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FTC announces rule banning noncompetes

ftc.gov

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Re: FTC announces rule banning noncompetes

#221

Post by kube-system »

whitej125 wrote: post #39

Does this change a lot for many people? This doesn't mean you can scurry off a just build a competing product/service to your existing employer. You probably also have NDA and/or IP agreements too. > The Commission found that employers have several alternatives to noncompetes that still enable firms to protect their investments without having to enforce a noncompete. > Trade secret laws and non-disclosure agreements…

Noncompete clauses have often been used by employers to scare their employees into thinking they'll be sued just for simply finding a new job at a different company.

Re: FTC announces rule banning noncompetes

#222

Post by bluGill »

o_nate wrote: post #155
jbullock35 wrote: post #141

Earlier quoted context omitted.

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?

No, it just means that during the period after you stop working at the old job but before you can start working at the new job, you are paid only your base. This can be a significant reduction in total comp in industries such as finance.

I have worked jobs where the best bonus over 5 years was $500, while the typical year all we got was a promise that if things go well there will be a bonus. I've worked other jobs where the worst bonus was $15000 (a really bad year for the company), and could be up to $50,000. This is as a regular engineer, management can get a lot more. The first company taught me at until the money is in my account the bonus is meaningless. The second taught me that they aren't just a rumor. Most companies don't even pretend to offer a bonus which is acceptable - at least I know what I will make.

I think everyone should make 2-3x the poverty level income (we can debate exact numbers), and everything after that is bonus. So long as the company pays a bonus most years it means in a bad year you have enough to live on and don't need to find a new job, while in a good year you have a nice bonus to buy nice toys.

Re: FTC announces rule banning noncompetes

#223

Post by _akhe »

benced wrote: post #30

I suspect this is bad for California, its lack of noncompetes was a huge differentiation for a while. (how bad? I don't know.)

It's not bad when people are copying you, it signals that California is ahead of the curve on the issue and - upon further examination - others too like decriminalization of cannabis including removing it from background checks and drug testing for most employment, as well as certain tenant and landlord rights other states don't have.

Some of those non-competes were ridiculous with their "in perpetuity throughout the ends of the Universe" type wordplay, I'm surprised governments haven't been more vigilant on things like the stifling of entrepreneurial mobility, since it only helps their economies in the long run to do so.

Make it possible to disrupt, design economies for entrepreneurs as much as for corporations, and reap the benefits IMO. Let those big evil uglies get disrupted if they can't stay relevant or retain top talent.

Re: FTC announces rule banning noncompetes

#224

Post by cratermoon »

LeifCarrotson wrote: post #59

Full 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…

They do stifle innovation when one company locks up a huge portfolio of them. Forcing the employees who came up with the patentable ideas to sign non-compete agreements prevents them from working on anything related to those inventions elsewhere.

Re: FTC announces rule banning noncompetes

#225

Post by grubbypaw »

londons_explore wrote: post #176

It 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...

No. It explicitly does not do that.

"The Commission declines to extend the reach of the final rule to restraints on concurrent employment. Although several commenters raised this issue, the evidentiary record before the Commission at this time principally relates to post-employment restraints, not concurrent employment restraints. The fact that the Commission is not covering concurrent-employment restraints in this final rule does not represent a finding or determination as to whether these terms are beneficial or harmful to competition. The Commission relatedly clarifies that fixed-duration employment contracts, i.e., contracts between employers and workers whereby a worker agrees to remain employed with an employer for a fixed term and the employer agrees to employ the worker for that period, are not non-compete clauses under the final rule because they do not restrain post-employment conduct."

Re: FTC announces rule banning noncompetes

#226

Post by ZeWaka »

lotsofpulp wrote: post #75
nerpderp82 wrote: post #45

Earlier quoted context omitted.

Total aside, but I think it is ridiculous that CoC larps as a quasi governmental organization. When in actuality it is a Union of Capitalists.

I don’t get that appearance. Their website does not end in .gov and their about page does not indicate they are an official agency: https://www.uschamber.com/about

I think people get that idea due to most cities also having chambers of commerce with lots of influence, sponsoring and hosting events and such.

Re: FTC announces rule banning noncompetes

#227

Post by no_wizard »

j-cheong wrote: post #186
MattSteelblade wrote: post #25

Earlier quoted context omitted.

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.

Non competes are everywhere. Famous case with Prudential Security[0] where they had everyone sign non competes, that includes minimum wage workers, and they enforced them, which put an outsized strain on the minimum wage workers in particular.

Its a harmful practice across the board.

[0]: https://www.cbsnews.com/news/noncompete-agreement-feds-sue-3...

Re: FTC announces rule banning noncompetes

#228

Post by no_wizard »

kube-system wrote: post #207
j-cheong wrote: post #186

Earlier quoted context omitted.

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.

I've know places that pay 1/3 of that and have noncompetes. Although, someone in this type of a role can often get away with ignoring noncompetes as long as they're smart about how they exit.

>Although, someone in this type of a role can often get away with ignoring noncompetes as long as they're smart about how they exit.

Simply put though, they shouldn't have to.

Re: FTC announces rule banning noncompetes

#229

Post by yyhhsj0521 »

cjen wrote: post #24

This seems incredibly important. I know non-compete rules personally held me back at a previous tech job. I'm interested to see how this hits finance firms – I know people who were forced to take a year off between jobs (although they were compensated the whole time). Always thought that would be a pretty sweet deal.

I am currently on one of those deals by working for an HFT, then taking a competitor's offer. It is really very nice. From a wealth-accumulation POV, I am losing out a lot of earning each month I'm not working, but I am still paid a very cushy six-figure salary that covers a comfortable lifestyle for my family plus decent savings. I value my time at prime working age much more than the net worth I potentially lost. I have been able to travel, hone hobbies, start and finish personal projects, just help out my wife, and much more. Honestly I don't want it to end.

Re: FTC announces rule banning noncompetes

#230

Post by macintux »

cryptonector wrote: post #214
runako wrote: post #210

Earlier quoted context omitted.

> it's a reaction to Federal Agencies — unelected governmental representatives — unilaterally making their own rules out of the gray areas. Eliminating Chevron will trade "unelected governmental representatives" who work at Federal Agencies like the FTC with "unelected governmental representatives" who are work for Federal Agencies that are the US Courts. Progress?

> Eliminating Chevron will trade "unelected governmental representatives" who work at e.g. the FTC with "unelected governmental representatives" who are paid by the US Court system. Progress? Where do you get that from? Reversing Chevron will mean that Congress will have to work harder to get the regulations that it and the Executive want. If Congress were not disfunctional that would be a very good thing. And heck,…

Republicans originally celebrated Chevron because it took regulations out of the courts' hands.
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