Just out of curiosity, were any non-competes ever actually enforced by the courts for a reason other than stealing clients or trade secrets?
FTC announces rule banning noncompetes
171–180 of 530 posts
Re: FTC announces rule banning noncompetes
#172Re: FTC announces rule banning noncompetes
#173Earlier quoted context omitted.
I suspect this won’t survive a challenge in front of the current Supreme Court, unfortunately.
I am not entirely sure. Without anti compete stealing your competitors staff becomes a valid business strategy. Buy up the competitions best people and cripple them. This favors those with the most capital not the least.
Interesting how you call it “stealing” to hire someone who worked at a competitor. They aren’t property, companies don’t own people.
If you don’t want to them to leave, then entice them to stay.
Getting rid of noncompetes puts workers and companies on more even footing, reducing the large power difference.
Re: FTC announces rule banning noncompetes
#174Full text of the ruling here: https://www.ftc.gov/system/files/ftc_gov/pdf/noncompete-rule... It's not surprising after thinking about it for a minute, but it did startle me to read that the FTC measures innovation by the number of patents issued. > In addition, the final rule is expected to help drive innovation, leading to an estimated average increase of 17,000 to 29,000 more patents each year for the next 10 year…
Both things - that the number of patents measures innovation, and that they serve to stifle it, can be true at the same time. Under a fixed patent regime, the more innovation there is, the more individual patents are necessary to stifle it. Of course, if we allow the patent regime to vary, then if it changes to make patents easier to acquire then that means less innovation.
However, it's true that this property - of being a valid measure, but interventions to change it having the opposite effect on the inferred variable - is a very unfortunate one in a metric.
Re: FTC announces rule banning noncompetes
#175My attorney friends tell me that the FTC doesn't really have the ability to do this, since contract law is part of state law. (My poor paraphrasing, not theirs.) I've been surprised I haven't seen this mentioned on social media or in the news. Are my friends wrong, or are people celebrating because this is just a step in the right direction even if it may not do anything yet?
Ask your attorney friends if a farmer growing food on their own land to feed to their own animals is "interstate commerce", and ask them to explain that to you. What I'm referring to here is Wickard v Filburn in which the Supreme Court ruled that a farmer growing food on his own land to feed to his own animals was participating in "interstate commerce" and could thus be regulated by the federal government. This is a…
Is it the same people? It seems like the current Supreme Court is very much against decisions like the weird farmer one and likely to roll such things back.
Re: FTC announces rule banning noncompetes
#176It seems this also allows you to accept another job for a competitor "after hours".
I wonder how many companies will start offering "consulting" over brunch on a saturday to their competitors employees?
Sure, NDA's still apply, but have fun proving that if it's all verbal over brunch...
Re: FTC announces rule banning noncompetes
#177Why now?
Because excesses finally became so ridiculously over the top that it was finally politically viable to address it. Remember, chain restaurants have started using non-competes to ban servers and cooks from moving to another employer. The situation is finally in the eyes of the general public.
I had not heard about the chain restaurants; that is one of the scummiest things I've ever heard and it angers me that it takes place.
Re: FTC announces rule banning noncompetes
#178Earlier quoted context omitted.
> I've always thought of that as representing a stifling of innovation. The short lifetime of patents and the requirement that you publish detailed information about the invention significantly mitigates this. If they were measuring innovation by the number of copyrights filed, then I might agree with you.
"short lifetime" is relative. Had Apple been granted a patent on the idea of a smartphone the same year they released the iPhone, that patent would only expire in three years. There are some industries where due to slow-moving markets the 20 year patent period is still sensible, but for most sectors we would be better off with a 5 or 10 year patent period to account for the increased speed of innovation.
Apple did not invent the smart phone. The invented several features that make them useful (even their version one lacked apps), but others made smart phones before them. What Apple really did was make them useful by eliminating several of the things that made them annoying not not useful before.
Re: FTC announces rule banning noncompetes
#179Earlier quoted context omitted.
They have other tricks. My comp was about 80% bonus, most of which went into deferred comp for a few years. If I was to go to a competitor without permission (independent of the non compete) I would forfeit the deferred comp.
But at a certain point that deferred comp is “enough” that if you just go to work each day and hide in the loos it’s worth waiting around and collecting the cash. And the company won’t benefit from a mostly checked out workforce
The bar is quite high at these kinds of companies. If you let off the gas and try to coast like that, you'll just get fired and thus lose the deferred comp that way.
Re: FTC announces rule banning noncompetes
#180Banning noncompetes discourages companies from training workers, since they can leave immediately after their training is over. It also impinges on worker freedom. Currently I can apply for jobs with and without noncompetes, and if the job with the noncompete pays substantially more or is more attractive in some other way, I can take it. The FTC rule would deprive me of that choice. I have been hired to write softwar…
Using investment strategies developed at Company A to make money for Company B would likely be a violation of your NDA. Even if you didn't use anything you learned at Company B, you might still expect a trade secrets lawsuit if they really suspect you did (printing out docs, storing docs off network, etc.) There already is plenty that companies can do to protect trade secrets from leaving with employees that don't require you to find a new career field. Like maybe Company A can better separate the work so that every software engineer doesn't need to have access to the secret sauce or simply making the job more attractive so that the ones with the secret sauce don't feel the need to leave at all. Why would a company bother to work hard to retain you if they know that leaving would involve taking a pay cut, relocating, or having to restart your career elsewhere? Employers may offer more initially when hiring non-compete workers but there's little incentive to grow their wages. As for training costs, many companies already require extra years of service for educational assistance. Simply make the employee pay back any training costs if they voluntarily leave for a new job within 6 months after initial training is concluded.