Noncompete clauses seem like they should be illegal on a fundamental level. Regulate industry, not it’s laborers.
New York may ban noncompete employment agreements and Wall Street is not happy
291–300 of 407 posts
Re: New York may ban noncompete employment agreements and Wall Street is not happy
#292Non-compete clauses are already extremely difficult to enforce. They're traditionally disfavored under common law; get one before a judge and it will frequently be struck out, or at minimum, sharply limited in scope. But it's not about winning an injunction or damages for the employers that use non-competes, it's about using the threat of a lawsuit to keep workers nice and biddable. So the bill is well worth doing, j…
Even better would be if employment law violations carried with them 3x+ punitive awards instead of just being made whole (while also being required to minimize damages by, e.g., getting another job).
If this existed employers would be much more well behaved, if only because of the number of lawyers who would suddenly be willing to take on lawsuits without retainer.
Re: New York may ban noncompete employment agreements and Wall Street is not happy
#293Earlier quoted context omitted.
To your point, it's ironic that firms who push a free market ethos don't actually want to compete. Instead, they want a thumb on the scale that tilts the advantages in their direction. Welcome to Crony Capitalism (which should not be confused with traditional capitalism).
Offering a contract with whatever stipulations to a potential counterparty that he can sign or not sign on his own accord is competing. Forbidding your counterparty from putting certain stipulations in their contract by using government intervention is not.
If they limited the vendor's (i.e., employee's) options, how is the being competitive?
And if the market colludes to handcuff vendors (to the benefit of the hiring companies) how is that being competitive?
Employment is already at will, and that is mutual to both parties. Why should one side be allowed to purposely disadvantage the other side? How is that being competitive?
Re: New York may ban noncompete employment agreements and Wall Street is not happy
#294Earlier quoted context omitted.
Quant firms have already adapted years ago. Now they don't have 6-24m non-competes anymore, but 6-24m notice periods. You're paid full salary (incl bonus) but you don't work ("gardening leave") and obviously can't work for a competitor (because you can have a non-compete while you're employed).
Few of my friends are in quant, but I have never heard anything like this. Can an employee just apply for notice period after a month of joining and be paid 6-24 month of salary?
I dont think employers have to worry about that when the employee works his whole life to be a quant in such a competitive industry.
Re: New York may ban noncompete employment agreements and Wall Street is not happy
#295Earlier quoted context omitted.
Free market for me (to trade securities), but not for thee (to trade your skills).
Free markets allow contracts that are upheld by the government though?
I meant "free market" in the sense of open trades on an exchange. Except for exigent or criminal cases, it's very difficult to undo trades. The "That's not fair"-argument doesn't work except for exigent (circuit breaker halt) or criminal cases.
Re: New York may ban noncompete employment agreements and Wall Street is not happy
#296Earlier quoted context omitted.
One thing I think is great about the finance industry is that the CEOs don’t pretend that humanity is split into two subspecies: executives and peons. At other companies CEOs secure themselves giant equity packages to “retain the best talent and align shareholder interests” and then think they can motivate rank and file employees with t-shirts, “the mission,” and shoutouts during all hands. In finance, CEOs acknowled…
If you operate in a zero-sum game, like most trading in financial markets, there is no way you can pretend you are contributing to society. There is literally nothing else but the money that could be the goal of the organization. This does not mean that all organizations make no contribution to society. Nobody works at MSF, for example, just for the money.
Sure. But a for-profit startup developing AI on a blockchain for pet social media is not MSF.
Moreover even in MSF if the CEO is being paid based on a compensation consultant’s report of the market rate “in order to attract and retain the best talent to advance our mission” well then everyone else should be paid on the same principle.
Re: New York may ban noncompete employment agreements and Wall Street is not happy
#297Earlier quoted context omitted.
At least in software, my base salary is ~2/3 my comp right now (ignoring stock growth). If I could take say 50% base (so ~33% total) to quit working for 6 months - 1 year, you bet I'd take that deal. Put me on garden leave for as long as you want.
How many people do you think are in a position to comfortably, even happily, take a 70% pay cut?
In fields like software or quant finance, I imagine a lot? Investopedia says that 200 salary and 500+ total is "not uncommon" for a quant, and that even entry level is 120-150. At 120k, 1/3 pay puts you at the median personal income in the US, which I'd say is a pretty sweet deal. At 200, you're close to median household at 1/3.
People in this thread are saying you "only" get your base. If they really do get full base pay of 200k, that puts them in the 94th percentile to take a forced vacation.
Re: New York may ban noncompete employment agreements and Wall Street is not happy
#298Quant 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…
Are quant firms positive sum for society? I can imagine that some trading leads to goods being priced more efficiently or w/e but I doubt the level of alpha these firms are chasing has positive externalities. If not, you should shouldn't really care about this hurting their industry.
They are a net negative in the sense that you have some of the brightest minds in the country working on derivatives instead of being in STEM labs
Re: New York may ban noncompete employment agreements and Wall Street is not happy
#299Earlier quoted context omitted.
> We just need rules to make sure that they serve their intending purpose (protecting company secrets) without negatively affecting employees. Every time there is a discussion of non-competes on HN there is always a bunch of confused people who can't grasp the difference between NCA, NDA and NSA. You don't need NCA to "protect company secrets" or ensure that people don't just steal company's clients or something. Non…
NCAs best use is when buying out a business, where the prior owner agrees to not create a competing business in a defined area for a period of time. This is effectively economically neutral, and also serves a sense of justice. This justification can be extended a bit to people in executive management roles at corporations, but for regular employees? You either got their salary value out of them when they worked for y…
I'm not even sure how I feel about the executive management part.
Yeah, for direct/important enough competitors, I can see it. Senior enough management can't help but have knowledge of a lot of things that neither the public nor most rank-and-file employees don't--and act on it at a new place even if they're not sending confidential board meeting presentations around. On the other hand, execution ability and culture matter for a lot too.
Re: New York may ban noncompete employment agreements and Wall Street is not happy
#300Quant 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…
Are quant firms positive sum for society? I can imagine that some trading leads to goods being priced more efficiently or w/e but I doubt the level of alpha these firms are chasing has positive externalities. If not, you should shouldn't really care about this hurting their industry.
You highlight a more general problem: the social/economic function of finance is to be a service industry to ensure there is liquidity available (that other people can use for their purposes).
What bugs me is that somehow society lionizes people in the money industries over those doing equivalent service jobs like gardening, lawyering, much less more important ones like garbage collection.