[HN Gopher] Laws barring noncompete clauses spreading ___________________________________________________________________ Laws barring noncompete clauses spreading Author : hhs Score : 226 points Date : 2022-11-01 19:09 UTC (3 hours ago) (HTM) web link (www.businessinsurance.com) (TXT) w3m dump (www.businessinsurance.com) | Waterluvian wrote: | Years ago I had a former CEO throw a ridiculous tantrum over me | leaving to work for a different company in an adjacent industry. | He emailed me demanding I quit my job. | | A quick review with a lawyer that the non-compete is | unenforceable in my province and a nastygram sent by my lawyer, | and he took his tantrum elsewhere. | | The problem is that so many people, including some I know, get | scared at the prospect of legal action that they fold, letting | bully CEOs win. | | These laws will help. | site-packages1 wrote: | What's the enforcement for these anyways, when a company insists | on enforcement? "Cease working for your new employer or else"? | jyu wrote: | noncompete clauses are good if you actually get compensation for | not working at a competitor. e.g. firms paying you a decent | salary for ~2 years after your employment is over. signing a | blanket noncompete without compensation is the problem. | mbostleman wrote: | My personal experience with non-compete is something that was | being purchased from me by my employer as part of a severance | package. Does this mean that that ability for me and my employer | to make those deals is removed? | yellowapple wrote: | > Colorado employers have expressed frustration with the new law, | said Carrie Hoffman, a partner with Foley & Lardner LLP in | Dallas. "Nobody likes being told when they're about to hire | someone" that that person does not make enough to be eligible for | a noncompete, she said. | | Pay up or shut up. It's that fucking simple, and these abusive | employers should not only be grateful that these clauses haven't | been outlawed outright (as they should be), but also grateful | that there's an earnings cap at all, let alone one that's low | enough to exclude large swaths of the professional workforce. | [deleted] | anttisalmela wrote: | Finland is currently transitioning to a system where employer | must compensate for the time employee is restricted, and all | previously agreed contracts must be either terminated before this | year ends or employee will get paid for the time according to the | new law - 40% of the salary if restriction is for less than six | months, 60% if more than six months. | mkl95 wrote: | My current contract has a lot of oddly specific noncompete stuff. | Fortunately those clauses are mostly non enforceable in my | country, unless your former employer still pays you a bunch of | money every month. Those clauses are there to please investors. | loceng wrote: | Isn't this ethos similar to being counter to monopolistic | patents? | | Could this trend lead to the abolishment of patents - and perhaps | should an effort be made to help people understand the | comparison? | julienreszka wrote: | I don't think this is comparable. | weberer wrote: | Lol, no. | blep_ wrote: | > and perhaps should an effort be made to help people | understand the comparison? | | I would recommend that, because the connection isn't obvious to | me. | matsemann wrote: | Where I live (Norway), these laws came thanks to unions. When I | graduated, all developer jobs I was offered had a noncompete | clause in the contract. These were wide and potentially career- | altering if enforced, barring you from doing basically any kind | of work for long stretches of time. All companies when pushed | basically said "ohh, we seldom enforce them, only for upper | management", but still they insisted on them being there. | | Luckily my union, Tekna, helped squish most of these in 2015. | They can no longer be general, they have to name specific | companies and areas you can't work for if you ask. And pay full | salary while enforced. So now they're basically non-existent for | individual contributors / devs, except for maybe naming the main | competitor if you work for a niche company. | shadowgovt wrote: | I had a chance to visit Norway recently, and this was something | that a tour guide impressed upon us about the culture; she gave | an example of a restaurant in town that was caught skimming | pay, and it wasn't just a union representing restaurant workers | they heard from; they found themselves unable to find someone | to repair plumbing or their storefront (the plumbers and | glaziers wouldn't work with them), and their ingredient supply | chain suffered (truck drivers told them to make their own 3AM | trip to stock up). | neon_electro wrote: | https://en.wikipedia.org/wiki/Solidarity | whimsicalism wrote: | This also happens in the US, it just isn't reported on | heavily by the media. | | When the dining workers at my university in the US were | campaigning for a contract, teamsters blocked most truck | deliveries to the university | yamtaddle wrote: | Labor action generally is barely reported on in the US. You | have to go to far-left media like Democracy Now to hear | about most of it. People who don't seek that out could be | forgiven for thinking unions in the US almost never do | anything at all. | whimsicalism wrote: | It's worth noting also that this sort of "secondary | strike" approach is explicitly illegal in the United | States. | bonestamp2 wrote: | > And pay full salary while enforced. | | That's a good clause, that will basically eliminate them. It | makes sense from the government's standpoint, they don't want | anything that restricts people's income because that restricts | their (tax) income too. | whimsicalism wrote: | > that will basically eliminate them | | in NYC, it doesn't seem to stop quant firms. they have a term | for it, although I forget what. | [deleted] | [deleted] | renewiltord wrote: | Garden leave | tomesco wrote: | Gardening leave. | joebob42 wrote: | But if they're willing to pay it, it seems like it probably | means this is a real issue rather than just a way to punish | employees who leave, and it seems like they're reasonably | compensating employees for the problem. | whimsicalism wrote: | i think they are probably slightly disincentivizing | leaving if they are only paying base salary. | | someone who knows more will have to chime in, i didn't | even remember this was called gardening leave | joebob42 wrote: | Yeah, that's fair, if I only got base salary I'd be | pretty strongly disincentivized to take such a deal. | drogus wrote: | In Germany in order for a non-compete agreement to be valid a | company has to pay an employee money for the non-compete period. | 50% of an average of last 3 months of employment. With this law I | would be actually quite happy for a company to include a non- | compete clause in the contract. | hjeutysd wrote: | The existence of non-competes doesn't surprise me and I'm OK with | companies being allowed to require them. _But_ what shocks me is | that companies do not offer commensurate severance packages. If | you have a 12-month non-compete, then you 'd better pay 12 months | of total compensation as severance. Over the past year, I did 3 | intense long interview loops and declined 2 offers and accepted | the third (a FAANG where I work now). The first two places had me | jumping through hoops - take home assessments, tricky behavioral | interviews, intense live coding, etc., amounting to like 10+ | interview rounds spent evaluating me before making an offer. At | the offer stage I politely mentioned that the offer letter | included an X-month non-compete agreement and I was only able to | consider signing if the doc was amended to also include an | X-month severance package with clear terms on "just cause" | firings (when severance is exempted) and "good reason" quitting | (when severance is owed even if I quit, very common in cases | where 'just cause' is included), or, I offered, the non-compete | can just be removed (one of the two firms already had its main | presence in California but I live on the east coast where this | role was based ... but still, why a company already complying | with laws banning non-competes for 90% of their workforce feels a | need to include it for east coast employees is just beyond me). | | Of course, they both completely balked at this and we could not | move forward so I declined both offers. The third company had a | non-compete initially but removed it as soon as I asked - it was | completely pedestrian. | | It's an indication of crazy entitlement on behalf of employers | that they think workers should give away *for free* significant | rights (like, uh, getting a new job quickly after a layoff, in | your field of expertise). These rights are clearly not | compensated as part of your base compensation from a job offer | and any employee would be crazy to agree to those terms without | severance protection. It just communicates bizarre entitlement | and unprofessionalism. I hope more candidates will wise up to | this and require severance packages or else decline the offers. | chaostheory wrote: | This is one of SF Bay Area's (and California's) largest | advantages. It's one of the reasons why so many companies are | formed and thrive here | | This is a great development for many of these new areas, but a | bad one for California since it loses one of its edges | brindlejim wrote: | Banning non-competes is a great idea. | | However, everyone here should be aware that lots of startups are | now including "power of attorney" clauses in their employment | contracts that grant to the employer power of attorney to assign | inventions to themselves. Feels like there's a lot of room for | abuse, which could discourage moves to competitors. | andirk wrote: | Am I the only one who doesn't add any inventions and doesn't care | about a non-compete clause because I will never honor it and come | at me bro if you want to try to enforce it? | | I respect making sure the company doesn't steal someone's | previous IP and I respect a company guarding their own IP. But I | also respect that a person can work wherever the f they want | without a previous company having any say. | mywittyname wrote: | > and come at me bro if you want to try to enforce it? | | I spoke to an employment lawyer who told me in pretty clear | terms: the company can come after you to enforce one if they | like; it's a tossup as to whether or not it will be upheld; and | regardless, it will cost a pretty penny to fight. | | I'd personally would not want to have that hanging over my | head. | paxys wrote: | You're not the only one, but this kind of "I'm a sovereign | citizen!" defense also won't hold up in court for a second if | the company actually wants to come after you. | | The vast majority of people don't run into such issues simply | because they aren't important enough and/or haven't produced | anything of value to waste a lawyer's time over. | andirk wrote: | My Attorney General and my state fully agree with me in no | uncertain terms thanks [0]. Feel free to add all those "we're | not responsible at all!" clauses that ski resorts add which are | also not enforceable. Thanks for the downvotes. | | [0] https://oag.ca.gov/news/press-releases/attorney-general- | bont... | yellowapple wrote: | I just list my GitHub/Bitbucket/Sourcehut/etc. user pages and | my website and say "everything listed at these URLs". I've yet | to get any complaints about that. | ptudan wrote: | Makes a ton of sense. Completely absurd for security guards and | administrative assistants to have non-compete clauses. Just | another way businesses were trying to reduce the willingness of | employees to quit so that they can suppress wages. | jasonwatkinspdx wrote: | Believe it or not they're now being used for fast food | employees. | DebtDeflation wrote: | It jumped the shark a few years back when Jimmy Johns tried to | force their "sandwich artists" to sign non-competes. | Sohcahtoa82 wrote: | Does JJ refer to their employees as sandwich artists too? I | thought that was just a Subway thing. | | But yeah, beyond ridiculous, as if a JJ employee is going to | leak some crazy trade secret to Subway or whoever. | munk-a wrote: | I assume the "sandwich artist" title is an allusion to that | old saying - y'know because they pay their employees so | little that they're starving. | aliqot wrote: | Everyone knows you spread mustard from right to left. We | aren't knaves. | justinpombrio wrote: | That's the most hilarious double speak. I can only imagine | the repressed artists getting told off for putting 5 slices | of cheese on a foot-long instead of 4. "I was just trying | to express myself, you said I was an artist." | [deleted] | lazide wrote: | Admin assistants (like actual admin assistants) usually have | access to full customer contact lists, and exposure to rather | intimate details of the business and executives lives. | | They're definitely not comparable to security guards in that | sense. | ChrisMarshallNY wrote: | There are already laws against taking trade | secrets/proprietary information, and using it elsewhere. | | You go to jail for that. It's called "theft." | | My company had us sign a _ridiculous_ NCA. It pretty much | made it impossible to get a job _anywhere_ , after leaving | the company; even if they fired you, or laid you off. | | Their description of a "competitor" was so vague, that it | could, literally, be applied to a 7-11, as they potentially | sold peripherals that could be plugged into our devices. | jaxn wrote: | Every admin assistant should be under an NDA / | Confidentiality agreement. Same for personal security. But | those are not non-competes. | noasaservice wrote: | If they're that important, then the company should pay a | significant percentage of their pay to keep them from doing | their profession, or GTFO. | toomuchtodo wrote: | This is not enough of an excuse to encumber someone from | earning a living elsewhere. | | > "Employers need to get creative about how to impose | restrictions to protect themselves against individuals" in | whom they have made significant investments, or who have been | allowed access to trade secrets, to protect themselves | against such employees leaving, said Maxwell N. Shaffer, a | partner with Holland & Knight LLP in Denver. | | The sort of healthy employee-employer relationship that | retains talent. | lazide wrote: | What is being banned are non-competes that don't pay | someone to not compete. | | There are legitimate reasons for actual non-competes in | many of these cases, and CAlifornia for instance just | requires you pay them for it. | | Which in such a situation seems justified. | toomuchtodo wrote: | I agree. If you want to pay someone to sit on the bench | because that has value to you ("Garden Leave"), I support | that. If you want to twist their arm because you have | power as an employer, nope. That's what labor law and | regulation are for. | | Lots of examples of malicious employers doing the latter, | as you'll note the sentiment throughout the thread | comments and laws intending to patch this bug in statute. | prirun wrote: | > What is being banned are non-competes that don't pay | someone to not compete. | | Employers will just say "the no-compete compensations is | built in to your pay". | lovich wrote: | They can say anything, but the behavior has gotten enough | voter anger to make politicians view this as something to | regulate, so their opinion on the matter is quickly going | to lose any weight | lazide wrote: | Which is what is banned in California. If someone wants | an enforceable non-compete, they need to pay them | (fairly) for the time they're not allowed to compete. | ec109685 wrote: | There are already laws against Admin assistants from taking | full customer contact lists from one job to another. You | don't need non-competes to enforce that. | lazide wrote: | Really, which laws are those? | | The only ones I'm aware of would be trade secret laws, but | they're dubiously applicable to bare customer contact | lists. | | You can make contractual restrictions of course (company | property), but good luck being able to prove they actually | took it unless they're _really_ dumb. Merely contacting | all, or many, customers for instance wouldn't prove it. | | Being able to show they work for competitor x is easy, | however, as is showing they're pursuing customers in the | same space. | jahewson wrote: | lol, no. Confidential business information is an area | heavily protected by law. Customer lists are the | canonical example. | | It's much easier to win this kind of civil suit than a | criminal case. The court can absolutely crush a business | that is founded in this manner to compensate the former | employer. | JackFr wrote: | Then why didn't Dunder Mifflin sue the Michael Scott | Paper Company? | dpkirchner wrote: | Because they didn't reach out to the very real lawyers at | Boston Legal. | lovich wrote: | Assuming you were asking seriously, its a comedy show | that was not trying to accurately portray how businesses | run. | JackFr wrote: | Really? | lazide wrote: | Then surely you'll have no issues providing a cite of the | relevant criminal code? | hedora wrote: | Specifically, you can't take trade secrets from one | employer to the next. Customer contact lists are just one | example of this. | lazide wrote: | Trade secrets have a very specific definition, and a mere | list of contact information that is already likely public | in an unfocused way (aka contact lists) almost certainly | doesn't qualify. Neither would a list of company names, | etc. | | That information however _IS_ highly valuable, especially | paired with knowledge of how a company is doing sales, | how it is positioning itself internally strategy wise, | etc. some of those things could be trade secrets, if | adequately protected, but almost no one I know would meet | such a bar with how they handle it. It would be at most | confidential information, and could count as a NDA | violation, but would be difficult to prove unless someone | was really sloppy. | DiggyJohnson wrote: | The idea of a client or customer list being public | information is profoundly ludicrous. It's the canonical | example, as another commenter put it. | bhaney wrote: | > Nobody likes being told when they're about to hire someone that | that person does not make enough to be eligible for a noncompete | | Am I supposed to feel sorry because a business has to choose | between either paying an employee more, or not restricting what | that employee does after they leave? Let me get my tiny violin. | rdiddly wrote: | Yeah it's a weird thing to say. Nobody likes being told they're | going too fast to be eligible for immunity from speeding | tickets either, and yet they chose what speed to travel in that | jurisdiction didn't they. | | Also the law isn't really about enforcing what people "like," | otherwise you wouldn't need a law. | indymike wrote: | One of the best features of legislating against non-competes is | that an employer can't sue a former employee for violating a non- | compete. Right now, for most occupations in my jurisdiction | (Indiana, USA), non-competes are usually not enforceable, but it | costs $500-$2500 to get these lawsuits thrown out. Some employers | will sue former employees knowing they can't afford a defense, or | just to throw shade on them at their new job. | Natsu wrote: | IMHO, companies should have to compensate the employee for the | period of the non-compete since they're still effectively working | for them. Salary limits are okay, but don't really go far enough. | If they want this it has a value and should be compensated for | fairly. | drogus wrote: | This is how it works in Germany and in some other EU countries. | Companies need to pay 50% of an average of 3 last months salary | in order to enforce a non-compete clause. | debesyla wrote: | Yeah, same in Lithuania. | biomcgary wrote: | I agree. Rather than having legislators get into the weeds of | defining "compete", "trade secrets", "customer poaching", etc., | laws should simply require that enforcing ANY post-employment | terms require the former employer to pay the former employee | the greater of the employee's maximum salary plus 10% (to cover | opportunity cost) or 110% of any offer by a prospective new | employer. Who better than the company to price the value of | what the former employee knows? Maybe cap enforcement to 2-3 | years. | cma wrote: | Why even allow this? Just makes things less competitive and | pays people to be unproductive. | jiggawatts wrote: | My current employer tried to make me sign a noncompete clause | and I asked them for precisely this. | | They were flabbergasted that I wanted compensation in | exchange for essentially cutting myself off from a wide swath | of employment opportunities. | | "Aren't you our slave to do with as we see fit!?" was very | much the attitude that I was getting. | hailwren wrote: | Yep. This is what we do in finance. It sucks a bit because most | of our comp is bonus and you only get your base pay on garden | leave, but I'm shocked this isn't a requirement. | ghaff wrote: | Garden leave isn't a panacea. And in MA it's minimum 50% of | salary. It does make the employer put skin in the game which | is no small thing. But it may end up with someone not being | able to be in a competitive job for a year for maybe 25% of | their prior comp. Not a great situation for a lot of people. | mywittyname wrote: | This would make things interesting. | | I kind of want to see what would happen if states passed laws | saying that all non-compete clauses contained an implicit | agreement that the employee be paid their entire salary | (including bonuses) for the pro-rated duration of the non- | compete and that such clauses can be triggered by either party. | | We all know the value of a non-compete clause is $0 for most | employees. Hell, they are probably most effective at bullying | unproductive workers who hate their jobs into staying on too | long, thus might actually be a net negative for employers. | willcipriano wrote: | The best part would be the rapid "Oh no, we don't need you on | a non-compete anymore" throughout the state the day after the | law passed. All of sudden how to fold sheets the Ramada way | isn't a highly confidential trade secret. | bumby wrote: | > _The best part would be the rapid "Oh no, we don't need | you on a non-compete anymore"_ | | I've witnessed this on the other end. Someone was being | pressured to engage in sales that would violate her non- | compete that was openly discussed during the hiring phase. | When she essentially said, "Sure, I have no problem | breaking it as long as you put it in writing that you'll | cover any legal fees" suddenly the new employer didn't | think sales in that region were quite as important. | CaptainJack wrote: | The UK has had a government call for evidence on the subject of | non-compete, with the aim of limiting them as well, but nothing | has been done so far. | | I'm myself in the long, lengthy and costly process of trying to | fight a two years non-compete (well, 1yr garden leave + 1yr non- | compete), and it's taxing. It adds stress, makes it harder to | market yourself, and on top of that there is this clear asymmetry | where the costs if it was to go to high court (PS150k) would be | huge for you, but petty change for your employer. On top of that, | they'd get to claim these as expenses (so pre-tax), but you | couldn't get any kind of tax-credit (so effectively post-tax). | System is biased, it's about time they would change it. | paxys wrote: | Over the years so many different jurisdictions around the US and | the world have stated their desire to be the "next Silicon | Valley" and have poured an immense amount of money and effort to | make it so, whether in the form of incentives for businesses, tax | breaks, education, job training, or even just straight paying | smart people to move there. Every such scheme has generally | failed because they refused to emulate the one key piece of | California law that is necessary for a startup ecosystem to exist | - banning noncompetes. | | "But I'll spend money to train my employees and they'll just take | those skills to go work for a competitor or start their own | business!" Yes, that's a feature of the system, not a bug. | kennend3 wrote: | Here (Canada) the courts almost always rule that the non- | compete is unenforceable. The core issue is the rights of an | individual to earn a living supersedes the rights of a | corporation. | | https://globalnews.ca/content/8363992/can-non-compete-clause... | | " The majority of non-compete clauses challenged in the | judicial system have been rendered unenforceable. Canadian | courts, in my experience, look unfavourably on clauses that | restrict an individual's ability to use their knowledge and | experience to earn a living." | | What companies here do falls into two general categories: | | 1) attempt to get people to sign and hope they don't know it is | unenforceable. | | 2) pay people to stay at home and not-compete - Given this is | expensive it doesnt happen often. | rileymat2 wrote: | Does banning non competes help if you don't already have | businesses attracted to an area in some critical mass? | | I can see how it could make for a vibrant scene if you already | have incumbents, but if you are an area trying to attract them, | I am not sure that works. | diob wrote: | Right, the idea is to train + pay them well enough that they | stay. It helps the local economy because rather than your | business putting more into investments around the world (or | wherever the rich store / grow their money), that person puts | the money in the local economy. | | Folks understand this, but their pay depends on them not | understanding it so. . . here we are perpetually. | | Funny enough, paying folks well often will pay dividends for | your business in the long run. So long term they would make | more money. | | Humans are unfortunately quite short sighted, which I'm fairly | sure nothing can be done about. We're just fancy animals after | all. | lazide wrote: | I saw first hand a sales guy at a prior company I worked for | start a side business directly competing with the primary | business he was working for in his day job, while still | working with them. Including redirecting customers while | working for them. | | The owner got suspicious due to some comments made by | customers, and started listening in on the phone calls he was | making on the company phone system. | | This was a small business, and it nearly tanked the company, | as the customers were confused as hell, and the 'new' company | wasn't doing well either. She ended up having to fire him, | and sue him, but it took years, and meanwhile he kept | operating. | | He was paid well, but for some people it's never enough. | | I don't care what anyone says, that is shitty criminal | behavior. | moron4hire wrote: | That's basically the one situation in which non-competes | are enforceable in the US. The problem is, most people | don't understand that, and fall prey to companies putting | non-compete clauses into their employment agreements that | say they can't go do CRUD software development at any | company in a 50 mile radius. | vxNsr wrote: | Yup kinda interesting to see this play out. With the federal | trade secrets law tho it no longer matters. | harry8 wrote: | Beyond banning them de-jure you've also got to ban them de- | facto. | | "We all know non-competes are unenforceable and illegal." <- | Absolutely useless if you can end up in court. Using | unenforceable rights as a deterrant is common and potential | future employers get spooked by it even if it is illegal. | "Don't hire Jill, Mary is almost as good and has no non- | compete. Don't want to go to court even if its unenforceable." | | There are no consequences for forcing someone to have the | stress, expense, time and to secure the financing so that if | everything works as it should (which it often doesn't in all | the various legal systems) you get only some of that back. If | it doesn't work as it should you're toast. Not a nice thing to | be hit with when the law is clearly designed that you should | not be hit with anything at all. | | For an individual or a startup it matters. For a large revenue | incumbant they have people employed to abuse the system like | that and the business expense of doing it is trivial, more than | worth it. The law may exist so that the strongest do not always | get their way - but this is an ideal with many exceptions | including this one. | | Ban away, but with no consequences for abuse and all | measurements for the abused being the magnitude of the downside | alone, no upside possible you don't get the result you're | looking for. | | Summary dismissal with costs, compensation and the potential to | be branded a vexatious litigant so it is more difficult to | bring any court action against anyone would be a real | consequence for abusing the rules. Is the best one? Is it fair? | Dunno. What we have now in most countries sure isn't. | vkou wrote: | > Every such scheme has generally failed because they refused | to emulate the one key piece of California law that is | necessary for a startup ecosystem to exist - banning | noncompetes. | | As I look out the window of my Seattle apartment, observing a | literal forest of new construction, sky-rocketing rents and | costs of living, I must interpret the tech boom here as 'the | next Silicon Valley failing', because Washington state has had | a very strong form of non-competes prior to 2020, and a | somewhat strong form of non-competes today. | | Or, maybe I can choose to believe my eyes, and note that the | the presence or absence of non-competes isn't a very important | factor for driving a tech boom. [1] | | It is a popular topic to bikeshed over, though. | | [1] As a sibling poster points out, non-competes are absent in | Canada, and yet nobody can accuse any locale in Canada of being | the next SV... | exabrial wrote: | I think a better system is an up-front repayable bonus: "We'll | pay you $2k on sign-on, but you have to stay for 2 years" or | something. | | This benefits job applicants (extra money!), employers | (retention), and protects applicants (employers abusing non- | compete agreements for everything), and is a far easier legal | process to execute. | bhaney wrote: | This seems like the equivalent of a predatory loan with the | interest paid in opportunity cost, and doesn't even properly | address the same problem that noncompetes do. | shagie wrote: | That's attempting to solve a different problem (employee | retention) than non-competes attempt to address in their | original form. | | For example, how does a company prevent (setting aside the | "should they" debate) an employee from: | | 1) leaving and starting up a consultancy for installing former | employer's software (competing with company professional | services) | | 2) leaving and starting up a new company that is a competitor | to the former company | exabrial wrote: | 1) That would be IP theft, and is already covered by other | laws. | | 2) That is the problem I think this solves: retain your key | employees. Maybe pay them a bit better than that 2% annual | raise. | shagie wrote: | Starting up a consultancy to do installation of your former | employer's software for clients isn't IP theft. If I worked | for Atlassian and then created a company that did | consulting for how to install Jira and and organize | workflows - there's no IP theft involved there. | | Creating a new competitor isn't about retaining employees. | Consider the situation of | https://en.wikipedia.org/wiki/Rose_Blumkin | | > In 1989, six years after selling 90% of her company to | Berkshire Hathaway, Blumkin retired, only to come out of | retirement in three months to open up a rival store. It was | called "Mrs. B's Clearance and Factory Outlet" and was | situated directly across the street from the Furniture | Mart. It became profitable by 1991. Buffett acquired the | business in 1992. Blumkin continued to be involved in day- | to-day operations until shortly before her death at the age | of 104. | | While this case wasn't covered and Buffett certainly | handled it different than the non-compete, but should there | be the ability to prevent that sort of behavior with a non- | compete agreement? | yellowapple wrote: | > If I worked for Atlassian and then created a company | that did consulting for how to install Jira and and | organize workflows - there's no IP theft involved there. | | That also seems like a very silly thing to prohibit in | the first place, since Atlassian's getting paid either | way in that case. | exabrial wrote: | I'm sorry, I misread the parent comment. I thought they | meant recreating the the software, not installing it. | shagie wrote: | I'm thinking more the professional services / support. "I | used to work for $foocorp, pay me $money and I will help | you install your software and support it better than | $foocorp offers." | | Another example is Epic's "not quite a non-compete" is | that they won't release the certificates(?) that an | employee got for supporting their software (as part of | employee training) for a period of time after separating | from the company. I'll admit to being hazy on this but (I | believe) that this is to make it difficult to start a | consultancy for installing health care software right | after leaving as you wouldn't be able to demonstrate the | certificates that you got while working there (and | getting them again is costly). | | Though, if you want an example of "recreate the software" | (though not with IP infringements), look at Dave Hitz and | James Lau from Netapp and that they formerly worked at | Auspex. I'm sure that they dotted all the 'i's and | crossed all the 't's with leaving a company and starting | a new one that became a direct competitor - but that sort | of thing happens too. I'm not sure what California's non- | compete laws were like in '92. | | --- | | The "you can't work anywhere using a computer" as a non- | compete is certainly something that isn't reasonable. A | "you can't start a competing company and try to get | former clients to switch to you after selling your old | one" is enforceable. | | So where does the "you leave a company and then start a | consultancy that competes directly with the professional | services, consulting, or support of the previous company" | fall? That's a question I haven't found an answer to. | | As to the bit on some things being enforceable: Blue | Mountain Enterprises, LLC v. Owen ( | https://law.justia.com/cases/california/court-of- | appeal/2022... ) | | > Primary Holding | | > Court of appeal upholds the enforcement of a | restrictive covenant against a former employee who had | sold his ownership interest in the company while | concurrently agreeing to the covenant. | | And we've got an example where a non-compete / non- | solicitation agreement _was_ enforced, appealed, and | found correct. | snapcaster wrote: | I fail to see what's wrong with this. Not trolling, what | actual harm is being done here? it should be priced into | the risk of acquiring the company right? | ptmcc wrote: | I don't see how this addresses non-competes at all. Also that | is already how many sign-on bonuses work. | | Retention is only tangentially related to non-competes. People | leave for all sorts of reasons. If a company wants to restrict | what they can do after they leave then they can pay them for | that supposed value. We'd find out really quickly that most | non-competes are bunk. | | Not to mention that you'd need to add a couple zeroes to that | sign-on bonus for it to mean squat to anyone actually working | with valuable proprietary information. | aiperson wrote: | They should ban unpaid non-compete clauses above 6 months. I | wouldn't want them to go further than that. A half-year paid | vacation is a pretty good thing for almost all workers. | deathanatos wrote: | Good riddance to this form of wage suppression. Let's do forced | arbitration next. | [deleted] | bigmattystyles wrote: | For some reason (I never dug deeper), my friend who is an | attorney said she prefers arbitration. Maybe because she | already is an attorney? The only thing I can think of is that | it is more expedient and having seen behind the curtain the | talk of biased arbiters (biased towards the Goliath) are | exaggerated. But if anyone can opine I'm all ears. | deathanatos wrote: | I've yet to hear a single valid reason for _forced_ | arbitration. I have nothing against two parties, _at the time | of a dispute_ , who want to engage in arbitration, in doing | so. | | There's also numerous stuff that should, IMO, fall into class | action, but gets divvied up in forced arbitration, to the | point where it isn't worth the time and expense for the | individuals in the class to continue to pursue justice. | (Although there have been some novel DoS style mass- | arbitrations ... that's more of a means of trying to force | the corporations hand into a normal class action, and towards | justice.) | | Normally the reasons cited for arbitration are things like | "the courts are slow" or "the courts are expensive" or "the | courts are overwhelmed" -- but you could still just do | arbitration at the time of dispute with those. Saying that | _forced_ arbitration is better from these arguments is non | sequitur. | | There's also a conflict of interest between the chosen | arbiter and the company. (And conflict of interest is | _independent_ of bias; a good arbiter can very well be | unbiased, but it is easier for everyone involved to believe | that if there isn 't a conflict of interest.) | jonny_eh wrote: | > my friend who is an attorney said she prefers arbitration | | So let her opt-in. Why force it? | shemnon42 wrote: | Forced arbitration is bad for employees, based on empirical | evidence | | * It has a chilling effect: less disputes are filed | | * employees prevail less often | | * when employees do win the employee portion of the award is | less than standard litigation | | https://facesofforcedarbitration.com/wp- | content/uploads/2019... | munk-a wrote: | In the US these clauses are almost never enforceable and simply | serve as a chilling effect. There is a fundamental issue with | non-competes that if they prevent a person's well being they | can't be enforced so if a person secures a job that would violate | their non-compete the enforcement of their non-compete would | cause them to lose their income. This is considered a hardship so | enforcement of a non-compete clause requires a clear | demonstration that other work would be available which in many | cases is hard to do in the modern world since it'll often require | there existing a genuine offer of work to the individual - offers | are normally private so they can be hard to discover but, | additionally, simply demonstrating the availability and presence | of job listings is usually insufficient because hiring processes | are a lot more complex today then in 1800 when some dude would | hand you a shovel and offer you a dime at the end of the day. | | I applaud their death - they are fundamentally bad for employees. ___________________________________________________________________ (page generated 2022-11-01 23:01 UTC)