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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

#71

Post by etjossem »

stale2002 wrote: post #70
etjossem wrote: post #35

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.

> But the problem is that they could just do that anyway, illegal contract or not.

The difference is that with an illegal contract, your future employer might actually believe it's more headache than it's worth to fight. I would err on the side of casually striking it out of the employment contract, simply saying "this part of the standard document doesn't apply in our state" etc.

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

#72

Post by __derek__ »

ScottBurson wrote: post #64
valuearb wrote: post #3

"California law prohibits noncompete clauses, contributing to the inveterate poaching with which the state’s technology industry was founded. It can be brutal for employers, but it helps raise wages and has created a situation where any company looking to hire a bunch of engineers in a hurry, be it an established giant or a start-up, feels it should locate there."

Noncompete enforceability is, to me, a very interesting example of how individuals pursuing their own self-interest leads to a bad outcome for everyone -- a classic Tragedy of the Commons. In a state that allows noncompetes, it's in pretty much every employer's interest to use them and enforce them as much as they can; and yet over the long run, their doing that strangles the economy -- not fatally, but enough so tha…

> In a state that allows noncompetes, it's in pretty much every employer's interest to use them and enforce them as much as they can

If I may nitpick, I'd argue that it only appears to be in employers' best interest to use/enforce them, in the same way that the butts-in-seats/time-in-office metrics are used to gauge performance. It makes sense in a first-pass estimation but breaks down when one considers the cultural impacts. People tend to dislike feeling powerless, which is exactly the effect of non-competes.

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

#73

Post by ScottBurson »

_red wrote: post #40
RcouF1uZ4gsC wrote: post #8

Using "poaching" to describe a company hiring someone from another company, needs to die. Companies do not own people. It is strictly a business relationship. I think that the US as a whole should follow California in outlawing non-competes. It definitely has been shown to be workable.

Agreed with the silly use of the name 'poaching'. But how exactly is the state preventing two people voluntarily entering into a contract a good thing? Its pointless anyway, a first year law student will just rewrite as non-circumvent + no-solicit + NDA agreements.

> But how exactly is the state preventing two people voluntarily entering into a contract a good thing?

Because those voluntary contracts affect the economy as a whole. By preventing the worker from making use of even their non-proprietary general knowledge, they make the economy less efficient -- especially so when it comes to the formation of new ventures.

And empirically, prohibiting noncompetes works. I understand that California, if we were a separate country, would have the world's seventh (or sixth?) largest economy. I certainly would be very hesitant to accept a job offer in any other state. (Well, someone posted upthread that North Dakota and Oklahoma also prohibit noncompetes, but I don't think I want to live in either of those places, for other reasons.)

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

#74

Post by rdiddly »

This prompted me to look at my employee agreement. Sure enough, there it is. I signed it because I needed the job and wasn't asking too many questions.

But this is interesting, I work in an area of the company that isn't really part of their core competency. Meaning that the kinds of firms that would hire me are literally in another sector and wouldn't be considered competitors.

So this fact, that normally manifests as complaints that "management has no idea what we do here" and/or that they "have no business claiming they're in this business," ends up helping me out.

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

#75

Post by ransom1538 »

etjossem wrote: post #9

Worth remembering, especially for those just entering the software field: by the time a potential employer gives you an employment agreement to sign, they've already decided they want you. At that point, it's on them to give you a palatable offer. They may include a noncompete clause for one of two reasons: 1) to prevent you from working somewhere else at the same time, which can create all sorts of conflicts of inte…

Laughable unenforceable in CA. Basically equivalent to toilet paper for the employer in CA.

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

#76

Post by matt4077 »

SimbaOnSteroids wrote: post #14
watertom wrote: post #12

Health insurance is also part of the rigged labor market. The only reason big companies offer health insurance is because it limits employees's freedom. It would be easy for the Fortune 100 or 200 in unison agree to eliminate health care and provide a higher salaries. It would make the companies more competitive globally and it would free them from a whole lot of other nonsense, but they don't drop healthcare. The re…

The other thing is, and i don't disagree it limits freedom btw, but if you're not in a pool of other people shopping for healthcare you have no bargaining power.

10 tries at an answer, and you got closest to reality:

Employment creates a 'risk pool', specifically one that people are unlikely to join just to get insurance. It is one of very few ways to mitigate the "adverse selection" problem, i. e. only old and/or sick people getting insurance, thereby raising prices, and repeat. The other way is an insurance mandate, or, if you want to cut the chase, single-payer tax-funded healthcare for all.

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

#77

Post by kentt »

kstenerud wrote: post #56
bmmayer1 wrote: post #50

Earlier quoted context omitted.

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…

That's strange... I spent 6 years living and working in America and I never met anyone who loved work, with the exception of some founders, perhaps.

I get that people don't love work in America in the way you're saying. I think the idea is that in America you're less likely to get a positive reaction to things such as you're the man and the primary breadwinner:

- You opt to cut your hours from 45-30 and live on less - You take a few months vacation - You take a year paternity leave

I know from experience that those can seem irresponsible to many.

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

#78

Post by postfacto »

If you're going to violate a noncompete, don't tell anyone you're going to work for a competitor. Keep yourself as small of a target as possible for your former competitor's legal team.

- When you quit, tell your now former employer that you're quitting to pursue something other than what was your established industry. Your (made up) lifelong dream of starting your own microbrew brand, Macrome supply business, winery, whatever. Or looking after a sick relative, or going back to school full time, etc.

- Cut off ties with all your former coworkers, at least for the noncompete duration. If you bump into them at the grocery store and you can't get away from them, tell them about how wonderful the beer business is or how your relative is doing.

- Don't put on Facebook or Linkedin that you work for the new employer.

- For the duration of the non-compete, only those closest to you who critically need to know about your new employer, spouse, etc will know.

- Avoid publicly-facing industry related activities that tie you to your new employer for the duration of the noncompete. Giving speeches, presentations, writing article, etc.

None of these are foolproof but they are all common sense. Remember the Monty Python sketch about How To Not Be Seen.

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

#79

Post by icelancer »

ransom1538 wrote: post #75
etjossem wrote: post #9

Worth remembering, especially for those just entering the software field: by the time a potential employer gives you an employment agreement to sign, they've already decided they want you. At that point, it's on them to give you a palatable offer. They may include a noncompete clause for one of two reasons: 1) to prevent you from working somewhere else at the same time, which can create all sorts of conflicts of inte…

Laughable unenforceable in CA. Basically equivalent to toilet paper for the employer in CA.

You still don't want to deal with even a nonsensical court date if you can avoid it with 5 minutes of redlining.

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

#80

Post by AlexCoventry »

quizotic wrote: post #68

In the early 1990s, I'd co-founded an object database company, with a standard "east-coast-style" non-compete, which among other things, granted us injunctive releif. Our top developer left to work for our main competitor. We sued, and the courts ruled basically that there is no slavery in the US and our developer had every right to earn a living doing what he knew how to do. Maybe laws have changed, and maybe it var…

They're enforceable in MA.

http://www.shpclaw.com/Schwartz-Resources/massachusetts-cour...

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