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Noncompete Clauses: Signing Away the Right to Get a New Job

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Re: Noncompete Clauses: Signing Away the Right to Get a New Job

#381
post #242

Earlier quoted context omitted.

I sympathize with what you're saying. But if this were truly such a problem, wouldn't you expect jurisdictions that enforce non-competes to have a more robust startup ecosystem than jurisdictions that don't?

The point I am trying to make is that there are valid reasons to have non-competes that aren't just trying to handcuff employees as that is the standard way of thinking in this thread. Whether or not they could practically be used for them is a different question.

I do agree there are situations in which a non-compete could have value not only to a particular employer, but to the overall economy.

The problems are:

1) Even in those situations, does the societal value outweigh the harm to the employees who suffer under the weight of the non-compete?

2) Even if the answer to #1 is yes, is there a way to narrowly craft law that allows non-competes in that very narrow situation without the collateral damage of other employers foisting non-competes on employees in non-analogous situations?

On #2, my guess is the answer is no. We have bright-line rules for good reason - because without them, it is easy for an employer to get around them. They are a blunt instrument, but they work. A lot of labor laws are like this.

And remember, the situation you were concerned about - the small startup vs. big company situation where the startup cannot enforce its trade secret rights because of costs of enforcement - would end up being turned into an analogous situation in the employee vs. big employer context if we allowed more non-competes to be enforceable. Maybe the employee's legal position would be correct, but try going up against a big employer in a legal battle to fend off enforcement of such rights.

Maybe instead of playing around with rules around non-competes, we should be focusing on providing a greater ability for small companies to enforce IP laws? For example, better attorney-fee shifting provisions?

Re: Noncompete Clauses: Signing Away the Right to Get a New Job

#382
post #147

Earlier quoted context omitted.

One thing about EU vs US comparisons: EU is not a monolith, it is an organization with 28 different member countries. Some of EU members are on the same level as US (e.g. GDP per capita is $51k for Netherlands, $48k Germany), and then there are poor, post-communist countries like Romania and Bulgaria which have GDP of $20k, which brings EU average down. Same goes for unemployment: Germany -> 3.9%, Netherlands -> 5.1%…

The USA is likewise not that monolithic. More so than Europe, for sure. But still.

+1 true. I only grouped EU together for simplicity. It also makes sense since they, by their own political and economic admission, are a unified trade bloc and should share some responsibility for EU-wide economic indicators.

Re: Noncompete Clauses: Signing Away the Right to Get a New Job

#383

My last company's noncompete had a really nice twist: Instead of banning me from seeking employment at a competitor altogether, it instead granted my employer the right, to, at their discretion, compel me to delay starting at a competitor for a certain amount of time. However, in order to do so they would also have to pay my salary over that period.

That's known as "garden leave". Very fair way to implement a non-compete.

Re: Noncompete Clauses: Signing Away the Right to Get a New Job

#384
post #376

Earlier quoted context omitted.

>Plenty of people starve in the US. That statement is laughably ridiculous. Can you provide examples, aside from people with eating disorders?

You are either being obstinate, or are comically naive. Not everyone who disagrees with your apparent "libertarianism with zero exceptions" philosophy is a freedom-hating communist, and your position is indefensible if you are too myopic to even consider some of the very real edge cases where it falls on its face. Get off your high horse.

>You are either being obstinate, or are comically naive.

Perhaps you can show me some evidence to support the ridiculous statement that "plenty of people starve in the US."

Re: Noncompete Clauses: Signing Away the Right to Get a New Job

#385

Earlier quoted context omitted.

>Do you know what a power imbalance is? Yes. >You think having your life controlled by a corporation is a sign of a free society? When it comes to me signing a contract that some corporation would like me to sign, I have complete, inviolable power to NOT sign it. The power over my signature is 100% mine.

What if you need that job to make ends meet?

>What if you need that job to make ends meet?

Then perhaps you should be grateful enough to the company that is saving your bacon that you don't willfully violate contracts you signed with them.

Re: Noncompete Clauses: Signing Away the Right to Get a New Job

#386
post #381

Earlier quoted context omitted.

The point I am trying to make is that there are valid reasons to have non-competes that aren't just trying to handcuff employees as that is the standard way of thinking in this thread. Whether or not they could practically be used for them is a different question.

I do agree there are situations in which a non-compete could have value not only to a particular employer, but to the overall economy. The problems are: 1) Even in those situations, does the societal value outweigh the harm to the employees who suffer under the weight of the non-compete? 2) Even if the answer to #1 is yes, is there a way to narrowly craft law that allows non-competes in that very narrow situation wit…

All good thoughts.

I think it's part of the ongoing David vs Goliath problem. My worry though is that it's last call for small companies being able to compete and grow.

Re: Noncompete Clauses: Signing Away the Right to Get a New Job

#387

Earlier quoted context omitted.

I agree entirely. Student debt and healthcare have evolved to be a means of keeping people trapped in industry. After dealing with health care in other countries, I wrote a post on what I found returning to America: http://fightthefuture.org/article/returning-to-america-and-t... America wants you to work. Work work work work work. Our European neighbours can save up and take a few months off every few years and not h…

To be fair, Americans work. Work work work work[1]. Americans love work and elect politicians who love work. Europeans hate work. Hate hate hate hate[2]. They hate work and elect politicians who also hate work. That major (cultural? economic? social? political?) difference between American and European attitudes towards work might explain these statistics: American vs EU unemployment rate: 4.7% vs 8.2% American vs EU…

No one in my American family prefers to work. For many of them they have no choice. The job is a job -- not a career or a calling. It is simply what pays the bills and keeps the kids feed.

For many of them, the job is very physically demanding and the body starts failing apart at age 40 (construction, health care).

Re: Noncompete Clauses: Signing Away the Right to Get a New Job

#388
post #269

Earlier quoted context omitted.

Isn't there usually a clause at the end stating that even if some parts are unenforceable, the rest of the contract still holds?

Yes, typically, there is a 'severability' clause that encodes that.

Wouldn't that clause be voided too?

Re: Noncompete Clauses: Signing Away the Right to Get a New Job

#389

Earlier quoted context omitted.

Yes, typically, there is a 'severability' clause that encodes that.

Wouldn't that clause be voided too?

The severability clause is what keeps illegal clauses from invalidating the whole contract.

Re: Noncompete Clauses: Signing Away the Right to Get a New Job

#390

Earlier quoted context omitted.

This suggestion is mainly directed at newcomers to the industry, who may not have the reputation or experience to be able to credibly push back on many points of their employment agreement. Once you're in a seller's market for your level of skill (as I'm sure you are), you don't need this advice anymore and I'd encourage you not to let your employer restrict your moonlight projects. But particularly if it's your firs…

It depends on the state. In California, for example, Non-completes are notoriously unenforceable. I'll sign whatever illegal documents you want me to sign, knowning that they don't matter. You might respond by saying something like "what if they go after you anyway, even though it is unenforceable.". But the problem is that they could just do that anyway, illegal contract or not.

Be careful. You might have trouble if you later move to another state and keep your job. Or if California changes its rules.
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