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Resistance to Noncompete Agreements Is a Win for Workers

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Re: Resistance to Noncompete Agreements Is a Win for Workers

#11

Post by baronswindle »

programmarchy wrote: post #10
baronswindle wrote: post #7

I am bound by a non-compete agreement, but until a few months ago, I didn’t remember that I had signed it. At that time, I received an offer for much more money and more responsibility from a competitor. However, a close friend and co-worker reminded me about the agreement when I told him I was mulling the offer. Ultimately, I decided I didn’t want to risk asking my manager for a release, and I certainly didn’t want…

Did you receive extra compensation for the non-compete?

Yes, my signing bonus was contingent on signing a non-compete, non-disclosure, and other agreements. It wasn’t much money, and in retrospect, I don’t think it was worth it. Still, I agreed to the terms, so I should be bound to them.

Re: Resistance to Noncompete Agreements Is a Win for Workers

#12

Post by jjeaff »

drpgq wrote: post #2

I'm surprised more states and provinces don't take the example of California as a guide for non-competes. Places are always trying to create their own Silicon whatever which is obviously easier said than done, but getting rid of non-competes is one thing that can be done.

I don't think getting rid of non-competes would necessarily attract companies to your silicon-whatever.

Re: Resistance to Noncompete Agreements Is a Win for Workers

#13

Post by vsskanth »

baronswindle wrote: post #7

I am bound by a non-compete agreement, but until a few months ago, I didn’t remember that I had signed it. At that time, I received an offer for much more money and more responsibility from a competitor. However, a close friend and co-worker reminded me about the agreement when I told him I was mulling the offer. Ultimately, I decided I didn’t want to risk asking my manager for a release, and I certainly didn’t want…

I disagree.

Non-compete agreements severely disadvantage highly specialized professionals where there are only 2-3 employers in a specific area who can hire you for your skills. This reduces their leverage and allows companies to underpay their employees. This becomes a huge problem when you become experienced in your field and built up a network. One cannot simply restart their career in a different industry in many cases. With jobs becoming more specialized, this gives employers excessive leverage over employees.

As an alternative, I would prefer something like a fixed-term contract renewed every x years (typically 2-3 yrs) where you're free to move to a competitor at the end of your contract term. This protects the employers investment and also the employees leverage to negotiate higher wages or a promotion.

I would recommend looking at CA for the positive effects of banning non compete agreements.

If you're really working on proprietary material there are NDAs to protect the employer.

Re: Resistance to Noncompete Agreements Is a Win for Workers

#14

Post by bradleyjg »

There are trade-offs here even if looked at purely from the worker's point of view. While it is probably strictly superior from that POV to have the exact same job with the exact same terms except without a non-compete, the inability to commit to a non-compete means that the equilibrium is shifted and the exact same job with the exact same terms likely wouldn't have existed in the first place.

Perhaps on the balance laws against non-competes are a good idea, but we should always be wary of claims of a free lunch.

Re: Resistance to Noncompete Agreements Is a Win for Workers

#15

Post by dredmorbius »

jjeaff wrote: post #12
drpgq wrote: post #2

I'm surprised more states and provinces don't take the example of California as a guide for non-competes. Places are always trying to create their own Silicon whatever which is obviously easier said than done, but getting rid of non-competes is one thing that can be done.

I don't think getting rid of non-competes would necessarily attract companies to your silicon-whatever.

It's talent, not employers, in short supply.

Re: Resistance to Noncompete Agreements Is a Win for Workers

#16

Post by baronswindle »

bradleyjg wrote: post #14

There are trade-offs here even if looked at purely from the worker's point of view. While it is probably strictly superior from that POV to have the exact same job with the exact same terms except without a non-compete, the inability to commit to a non-compete means that the equilibrium is shifted and the exact same job with the exact same terms likely wouldn't have existed in the first place. Perhaps on the balance…

This is a great point. Non-compete agreements reduce risk of losing otherwise unprotected information to a competitor and probably increase retention of valuable employees. So preventing employers from using these agreements would increase risk and turnover, and employers might (read: probably would) decrease offered compensation in response.

Now, this effect might be dwarfed by the upward pressure on compensation caused by greater availability of alternative jobs for employees, but it’s not obvious to me that would be the case. I’d be interested to see some empirical studies on the subject.

Re: Resistance to Noncompete Agreements Is a Win for Workers

#18

Post by paxys »

baronswindle wrote: post #7

I am bound by a non-compete agreement, but until a few months ago, I didn’t remember that I had signed it. At that time, I received an offer for much more money and more responsibility from a competitor. However, a close friend and co-worker reminded me about the agreement when I told him I was mulling the offer. Ultimately, I decided I didn’t want to risk asking my manager for a release, and I certainly didn’t want…

> I don’t think it’s unreasonable to allow organizations to protect that kind of information.

Why though? As you pointed out, it isn't protected IP, but rather knowledge and skills that YOU have developed and hold in your head. Does the company legally or morally have any license over or?

Re: Resistance to Noncompete Agreements Is a Win for Workers

#19

Post by ironmagma »

dredmorbius wrote: post #15
jjeaff wrote: post #12

Earlier quoted context omitted.

I don't think getting rid of non-competes would necessarily attract companies to your silicon-whatever.

It's talent, not employers, in short supply.

Not really true. The whole existence of a “brain drain” indicates that the places the workers are coming from have insufficient opportunities.

Re: Resistance to Noncompete Agreements Is a Win for Workers

#20

Post by DeRock »

jjeaff wrote: post #12
drpgq wrote: post #2

I'm surprised more states and provinces don't take the example of California as a guide for non-competes. Places are always trying to create their own Silicon whatever which is obviously easier said than done, but getting rid of non-competes is one thing that can be done.

I don't think getting rid of non-competes would necessarily attract companies to your silicon-whatever.

Silicon Valley isn’t what it is because it attracted companies, it’s a hot bed because it empowers people to start their own.
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