FTC announces rule banning noncompetes • Hacker News Board

Re: FTC announces rule banning noncompetes

#181

Post by vehemenz » Tue, Apr 23, 2024, 8:39 PM UTC

Bostonian wrote: post #124

Banning 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…

I see the point, but wouldn't this new rule also force employers to pay more to prevent workers from leaving in the first place? Employees won't leave if they are well compensated.

Re: FTC announces rule banning noncompetes

#182

Post by snapetom » Tue, Apr 23, 2024, 8:42 PM UTC

aidenn0 wrote: post #64

I am 100% for this, but it makes me sad that the legislative branch has nearly completely abandoned its duty to pass laws in favor of granting the executive branch the authority to regulate just about everything. This is a problem for two main reasons: 1. The executive branch can unilaterally revoke these regulations, making them more volatile. Maybe my non-compete is invalid today, but will it be in 4 years when I a…

This has been a problem for decades. Congress' focus is more on self-preservation than good policy. For example, granting abortion rights through case law was always incredibly tenuous and now that's been proven.

I predict this will be kicked around the executive branch and bounced in courts. Even if it stands, like you point out, future administrations can just revoke it. All the while, Congress should be taking action and codifying this.

Re: FTC announces rule banning noncompetes

#183

Post by xbar » Tue, Apr 23, 2024, 8:42 PM UTC

bretthoerner wrote: post #11

My 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?

It is a good question. I am glad that the FTC is testing it.

Re: FTC announces rule banning noncompetes

#184

Post by evantbyrne » Tue, Apr 23, 2024, 8:43 PM UTC

Is this just clarifying existing case law? When working on contracts with my attorney he mentioned on multiple occasions that noncompetes were unenforceable. I'm in Michigan for whatever that is worth.

Re: FTC announces rule banning noncompetes

#185

Post by eatsyourtacos » Tue, Apr 23, 2024, 8:44 PM UTC

0xbadcafebee wrote: post #169

Shorel wrote: post #105

Can they also ban tipping culture?

Tipping culture stays because consumers don't want to pay what the product is worth. You reduce salaries and suddenly the food looks cheaper, and the "tip" is what they took out of the salaries. When restaurants end tipping, consumers revolt at the real prices.

That's a bunch of bullshit. The tips advantage the EMPLOYER because there is zero transparency to the consumer.

I have no idea how much every server I go to is making. How do I know if it's good or bad? How do I know if they have any benefits? Especially now that everyone wants a fucking tip. I buy some ice cream with my kids and I'm supposed to tip 20% to someone for scooping my ice cream? I have no idea if the server is making $15/hour or $4/hour to determine if the tip is part of their pay or pure bonus etc.

It's baffling you blame the consumer. Employers are the ones that don't want to pay what their employee is worth.

Honestly the entire country is broken because of simple issues of non-guaranteed healthcare and non-guaranteed time off etc. If basic human rights were guaranteed we wouldn't have to play this constant game of figuring out what to pay people at a minimum.

Re: FTC announces rule banning noncompetes

#186

Post by j-cheong » Tue, Apr 23, 2024, 8:45 PM UTC

MattSteelblade wrote: post #25

pylua wrote: post #10

If I have an existing non compete — what does this mean for me ? Is it invalid?

Going off of the press release, it doesn't go into effect until 120 days after publication and doesn't apply to current senior executives which are defined as "workers earning more than $151,164 annually and who are in policy-making positions." I would also imagine that it will immediately be challenged in court.

I was under the impression that workers earning less than $151,164 annually usually don't have noncompetes anyway? Sounds like a lot of people will get bucketed into "senior executives" group. At least new noncompetes can't be created.

Re: FTC announces rule banning noncompetes

#187

Post by cryptonector » Tue, Apr 23, 2024, 8:46 PM UTC

jbullock35 wrote: post #141

kevstev wrote: post #43

Earlier quoted context omitted.

I was subject to one as well, but it was just on my base, not total comp, which was not the majority of my compensation. And while my base was fine, it was more or less explicitly stated that this was meant to make it painful for employees to leave and had almost zero to do with any special information the employee had.

I'm not sure that I understand. What does it mean for a noncompete to apply only to base compensation? Is the idea that if you join a competing company within X months of leaving your old company, you need to repay your base salary to the old company?

It means that GP was paid their salary for the non-compete time. In finance it is common for total compensation to be the salary plus a "bonus" of 100% of salary in normal years + any performance bonus. This means that if you had a non-compete in the finance industry and you left your employer for a competitor, then your previous employer could pay you your salary (meaning 50% of your usual compensation) to not work for that competitor for a year.

(These numbers are typical of finance industry compensation and non-compete terms.)

Re: FTC announces rule banning noncompetes

#188

Post by lamontcg » Tue, Apr 23, 2024, 8:47 PM UTC

fidotron wrote: post #12

> Under the final rule, existing noncompetes for senior executives can remain in force. Employers, however, are prohibited from entering into or enforcing new noncompetes with senior executives. The final rule defines senior executives as workers earning more than $151,164 annually and who are in policy-making positions. Lot's of devs will be surprised to discover they are in policy making positions.

I suspect that "policy-making positions" is a term of art that is more narrowly defined than it looks and that it'll actually be difficult or impossible to abuse it enough to made it apply to SWEs. Most likely big 4 accounting firms have a definition of what that means and it is part of accounting and auditing standards. At any rate they'd need to first abuse it to apply to managers who are below VP levels.

Re: FTC announces rule banning noncompetes

#189

Post by 93po » Tue, Apr 23, 2024, 8:47 PM UTC

0xbadcafebee wrote: post #169

Shorel wrote: post #105

Can they also ban tipping culture?

Tipping culture stays because consumers don't want to pay what the product is worth. You reduce salaries and suddenly the food looks cheaper, and the "tip" is what they took out of the salaries. When restaurants end tipping, consumers revolt at the real prices.

most of the rest of the world where tipping isn't the norm isn't revolting at real prices

Re: FTC announces rule banning noncompetes

#190

Post by blackeyeblitzar » Tue, Apr 23, 2024, 8:48 PM UTC

Although I agree with noncompetes going away or being limited, I don’t feel good about agencies making broad changes that feel like they should be the outcome of a legislative process. I wonder if this will be challenged.

Also - what happens in situation where someone is leaving one company to work for a direct competitor? How do noncompetes function there to prevent sharing of confidential information or trade secrets that will help the competitor?