said garden leave is not all sunshine and roses like OP describes. It’s common on Wall Street but a huge part of your normal compensation is performance bonuses - and typically garden leaves only cover base salary.

A typical garden leave doesn’t come close to full income replacement for the period. But it’s better than nothing - which is the status quo in tech.

FWIW American courts also tend to frown on non competes that do not compensate for forced unemployment and have generally sided with the worker. This is (yet another) way that employers deprive employees of their rights by using the expense of litigation against them. This is also why we need regulation around this - you should not have to fight this in court to have your basic rights asserted.

Re: New York may ban noncompete employment agreements and Wall Street is not happy

#129

Post by dudul » Sat, Nov 18, 2023, 1:51 PM UTC

ResearchCode wrote: post #23

walidthedream wrote: post #20

New Yorks leads the pack as usual. If you want to understand why continental European salaries are mostly low , don’t only look at the social security cost, but also at the labor law which is a middle aged indentured servitude heritage wrapped with worker rights bullshit : in France, 3 months notice period, up to 8 month of trial period, non competes with ridiculous comp. are very common for startups and Mid Sized bu…

Does French law mandate trial periods or 3 month notice periods? You can usually negotiate those away. Reference checks or trial period but you should really not require both, that's an employer problem. Europe pays lower than the US but pays better than other regions. There are many countries with low pay and poor labor rights. We should try to have high pay and better labor rights.

Yes the 3 months notice is legally enforced in France with a few cases where it can be waived - including both the employee ans employer agreeing to skip it.

Note that this notice goes both ways: when an employee resigns or is let go.

Re: New York may ban noncompete employment agreements and Wall Street is not happy

#130

Post by bradleyjg » Sat, Nov 18, 2023, 1:53 PM UTC

Spivak wrote: post #115

bradleyjg wrote: post #101

Earlier quoted context omitted.

This is a problem in the tech industry but not on Wall Street. The norm there is paid time off between jobs (“gardening leave”). Everyone knows it is part of the system and that a mid level or senior hire can’t start right away. They also buy out still vesting bonuses and the like. It’s quite a civilized system and I think the law ought to leave it alone, while addressing abusive ones like we have in tech.

Surely anyone looking at such a system from the outside sees the economic inefficiency for nebulous gain. Why not do away with it and let them start right away?

If it ain’t broke, why are you trying to fix it?