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

fortune.com

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

#231

Post by golergka »

ajb wrote: post #9

After noncompetes, they should go after non-solicitation. Entire teams that work well together should be able to defect from shitty employers. It kind of happens anyway but on the quiet, inefficiently - I'd love to see a job website where you can list an entire team.

It is always cheaper to buy off a team that has developed internal knowledge and cohesion with higher salaries than invest in a few years of forming such a team. Same with a junior who have been mentored and trained. Regardless of whether the previous employer was shitty or not.

If you make companies unable to protect something, they will stop investing in building it. I don’t blame you, people almost never think about second order consequences for things they propose. But banning non-compete and non-solicitation will mean that companies will be much less willing to invest into their teams and non-senior employees.

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

#232

Post by projektfu »

I think states should regulate the employee relationship a little more than they do. There should be standard contracts and the idea that a job listing is for a standard contract. If they offer you a job, it's for that contract. If they want to deviate, they either have to state up front what the additional terms are and compensation for them, or negotiate it after the offer is accepted. Contracts are not fair if people can't start from an equal footing.

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

#233

Post by ghaff »

ajb wrote: post #224
ghaff wrote: post #206

Earlier quoted context omitted.

Non-solicitation clauses are typically mostly about client lists. Companies may get a bit grumpy if a bunch of employees leave to go work for a former manager elsewhere but AFAIK there's not much they can do about it. Who is to know who even initiated the reaching out assuming a bare minimum level of discretion?

When you reduce the cost of something by a large factor, it is often gamechanging. I think that being able to move a whole team openly could reduce the cost to the new employer by a factor of three or more, which would be a significant change in the employment market, and change employer behavior. Here is how I see it working out: Lets say that Foosoft is a rapidly expanding unicorn, and Microgle is a cash cow which…

I don't think I've ever been in a circumstance where I would have had any interest in moving to another company with an entire team. I admittedly haven't moved jobs a lot but I don't really imagine it's especially common that everyone on a team would be ready to jump ship and come to terms doing the same type of job with a new employer, likely in a different location. I'm sure it happens but I can't believe it's the norm.

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

#234

Post by ianstormtaylor »

kube-system wrote: post #216
hysan wrote: post #205

Earlier quoted context omitted.

> I suspect judges in most states would invalidate a noncompete for a sandwich shop worker. Unless you have the monetary means to bring the issue to court (and see it through to the end), any clause like this will effectively be a law.

That’s not the case, very few civil legal disputes go to court, particularly if they are BS. For a total BS claim, it usually doesn’t take more than calling their bluff. Or just ignoring it. Employers usually just bet on people just following the language and not challenging it because they think it’s valid and they think they’ll have to go to court. In reality, a business doesn’t want to spend tens of thousands of d…

> very few civil legal disputes go to court

This is much more often going to be true because the dispute was never made in the first place, because of the risk it would entail to a low wage worker. They cannot afford—for reasons of time, money, health, education—to even threaten to take an employer to court.

Your argument sounds logical, but is unfortunately unaware of how real world pressures distort systems for recourse.

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

#235

Post by savanaly »

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…

Assuming they didn't hide the noncompete clause from the employee, and assuming there's not a binding minimum wage in effect, the necessary compensation is already going to be included. Unless you believe the employee is engaging in charity work on the behalf of the employer!

What's the point of a law requiring it? Unless it's an addition to a minimum wage law and only in effect for those being paid the minimum wage...

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

#236

Post by [deleted] »

donatj wrote: post #155

Sometimes I feel like corporations do things just because their lawyers are cargo culting and adding clauses because everyone else does rather than some logical reason. My sister worked at Subway and had to sign a noncompete that she wouldn’t work at another sandwich shop for three years. Are they really afraid she’s going to steal their secrets of placing meat on bread? The more cynical will certainly assume malice,…

[deleted]

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

#237

Post by js8 »

chiefalchemist wrote: post #107
js8 wrote: post #42

Earlier quoted context omitted.

The absence of "traditional capitalism" from history makes it really hard not to confuse it with "crony capitalism". Perhaps you mean liberalism, as an ideology of capitalism.

Perhaps. But, for example, we didn't always have The Fed. We didn't always have WS. We didn't always have "too big to fail". We didn't always have taxpayer financed bailouts. We didn't always have a top heavy (Fed) government (that has more influence than it has common economic sense). At yet all those entities verbally champion "free markets" and "capitalism being a superior economic paradigm", Etc. Minds get lulled…

Sounds like you are, in "broad strokes", longing after 1870s or something. I think you forgot how crony (or crappy?) it was.

What I am saying, if you really want this "traditional capitalism", which never really existed, you need some mechanism of how to avoid rich getting richer and becoming cronies (as they always did). I don't think you have an idea what such a mechanism should be.

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

#238

Post by faeriechangling »

vgatherps wrote: post #26

Quant firms at least are one of the few places where noncompetes can make sense. It's an extremely IP sensitive industry with stupendously high pay where the employee is going to someone probably competing very directly with you, for the same/similar opportunities. Actual code + NDAs banning literal reimplementations of stuff aren't that valuable, the knowledge and ideas will stay in the head of the employees. The tw…

It makes sense for the owners. It doesn’t make sense for the public that Jim Simon’s alone becomes a multi-billionaire off exploiting the financial mistakes of ordinary people.

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

#239

Post by ajb »

golergka wrote: post #231
ajb wrote: post #9

After noncompetes, they should go after non-solicitation. Entire teams that work well together should be able to defect from shitty employers. It kind of happens anyway but on the quiet, inefficiently - I'd love to see a job website where you can list an entire team.

It is always cheaper to buy off a team that has developed internal knowledge and cohesion with higher salaries than invest in a few years of forming such a team. Same with a junior who have been mentored and trained. Regardless of whether the previous employer was shitty or not. If you make companies unable to protect something, they will stop investing in building it. I don’t blame you, people almost never think abo…

Ok, the argument that giving employees more bargaining power vs their employers will somehow make the bargain they end up with poorer. This is not convincing, and nor is your unjustified patronising assumption about how much I have thought about this.

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

#240

Post by pxeboot »

kube-system wrote: post #193
avar wrote: post #172

Earlier quoted context omitted.

Let's say your sister and her coworker form a union, and Subway fires them. Now they also won't have the legal ability to simply open a new sandwich shop right next to Subway. I.e. you're imagining that non-competes are there to protect proprietary know-how. That's mostly true for some companies, but for others (e.g. Subway) it's a wedge guarding them against the collective action of their employees.

> you're imagining that non-competes are there to protect proprietary know-how. Legally speaking, that is often the case. Many states require a noncompete to have a “legitimate business reason”, and proprietary knowledge is the most common legitimate reason used. I suspect judges in most states would invalidate a noncompete for a sandwich shop worker. The legal purpose of these clauses is to keep high paid workers fr…

> A subway franchise ain’t gonna hire some PI to figure out where a former front-line employee got a new job.

No, but they might use The Work Number or a similar service.

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